E3 Journal of Business Management and Economics

E3 Journal of Business Management and Economics Vol. 5 (1) pp. 009-016, January 2014; © E3 Journals; ISSN 2141-7482

A case of the missing link- An analysis of the potential contribution of the transport and communication sector in the economic growth and development process: A case study of Zimbabwe (1980-2013)

Abstract

The research focused on analysing the Transport and communications sector potential contribution to economic development and how this can translate into addressing adverse socio-economic issues like unemployment, access to better health care, nutrition, clean water and sanitation, spread of HIV/AIDS and other social amenities. The target population was the Transport and Communications sector. Multiple regression analysis was used to come up with a model that best fits the time series data. The model results indicate that the sector is operating at about 35% and the partial elasticity of GDP to Transport sector output is 0.42, meaning that a 1% increase in agriculture output results in a 0.42 % increase in GDP. This implies that at full capacity, the sector can increase GDP by US $2.703 billion dollars. We expect this to translate into public expenditure on capital and social welfare projects. It will also increase the households΄ disposable incomes which will induce demand for key services like health care, education and others. We also expect investment expenditure to increase leading to job creation and improved domestic production which means less dependence on imports and hence more savings at home.

Keywords: Keywords: Differencing, Dollarization, elasticity, Gross Domestic Product (GDP), Purchasing Power Parity (PPP), stationary data, and value addition.