Agricultural production and economic growth in Somalia from 1986 to 2016
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Date
2018-09
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Publisher
Kampala International University, College of Economics & management.
Abstract
The study aimed at examining the effect of agricultural production on economic growth in Somalia from the period of 1986 to 2016 using time series data. Specifically, the study examined the causality and the effect of agricultural production on GDP growth. The objective was motivated by the fact that the problem statement emphasized that agricultural production has not yielded expected economic growth in Somalia. The study hypothesized that no casualty between agricultural production and economic growth and that there is no significant effect of agriculture production on economic growth in Somalia. The study followed a multiple linear regression analysis which gives best linear unbiased estimates to establish relationships between GDP and the independent variables. Prior to the regression stationarity among variables was tested using ADF tests. The test results showed that all the study variables were nonstationary at level except agricultural production that only became stationary at level. The granger causality test showed that in Somalia, agricultural production does not granger cause GDP growth. The regression model showed that there is a significantly positive effect of agricultural production (13i=0.5058) and growth at 5% level, interest rate, inflation rate and exchange rate effects were positively insignificant. The study concluded there is no causality between economic growth and agricultural production. The thither concluded that agricultural production has a significantly positive effect on economic growth. Thus, sustained economic growth in Somalia can be achieved through expansion of agricultural production combined with good exchange rates. This study therefore recommends that government should enabling economic and political environment to promote agricultural productivity in the country
Description
A research thesis submitted to the College of Economics and Management in partial fulfillment of the requirements for Award of Master in Statistics Degree of Kampala International University
Keywords
Agricultural Production, Economic Growth