Research Article
Ebrima K. Ceesay
Abstract
Natural disaster such as floods has experienced extraordinary costs to animals, human, social and economic features, affecting not only the local but worldwide economy. Though the frequency of flood, time it takes for flood to last, the cause of floods, affected areas and economic damages are happening in the raining season in the Gambia. This paper studies the impacts of flood disaster on GDP growth, in the agricultural and manufacturing sectors in the Gambia for the period of 1969 to 2016 by applying the Autoregressive Distributed lags models with Dynamac (dynardl) for co-integration and error correction model (ECM) for short-run and long run relationship between the variables. Error correction (EC) specified in the model so as the dependent variable to be run in differences. The Augmented Dickey-Fuller (ADF) test, Phillips-Perron (PP) test and Kwiatkowski-Phillips-Schmidt- Shin (KPSS) test inspects the stationarity of the variables in the level and first differences. Since the CUSUM test does not cross the upper and lower 5% line, the model is structurally stable. The findings of the study suggest that floods affect positively the agricultural growth in both the long run and short run. Floods also affects positively the growth of GDP in the short and long run while floods affect negatively the growth of manufacturing sector in the long and short run. The following variables negatively affect the growth of agriculture in the Gambia in the long run; frequency of floods, growth of GDP, growth of manufacturing sector, growth of inflation. The results of the study have important implications on growth of GDP, growth of agricultural sector and growth of manufacturing sectors.