Abstract:
This study examines the factors affecting service sector growth and development in
Botswana. Using annual time series data from 1980 to 2015, the study employs the
auto regressive distributed lag (ARDL) estimation technique to identify the factors that
contribute to service sector growth. The results show that gross national expenditure,
domestic credit to the private sector and gross fixed capital formation contribute positively
to the growth of the service sector in Botswana. However, trade openness is found to
negatively impact the growth of service sector in the country. The policy implication
of the results is that in formulating service oriented policies, government should focus
on factors that augment the growth of services sector. Specifically, government should
increase spending on the service sector and its sub-sectors. Also, the banking sector
should avail credit to the private sector as this is essential for the growth and development
of the service sector.
