Export diversification and economic growth in Sub-Saharan Africa.

Abstract

Most countries in Sub-Saharan Africa (SSA) have been associated with low and volatile growth performance over the years. Export diversification has been identified in the literature as growth-inducing. This study provides evidence on the relationship between export diversification and economic growth using panel data of forty-two (42) SSA countries. Employing the system Generalised Method of Moments (GMM) estimation technique and three different measures of diversification, we find that export diversification has a positive and significant effect on economic growth in SSA. Our results are robust to the measures of export diversification. The results do not however support a hump-shaped (non-linear) relationship between export diversification and economic growth in SSA. The findings have relevant implications for policy.