Does Africa’s Industrialization Foster Sustainable Emission Decoupled Economic Growth? The Case of Zambia and South Africa
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Published:
Jul 12, 2024
Keywords:
Commodity-based Industrialization, Economic growth, Regional value chain, Special Economic Zones, South Africa, Zambia
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Articles
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Abstract
In fostering sustainable growth for many developing nations, there is an urgent need to re-engineer the industrial sector towards one that promotes value addition, particularly on the industrial base. Zambia and South Africa’s major economic challenges revolve around their persistent economic dependence on copper and gold. Within the context of their broader goals to diversify their economies, Zambia has struggled to reduce its reliance on copper despite various initiatives, while South Africa faces declining gold production and the need to adapt to global sustainability trends and changing resource demands. Using a dynamic Panel ARDL model, this study thus analysed the effects of industrialization on sustainable emission decoupled economic growth using data from 1970-2022 for South Africa and Zambia. Our results showed that the metallic, food and beverages, paper, and wood products industries significantly affected emission decoupled economic growth in South Africa, while only the fabricated metal and wood industry significantly fostered economic growth in Zambia in the short run. In the long run, for both countries, only the paper and non-metallic industries affected economic growth significantly. The study concluded that while extractive and high emitting industrial sectors are the most feasible in the case of most African countries; to be able to accelerate sustainable economic growth through the industrial sector, these nations will have to re-engineer their industrial sectors towards a more commodity-aligned approach that puts value addition and emission reduction through regional value chains at the pinnacle of policy and national development strategies.
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How to Cite
Nsakaza, K., Simuchimba, J., & Banda, E. (2024). Does Africa’s Industrialization Foster Sustainable Emission Decoupled Economic Growth? The Case of Zambia and South Africa. International Journal of Economics and Management, 2(02), 93–110. https://doi.org/10.54209/iem.v2i02.30
References
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Perlo, V. (1962). The {A}merican Economic Review. 52(3), 496–512.
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Rostow, W. (1971). Politics and the Stages of Growth. University Press.
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Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65–94.
Su, D., & Yao, Y. (2017). Manufacturing as the key engine of economic growth for middleincome economies. Journal of the Asia Pacific
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Szirmai, A., & Verspagen, B. (2015). Manufacturing and economic growth in developing countries, 1950-2005. Structural Change and Economic Dynamics, 34, 46–59.
Tapio, P. (2005). Towards a theory of decoupling: degrees of decoupling in the EU and the case of road traffic in Finland between 1970 and 2001. Transp. Policy, 12(5), 137–151. https://doi.org/10.1016/j.tranpol.2005.01.001
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United Nation. (1949). Economic Survey for Latin America 1948. No, 12, 1948–1998.
Vera, L. (2013). Some Useful Concepts for Development Economics in the Tradition of Latin {A}merican Structuralism. The American Journal of Economics and Sociology, 72(4), 917–948.
Victor, M., & Anthuvan, L. (2005). Jobless Growth and Unemployment. World Affairs: The Journal of International Issues, 9(1), 57–68.
Weiss, J., & Jalilian, H. (2016). Manufacturing as an Engine of Growth. In J. Weiss & M. Tribe (Eds.), Routledge Handbook of Industry and Development (pp. 26–37). Routledge.
Wells, H., & Thirlwall, A. P. (2003). Testing Kaldor. S Growth Laws across the Countries of Africa’, African Development Review, 15(2), 89–105.
Wenwen Wang, Man Li, M. Z. (2017). Study on the changes of the decoupling indicator between energy-related CO2 emission and GDP in China. Energy, 128, 11–18. https://doi.org/10.1016/j.energy.2017.04.004
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Yamak, R., Erdem, H. F., & Koçak, S. (2016). A Re-Examination of Kaldor. S Engine-of-Economic Growth Hypothesis for the Turkish Economy’, Acta Universitatis Danubius. Œconomica, 12, 4.
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Zhao, J., & Tang, J. (2018). Industrial structure change and economic growth: A China-Russia comparison. China Economic Review, 47, 219–233.
African Union. (2023). Theme of The Year 2023: ``Acceleration Of Afcfta Implementation. African Union.
Agency, Z. S. (2022). 2021 Labour Force Survey Report. Zambia Statistics Agency.
