The role of agriculture, industry and the service sector in economic growth: The case of Mozambique

Abstract

This study evaluated the effect of agriculture, industry, manufacturing and the service sector on economic growth for the period 1991 to 2020 using the autoregressive distributed lag stationarity (ARDL) bounds-testing approach. The empirical results of this study show that, in the long run, the industry sector and exports are positive and significant determinants; the manufacturing sector is a negative significant determinant of economic growth; while agriculture and the service sector were found to be insignificant. However, it was found that, in the short run, agriculture has a significant positive effect on economic growth, along with the manufacturing sector. The service sector was found to have no significant effect on economic growth in the short run. Therefore, in the long run, policy should focus on enhancing the industrial sector and promoting exports. In the short run, policy should focus on agriculture enhancement so as to boost economic growth positively.