Most empirical work on sources of economic growth for different countries lack country-specific empirical evidence to guide policy choices in individual developing countries and previous studies of factor productivity tend to focus on the entire economy or a single sector. In this study, we use the recently developed growth accounting tools to explicitly determine the sources of economic growth at both national and sectoral levels in Zambia between 1970 and 2013. We use data from World Development Indicators and Zambia's Central Statistical Office. On average, total factor productivity (TFP) contributes about 5.7% to economic growth. Sectoral analysis shows that agriculture contributes the least to GDP and that within each sector; factors that contribute to growth differ. Structural transformation has been slow and contributed to the observed inefficiency. We outline the implications of the observed growth and provide recommendations.Keywords: Total factor productivity; growth accounting; economic growth; Zambia. 2015 [7]).
________________________________________________Though the amount of empirical papers investigating the sources of economic growth for different countries has expanded significantly, country-specific empirical evidence to guide policy choices in individual developing countries remains arcane (Chirwa and Odhiambo, 2016 [8]). Policy makers and political economists in least developed countries strive to tackle the enigma of slow economic growth rates (or lack of it) recorded by their economies. For example, the empirical evidence of slow economic growth rate for African economies is generally sourced from cross-country regressions which fail to take care of individual country diversity of experiences (Altug et al., 2007 [9]; Anyanwu, 2014 [10]; Chirwa and Odhiambo, 2016[8]). Such studies could only be of vast importance at regional but not at individual country level. In addition, little empirical work has closely examined determinants of economic growth for most developing countries and Zambia is no exception. For example, we are aware only of Chirwa and Odhiambo (2016 [8])that empirically determine Zambia's macroeconomic determinants of economic growth. Their study does not reveal factor productivity of the Zambian economy or any of the broad economic sectors viz; agriculture, industry and service.Further, previous studies of factor productivity tend to focus on the entire economy or a single sector of the economy. As Herrendorf et al. (2013 [11])and Johnson (1970 [12]) have pointed out; a fundamental feature of growth is a decline in the agriculture's sectoral and labour share in total value-added, an increase in the service sector's share in value added and labour, while industry's shares may rise or fall depending on a number of factors. Thus this study takes a more comprehensive approach by estimating Peer-reviewed version available at Economies 2017, 5, , 15; doi:10.3390/economies5020015 3 Zambia's sources of economic growth by sectors; agriculture, industry and service in a syst...