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The study sought to assess the determinants of Tanzania Maize Grain Export
Performance to the East Africa members. Time series data (1990 - 2019) for
economic variables namely Gross Domestic Product(GDP), production levels, export
Price earnings, Inflation, exchange rate and the Trade Openness were used to
estimate maize export supply function. The study utilised the Error Correction Model
(ECM) to run regression for both short and long-run. All the variables used were
found stationary at first difference using Augmented Dickey-Fuller (ADF) unit root
test. After confirming that variables are stationary, cointegration test was done to
investigate a long run relationship between them. The results indicated that export
market price and real exchange rate are positively affecting the volume of maize
export, while inflation indicated negative effects on maize export volume. On the
other hand, maize production, Gross Domestic Product and openness indicated an
indirect relationship with maize export in the long run. Findings concludes that an
increase in maize export market price, exchange rate depreciations and increased
production levels improve maize export volumes, while inflation appeared to reduce
maize exports significantly as they become expensive. In long run, GDP and trade
Openness gave unexpectedly negative signs indicating an indirect relationship with
maize export supply. The study recommends stakeholders to consider maize grains
as tradable goods to be included in export credit schemes as improvement plans,
policy and advocacy issues to enhance sector contribution in the economy. |
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