Alexiou, C., & Tsaliki, P. (2010). An Empirical Investigation of Kaldor. S Growth Laws’, The Indian Economic Journal, 58(3), 144–155.
Atesoglu, H. S. (1993). Manufacturing and economic growth in the United States. Applied Economics, 25(1), 67–69.
Ayodele Idowu, O. M. O. and M. A. C. (2023). Does industrialization trigger carbon emissions through energy consumption? Evidence from OPEC countries and high industrialised countries. Quantitative Finance and Economics, 7(1), 165–186.
Cameron, R., & Neal, L. (2004). Historia gospodarcza świata. Ksi{\k{a}}żka i Wiedza.
Cantore, N., & others. (n.d.). (2017) `Manufacturing as an engine of growth: Which is the best fuel?’. Structural Change and Economic Dynamics, 42, 56–66.
Chakravarty, S., & Mitra, A. (2009). Is industry still the engine of growth? An econometric study of the organized sector employment in India. Journal of Policy Modeling, 31(1), 22–35.
Economic Commission for Latin America and the Caribbean. (2012). Structural Change for Equality: An Integrated Approach to Development. Naciones Unidas Comisión Económica para América Latina y el Caribe.
Felipe, J. (2009). Inclusive Growth, Full Employment and Structural Change. Anthem Press.
Francey, R. J., Trudinger, C. M., van der Schoot, M., Law, R. M., & Krummel, P. B. (2013). Langen‐ felds, R. L., Paul Steele L., Allison, C.E., Stavert, A.R., Andres, R.J., R{"o}denbeck, C Atmospheric Verification of Anthropogenic CO, 2, 520–524.
Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of the North {A}merican Free Trade Agreement. NBER.
Hobday, M. (2013). Learning from Asia. In s Success: Beyond Simplistic, in A. Szirmai, W. Naudé, & L. Alcorta (Eds.), Lesson Making (pp. 131–154). Oxford University Press.
Jeon, Y. (2006). Manufacturing, Increasing Returns and Economic Development in China, 1979- 2004: A Kaldorian Approach. https://econpapers.repec.org/RePEc:uta:papers:2006_08
Kaldor, N. (1967). Strategic Factors in Economic Development. New York State School of Industrial and Labor Relations, Cornell University.
Kathuria, V., & Natarajan, R. (2013). Is Manufacturing an Engine of Growth in India in the Post Nineties? Journal of South Asian Development, 8, 385–408.
Kniivil"a, M. (2007). Industrial development and economic growth: Implications for poverty reduction and income inequality. In, p. Pp, 295–332.
Kregel, J. (2016). The Effective Demand Approach to Economic Development. In J. G. Reinert & R. Kattel (Eds.), E (pp. 504–518). Edward Elgar Publishing.
Kuznets, S. (1976). Wzrost gospodarczy narodów, produkt i struktura produkcji, Warszawa, original version: Economic Growth of Nations. Total Output and Production Structure, Cambridge Mass, 1971.
Lewis. (1954). may), Economic Development with Unlimited Supplies of Labour. Manchester School, 22, 2.
Mamgain, V. (1999). Are the Kaldor-Verdoorn laws applicable in the newly industrializing countries? Review of Development Economics, 3(3), 295–309.
Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107(2), 407–437.
Marconi, N., Reis, C. F. de B., & Araújo, E. C. de. (2016). Manufacturing and economic development: The actuality of Kaldor. S First and Second Laws’, Structural Change and Economic Dynamics, 37, 75–89.
McCausland, W. D., & Theodossiou, I. (2012). Is manufacturing still the engine of growth? Journal of Post Keynesian Economics, 35(1), 79–92.
Mercan, M., K\iz\ilkaya, O., & Okde, B. (2015). Are The Kaldor. S Laws Valid? Panel Data Analysis under Cross Section Dependency for NIC Countries, 23(2014), 140–145.
Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The Impact of Economic Growth on CO2 Emissions in Azerbaijan.
Moyo, T. (2015). Industrialisation in Africa: Selected country experiences. University of Limpopo.
Necmi, S. (1999). Kaldor. S Growth Analysis Revisited’, Applied Economics, 31(5), 653–660.
