An econometric analysis of the relationship between agricultural production and economic growth in Zimbabwe

In Less Developed Countries (LDCs) like Zimbabwe, agricultural production has been regarded by several studies as a paramount prerequisite for industrialization and economic growth. The idea behind this view is that, as agricultural production increases, countries are able to produce more food with less labour input which allows them to feed their growing population while releasing labour for the manufacturing sector and other sectors of the economy hence the process will lead to economic growth. The main objective of this study was to investigate how agricultural production affected economic growth in Zimbabwe from 1980-2010. The Log linear growth regression model was employed where gross domestic product was the dependant variable and the explanatory variables are the major crop products and factors which affect it. Four major crops which were included in the model are tobacco, maize, coffee and cotton. Moreover, a dummy variable for the prevailing weather conditions was also included in the model. The regression analyses were performed using Econometric-views 3 (E-views 3) statistical package. Regression was carried out on time series data for the period 1980 to 2010. The data was tested for stationarity and for autocorrelation. Problems of non stationarity of data were corrected by differencing the trending series. Results from the empirical analysis provide strong evidence indicating that agricultural production is important in improving the wellbeing of countries especially in LDCs. The results from this study suggest that the value of agricultural production of tobacco, maize and cotton positively affects economic growth in Zimbabwe from 1980 to 2010.