Outward orientation as an engine to manufacturing growth

Abstract

Abstract by author:

The main aim of this paper is to alert the policy-makers on some of the macroeconomic variables which might help in boosting manufacturing growth, when designing the industrial policy. The study period covers from 1973 to 1993. The need to do such an analysis is supported by the slow growth of the manufacturing sector since the 1970s, as well as its contribution to GDP, which is relatively low by Sub Saharan African countries' standards. In the absence of an appropriate econometric model that could be applied to quantify the policy variables (such as the internal multipliers), a quantitative model by Chenery (1960) and a qualitative model by Riddell (1990) are utilised. Findings of both models show that domestic demand is one of the major structural factors that have hindered manufacturing growth, thus, the hypothesis that there is insufficient demand for Namibian manufactures in the domestic market is justified. From the qualitative model analyzed, the negative impact (-6n percent) of domestic demand and the positive impact (160 percent) of export promotion on manufacturing growth, implies that Namibian manufactures face higher absorption in the foreign market than domestically. The policy implications are such that, for Namibia to maintain a positive foreign demand for its manufactures, the Namibian manufacturing sector should be able to compete at the international level