DETERMINANTS OF NAMIBIAN EXPORTS: A GRAVITY MODEL APPROACH

Exports are the drivers of economic growth in Namibia. Given their importance in the economy, it is necessary to analyse factors that are determining export flows between Namibia and its trading partners. A gravity model is very important in the analysis of bilateral trade flows, and has proven to be a useful tool in determining trade or export potential of a country. The purpose of this study is to investigate factors that determine exports of Namibia using a gravity model approach. The analysis indicates that increases in importer’s GDP and Namibia’s GDP cause exports to increase, while distance and importer’s GDP per capita are associated with a decrease in exports. Namibia’s GDP per capita and real exchange rates do not have an impact on export. Namibia exports more to countries where it shares a common border and SADC as well as to the European Union. The study shows that there is unexploited export potential to among others, Australia