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Linkages between mining and non-mining sectors in Botswana

Author

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  • Kegomoditswe Koitsiwe

    (Akita University)

  • Tsuyoshi Adachi

    (Akita University
    Akita University)

Abstract

Over the past decades, a negative view of mining has emerged questioning the positive relationship between mineral extraction and economic development with particular attention to developing countries. The debate remains unresolved as mining continues to be an enclave sector in many resource-rich developing countries. In this paper, we examine the linkage between mining and non-mining sectors in the economy of Botswana using time series data from 1976 to 2014. The study adopted statistical tests including the Granger causality test and vector autoregressive (VAR) technique based upon the impulse response function (IRF) and variance decomposition (VD) to observe linkages among variables. The empirical results show a significant causal linkage from mining to manufacturing and services. Our findings are consistent with respect to the statistical tests used. Overall, the results indicate that there is a forward linkage between mining and manufacturing and mining and service sector. The policy implication of the study is that the government of Botswana should consider the development of backward linkage from mining sector such as provision of mining inputs and services by local companies.

Suggested Citation

  • Kegomoditswe Koitsiwe & Tsuyoshi Adachi, 2017. "Linkages between mining and non-mining sectors in Botswana," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 30(2), pages 95-105, July.
    • Handle: RePEc:spr:minecn:v:30:y:2017:i:2:d:10.1007_s13563-016-0097-0
    DOI: 10.1007/s13563-016-0097-0
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    Cited by:

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    2. Elkhan Richard Sadik-Zada & Wilhelm Loewenstein & Yadulla Hasanli, 2021. "Production linkages and dynamic fiscal employment effects of the extractive industries: input-output and nonlinear ARDL analyses of Azerbaijani economy," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 3-18, April.
    3. Mia Ellis & Margaret McMillan, 2018. "Optimal local content for extractive industries: How can policies best create benefits for Tanzania?," WIDER Working Paper Series 133, World Institute for Development Economic Research (UNU-WIDER).

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