University of Khartoum

Accounting for Growth in Sudan1982-2005

Accounting for Growth in Sudan1982-2005

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Title: Accounting for Growth in Sudan1982-2005
Author: Al-Siddiq Ahmed AbdulRahman, Shamboul
Abstract: The present study seeks to examine sources of economic growth and to evaluate quantitatively their relative contributions in actual growth rate using time series data series for Sudan during the period 1982-2005. The neoclassical growth theory postulates that, growth in factor inputs (labor and capital) and productivity are the chief sources of long-run economic growth. To test such hypothesis, we use a growth accounting methodology, due to Solow (1957), to decompose the actual rate of growth in output into the contributions from growth rates in physical capital and labor and a residual measure of the change in total factor productivity (TFP). The latter is a comprehensive productivity measure that includes, among other things, new technologies, economic efficiency, organizational improvements, measurement errors, etc. Over the entire period (1982-2005), the estimated rate of growth in real GDP was 4.43%. The share of TFP was 2.41% in the estimated rate; labor share was 1.70% and capital share was 0.32%. Hence, the combined share of inputs was 2.02%. In relative terms, the contribution of TFP in observed growth was 58% that of labor was 35% and that of capital was 7%. The main findings, thus, indicate that the actual growth in real GDP over the period under study was driven by both TFP and factor accumulation; however, the contribution of the TFP was slightly much higher than the combined contribution of the latter. It follows that growth experience in Sudan during the study period was a mixture of both intensive and extensive growth. The poor contribution of capital is attributable to low saving and investment levels due to factors such as civil war and economic distortion especially during the pre-oil discovery era. Despite the drain of skilled labor due to expatriation, the role of labor in growth, however, is substantial. T 6 It should be noted that these findings are sensitive to the model specification and assumptions especially the assumptions of constant returns to scale and competitive factor prices. During this period, several factors have contributed to this pattern of growth. Prominent among them are the civil war, natural disasters, budget deficit and hyperinflation. Owing to the importance of sustained growth and its relation to welfare and the role of TFP in sustained growth, the researcher believes that the government and the private sector as well should pay heed to factors that boost productivity such as R&D and education, on job training etc
URI: http://khartoumspace.uofk.edu/handle/123456789/13315
Date: 2015-06-16


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