The Impact Of Copper Exporting Price On Economic Growth In Zambia

Copper mining being the dominant modern sector economic activity in Zambia.From the inception of mining activities within the 1920 s,it’s accounted for the bulk of the country’s exports and foreign earnings.However,most of the people are of the view that its contribution to development programs is disproportionate,well below their expectations.They attribute the contemporary failure to copper price volatility,international market,ownership and forces of government ineptitude.Given the big expense involved in establishing and running copper mines,the country depends heavily on foreign capital.An enormous proportion of the copper that’s mined in Zambia is sold in an unprocessed state denying the country additional revenue.This research investigates the impact of copper exporting prices on economic growth in Zambia.Since Zambia’s economy is alleged to be captivated with copper mining,economic analysts estimate that economic progress in Zambia depends on international copper prices and thus externally determined.This is often somewhat problematic because it absorbs policy makers and government of the responsibility to obtain sustainable growth.In order to check the how valid this estimation is,the paper uses an Auto-regressive Distributed Lag(ARDL)Model that has various variables including copper prices.The results of this estimation show that,within the in the long-run,physical capital,exchange rate,inflation,crude oil prices,government spending and agricultural productivity affect economic growth;international copper prices only have short run impact on economic growth.The paper then concludes that with proper and adequate planning and strategic policy alterations,there’s still a prospect of Zambia achieving higher sustainable economic growth even in periods when international copper prices are taking a downturn.