Examining the Impact of Exchange Rate Volatility on Agricultural Exports in Zimbabwe 1980-2022
Keywords:
exchange rate volatility, Agricultural Exports, inflation, zimbabweAbstract
The study examines the impact of exchange rate volatility on Zimbabwe’s agricultural exports (1980–2022), highlighting their economic significance. Using ARDL analysis, it finds short-term positive but long-term negative effects of exchange rate fluctuations, with inflation significantly reducing exports over time. GDP, FDI, and production have temporary effects. Policy recommendations include hedging tools and budgetary stabilisation to mitigate risks, enhance export competitiveness, and drive sustainable development. The study contributes to understanding trade-exchange rate dynamics in developing nations, offering actionable insights for policymakers to foster export-led growth and ensure resilience in Zimbabwe’s agricultural sector.
References
Anderson, K. (2014). Globalisation and agricultural trade. Australian Economic History Review, 54, 285-306.
Blanchard, E. J. (2010). Reevaluating the role of trade agreements: Does investment globalisation make the WTO obsolete? Journal of International Economics, 82, 63-72.
Bonga, W. G. (2019). Stock market volatility analysis using GARCH family models: evidence from Zimbabwe stock exchange. MPRA Paper.
Branson. (2013). Exchange Rate Dynamics and Monetary Policy. Economics Review.
Britton. (2010). The Dynamic Stability of the Foreign-Exchange Market. Economic Journal.
Broll, U., & Eckwert, B. (2006). Transparency in the foreign exchange market and the volume of international trade. Review of International Economics, 14, 571-581.
Chimhore, M., & Chivasa, S. (2021). The effects of exchange rates on Zimbabwe’s exports. Journal of Economics and Behavioral Studies, 13, 8-16.
Dooley, M. P., Folkerts-Landau, D., & Garber, P. M. (2005). Interest rates, exchange rates and international adjustment. National Bureau of Economic Research, Cambridge, Massachusetts, USA.
Edwards, S. (1998). Capital flows, real exchange rates, and capital controls: some Latin American experiences. National Bureau of Economic Research, Cambridge, Massachusetts, USA.
Engle, R. F., & Granger, C. W. (1987). Cointegration and error correction: representation, estimation, and testing. Econometrica: Journal of the Econometric Society, 251-276.
Fanadzo, M., & Ncube, B. (2018). Challenges and opportunities for revitalising smallholder irrigation schemes in South Africa. Water SA, 44, 436-447.
Grubel, H. G., & Grubel, H. G. (1976). Domestic origins of the monetary approach to the balance of payments. International Finance Section, Department of Economics, Princeton University.
Gwanongodza, T. (2020). Agricultural exports and economic growth in Zimbabwe. Stellenbosch University.
Huchet-Bourdon, M., & Korinek, J. (2011). To what extent do exchange rates and their volatility affect trade?
Kandilov, I. T. (2008). The effects of exchange rate volatility on agricultural trade. American Journal of Agricultural Economics, 90, 1028-1043.
Kripfganz, S., & Schneider, D. C. (2023). ARDL: Estimating autoregressive distributed lag and equilibrium correction models. The Stata Journal, 23, 983-1019.
Machlup, F. (1955). Relative prices and aggregate spending in the analysis of devaluation. The American Economic Review, 45, 255-278.
Maiyaki, A. A. (2010). Zimbabwe’s agricultural industry. African Journal of Business Management, 4, 4159.
Mufana, I. S. (2016). Exchange rate volatility and export growth in Zambia, the case of tobacco 1992-2014. University of Zambia.
Mussa, M. (2013). The exchange rate, the balance of payments, and monetary and fiscal policy under a regime of controlled floating. In The Economics of Exchange Rates (Collected Works of Harry Johnson). Routledge.
Mutodi, K., Maziriri, E. T., & Chuchu, T. (2020). The response of Zimbabwe tobacco exports to real exchange rates volatility: 1980–2019. Journal of Agribusiness and Rural Development, 2.
Nasrullah, M., Rizwanullah, M., Yu, X., Jo, H., Sohail, M. T., & Liang, L. (2021). Autoregressive distributed lag (ARDL) approach to study the impact of climate change and other factors on rice production in South Korea. Journal of water and climate change, 12, 2256-2270.
Odili, O. (2014). Exchange rate and balance of payment: An autoregressive distributed lag (ARDL) econometric investigation on Nigeria. IOSR Journal of Economics and Finance, 4, 21-30.
Permana, B. L. D. I., & Rifin, A. (2022). The Exchange Rate Volatility Impact on Agricultural Trade: An Evidence From Indonesian Pepper Export. Jurnal Manajemen & Agribisnis, 19, 12-12.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16, 289-326.
Profile, C. (2011). Zimbabwe. Global UNIDO Project: Strengthening the local production of essential generic drugs in least developed and developing countries. United Nations Industrial Development Organization Vienna.
Robinson, J. (1937). The foreign exchanges. Essays in the Theory of Employment, 2.
Sandu, C., & Ghiba, N. (2011). The Relationship between Exchange Rates and Exports in Romania using Vector Autoregressive model. Annals University Apulensies Series Oeconomica, 2(13), 1-16.
Shayanewako, B., Chuzu, E., & Ntuli, A. T. (2016). The Impact of Hyperinflation on the Agriculture Sector. Economic Management in a Hyperinflationary Environment: The Political Economy of Zimbabwe, 1980-2008, 54, 125.
Srinivasan, P., & Kalaivani, M. (2013). On the temporal causal relationship between macroeconomic variables: empirical evidence from India. MPRA Paper.
Were, M. N. (2002). Analysis of Kenya’s export performance: An empirical evaluation. Discussion paper No.22. Kenya Institute for Public Policy Research and Analysis. http://pdf.usaid.gov/pdf_docs/Pnads073.pdf
World Bank. (2024). Zimbabwe trade balance, exports, imports by country and region 2021. http://www.worldbank.org
Zimstat. (2019). Zimbabwe Small holder Agricultural Productivity Survey 2017 report. www.zimstat.co.zw
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Collin Chikwira
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.