O’Neill, A. (2023). South Africa: Distribution of gross domestic product (GDP) across economic sectors from 2012 to 2022. https://www.statista.com/statistics/371233/south-africa-gdp-distribution-across-economic-sectors/
Palma, J. G. (2005). Four Sources of `de- Industrialization’ and a New Concept of the ``Dutch Disease’. In J. A. Ocampo (Ed.), Beyond Reforms: Structural Dynamics and Macroeconomic Vulnerability (pp. 71–116). Stanford University Press and World Bank.
Perlo, V. (1962). The {A}merican Economic Review. 52(3), 496–512.
Porritt, J. (2021). What makes paper sustainable? Sustainability in the Paper Industry, 1, 2024. https://www.upmpaper.com/sustainability/sustainability-paper-industry/
Rostow, W. (1960). The Stages of Economic Growth: A Non -- communist Manifesto. Chapter II.
Rostow, W. (1971). Politics and the Stages of Growth. University Press.
Royer, R. (2023). No Title. Global Growth and Profitability While Creating a Sustainable Future?. [Online] Available at: [Accessed, 1, 2024. https://www.tietoevry.com/en/blog/2023/06/how-can-the-paper-industry-drive-global-growth-and-profitability-while-creating-a-sustainable-future/
Schumpeter, J. A. (1934). The Theory of Economic Development. Cambridge.
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65–94.
Su, D., & Yao, Y. (2017). Manufacturing as the key engine of economic growth for middleincome economies. Journal of the Asia Pacific
Economy, 22(1), 47–70.
Szirmai, A., & Verspagen, B. (2015). Manufacturing and economic growth in developing countries, 1950-2005. Structural Change and Economic Dynamics, 34, 46–59.
Tapio, P. (2005). Towards a theory of decoupling: degrees of decoupling in the EU and the case of road traffic in Finland between 1970 and 2001. Transp. Policy, 12(5), 137–151. https://doi.org/10.1016/j.tranpol.2005.01.001
Thirlwall, A. P. (2015). A Plain Man. In in A. P. Thirlwall (Ed.), s Guide to Kaldor’s Growth Laws’ (pp. 326–338). Palgrave Macmillan.
Timmer, M. P., de Vries, G. J., & de Vries, K. (2015). Patterns of Structural Change in Developing Countries. In J. Weiss & M. Tribe (Eds.), Routledge Handbook of Industry and Development (pp. 65–83). Routledge.
United Nation. (1949). Economic Survey for Latin America 1948. No, 12, 1948–1998.
Vera, L. (2013). Some Useful Concepts for Development Economics in the Tradition of Latin {A}merican Structuralism. The American Journal of Economics and Sociology, 72(4), 917–948.
Victor, M., & Anthuvan, L. (2005). Jobless Growth and Unemployment. World Affairs: The Journal of International Issues, 9(1), 57–68.
Weiss, J., & Jalilian, H. (2016). Manufacturing as an Engine of Growth. In J. Weiss & M. Tribe (Eds.), Routledge Handbook of Industry and Development (pp. 26–37). Routledge.
Wells, H., & Thirlwall, A. P. (2003). Testing Kaldor. S Growth Laws across the Countries of Africa’, African Development Review, 15(2), 89–105.
Wenwen Wang, Man Li, M. Z. (2017). Study on the changes of the decoupling indicator between energy-related CO2 emission and GDP in China. Energy, 128, 11–18. https://doi.org/10.1016/j.energy.2017.04.004
Xuefeng, Q., & Yaşar, M. (2016). Export Market Diversification and Firm Productivity: Evidence from a Large Developing Country. In World Development, , vol. 82(C (pp. 28–47).
Yamak, R., Erdem, H. F., & Koçak, S. (2016). A Re-Examination of Kaldor. S Engine-of-Economic Growth Hypothesis for the Turkish Economy’, Acta Universitatis Danubius. Œconomica, 12, 4.
Z. Xing, J. Wang, K. Feng, K. H. (2020). Decomposition and attribution analysis for assessing the progress in decoupling industrial development from wastewater discharge in China. J. Clean. Prod., 222(121789). https://doi.org/10.1016/j.jclepro.2020.121789
Zhao, J., & Tang, J. (2018). Industrial structure change and economic growth: A China-Russia comparison. China Economic Review, 47, 219–233.
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