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Exchange rate and manufacturing sector performance in SACU states

Author

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  • Courage Mlambo

Abstract

This study sought to examine the impact of the exchange rate on manufacturing performance in SACU states. The manufacturing sector is an avenue for trade expansion and it is a vital source of innovation and competitiveness and it makes outsized contributions to exports and productivity growth. Manufacturing in SACU countries is hampered by structural shortcomings such as the exchange rate and other factors. Given this background, the study employed the panel group FMOLS and PMG approaches for the period 1995–2016. Results showed that the exchange rate, imports and FDI have a negative relationship with manufacturing performance. Exports and inflation had a positive relationship with manufacturing performance. Based on the findings of the study, it is recommended that SACU countries need to formulate informed policies that align the exchange rate to the actual needs of the manufacturing sector. Policymakers need to know which subsectors of the manufacturing sector will be affected by an exchange rate change and they also need to know the magnitude of the impact so that they can make informed decisions.

Suggested Citation

  • Courage Mlambo, 2020. "Exchange rate and manufacturing sector performance in SACU states," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1787735-178, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1787735
    DOI: 10.1080/23311975.2020.1787735
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    Citations

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    Cited by:

    1. A. Akshaya & B. V. Gopalakrishna, 2025. "Impact of climate and economic policy uncertainties on inflation in India: using the vector error correction model approach," Asia-Pacific Journal of Regional Science, Springer, vol. 9(2), pages 585-604, June.
    2. Rejoice Rumbidzai Musakaruka & Yaya Deome Hamadjoda Lefe & Epo Boniface Ngah, 2025. "Free Movement of Persons and Cross‐Border Trade in Southern African Development Community (SADC): The Zimbabwean Example," African Development Review, African Development Bank, vol. 37(3), September.
    3. Eunice Jonathan Lugina & Adam Beni Swebe Mwakalobo & Francis Lwesya, 2022. "Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector," Future Business Journal, Springer, vol. 8(1), pages 1-11, December.
    4. Nurudeen Abu & Joseph David & Musa Abdullahi Sakanko, 2025. "External Debt and Manufacturing Sector’s Performance in MINT Countries: Evidence from Dynamic Heterogeneous Panel Estimation Techniques," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(4), pages 15164-15185, October.
    5. repec:bcp:journl:v:7:y:2023:i:6:p:494-508 is not listed on IDEAS
    6. Ifeoma Florence Onaga & Augustine C. Arize & Josaphat U. J Onwumere & Ebere Ume Kalu, 2023. "Monetary policy transmission channels and the performance of the real sectors in selected sub-Saharan African countries: a system-GMM approach," Future Business Journal, Springer, vol. 9(1), pages 1-15, December.
    7. Oscar Chiwira & Lovemore Muchingami & Lawrence Jambani, 2023. "Exports and economic growth: relationships and threshold analysis for the Southern Africa customs union," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 12(8), pages 274-288, November.
    8. Muhammed Adamu Obomeghie & David Umoru, 2024. "Devaluation, Goods Price Variation, And Gdp Growth," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 16(2 (July)), pages 273-311.

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