Statistical Analysis of Factors Influencing Economic Growth in Zambia

Abstract: The focus of this research is to investigate the factors influencing the economic growth in Zambia. The motivation of this research is due to the unsustainable growth trends that Zambia has been experiencing in recent years. There is an assessment on whether it’s a Least Developed Country status is beared on the vulnerability to a Mid Income Trap therefore by using adapted unit root model, Granger causality tests were conducted to establish which variables affect Zambia's Gross Domestic Product (GDP) per capita income level and predispose it to the Middle Income Trap (MIT). Thus, per capita income, labor productivity, agriculture share to GDP, and manufacturing industry share to GDP were investigated. The results have shown that agriculture share of GDP strongly affects GDP per capita income while manufacturing share of GDP has a weaker effect on GDP per capita. The results obtained further indicate that a change in agriculture share of GDP strongly affects the manufacturing output. Therefore, Zambia should increase investment in agriculture and manufacturing to maintain a positive GDP per capita income growth and to catalyze growth in the secondary sectors