An In-Depth Analysis of Tanzania's Export Growth Trajectory from 1992 to 2021

Abstract

This paper analyses Tanzania's export performance from 1992-2021. Exports remain an important aspect of earning foreign currency. To ensure the country's robust economic growth, it is also imperative to increase export value. To analyse Tanzania's export performance, time series data from the World Bank was used. The comparative advantage theory guided this study in analysing export performance. Also, the ARIMA model was used to figure out the relationship between export, FDI, and nominal exchange rate, and the study revealed that export, Foreign Direct Investment (FDI) inflows, and exchange rates have a relationship with export performance. The ARIMA model was used because of its effectiveness in forecasting and capturing patterns, trends, and seasonality. This study is important because it examines the importance of FDI and exchange rates on export performance. Furthermore, this study provides policymakers with actionable recommendations based on empirical evidence, helping them make informed decisions regarding export promotion initiatives, particularly in creating a conducive environment for FDI and the importance of managing nominal exchange rates. To stimulate the country's exports, governments should support and promote strategies that encourage FDI and strictly manage the appreciation and depreciation of currencies.