Analysis of the revenue implications of trade liberalization on Namibia in the context of Southern African Customs Union
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Date
2008
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Abstract
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Trade liberalization is gaining momentum in the world. For developing countries like Namibia it has serious revenue implications due to its substantial contribution to national budget. Namibia is a country characterized by small population of about 2 million coupled with small domestic market. Its membership to the Southern African Customs Union (SACU) benefits the country by sharing in the SACU Revenue Pool
Therefore, this paper analyzes the implications of trade liberalization on customs revenue in Namibia. A quantitative approach is used in the study and an econometric model is employed to analyze the relationship between trade revenue and trade liberalization in Namibia. The variables used in the study are customs revenue, imports as percentage of GPD, exchange rate and dummy variables representing trade reform
The major finding reveals that trade liberalization has had little impact on the customs revenue at least in the short run. The study concludes with a number of Recommendations and suggests other potential area of research. A very important recommendation is that policy makers should pursue sound macro economic policy which promotes industrial development in order to mitigate the impact of loss of customs revenue on the national budget.
Trade liberalization is gaining momentum in the world. For developing countries like Namibia it has serious revenue implications due to its substantial contribution to national budget. Namibia is a country characterized by small population of about 2 million coupled with small domestic market. Its membership to the Southern African Customs Union (SACU) benefits the country by sharing in the SACU Revenue Pool
Therefore, this paper analyzes the implications of trade liberalization on customs revenue in Namibia. A quantitative approach is used in the study and an econometric model is employed to analyze the relationship between trade revenue and trade liberalization in Namibia. The variables used in the study are customs revenue, imports as percentage of GPD, exchange rate and dummy variables representing trade reform
The major finding reveals that trade liberalization has had little impact on the customs revenue at least in the short run. The study concludes with a number of Recommendations and suggests other potential area of research. A very important recommendation is that policy makers should pursue sound macro economic policy which promotes industrial development in order to mitigate the impact of loss of customs revenue on the national budget.
Description
A thesis submitted in partial fulfilment of the requirements for the degree of Masters of Science in Economics
Keywords
Revenue, Free trade