Assessing Botswana’s Textiles Export Trade Potential Using the Gravity Model

Abstract

Through the application of the gravity trade model technique, the study investigates countries for which Botswana has unrealized export trade potential in textile products. The estimated results indicate that Canada, Denmark, Finland, Ghana, Mozambique and Switzerland are the export destinations to which Botswana should increase its export textile products as these countries have untapped market potential for such products. The research also found that existence of unrealized export potential in this sector was as a result of a number of issues including import barriers put by the importing country’s major trading partners as well as other problems from Botswana’s side. These barriers and hindrances to Botswana’s sectoral exports include stringent rules of origin (RoO), low product quality, inadequate international marketing and unrecorded informal trade.

Keywords: Sectoral exports, trade potential, gravity model, Botswana

Botswana Journal of Economics, vol 9 (13) 2012