Assessing the Impact of Internal and External Factors on Oilseeds Export Performance in Tanzania from 1990 to 2023

Abstract

This study examines the impact of internal and external trade factors on the export performance of oilseeds in Tanzania from 1990 to 2023. It uses secondary data sourced from the Food and Agriculture Organisation, the World Development Indicators, and the World Bank. Guided by preliminary diagnostic tests, the Autoregressive Distributed Lag–Error Correction Model was applied to estimate both short-run and long-run relationships. The findings show that a 1% increase in foreign direct investment reduces export performance by 0.22%. In contrast, the exchange rate exerts a strong positive effect, with a 1% rise improving export performance by 1.91%. World prices also strengthen performance, as a 1% increase raises export performance by 0.54%. However, trade liberalisation has the largest negative long-run influence, where a 1% increase results in a 2.17% decline in export performance. Overall, the study concludes that both internal and external factors play a significant role in shaping the performance of Tanzania’s oilseeds exports. The key determinants identified are foreign direct investment, exchange rates, world prices, and trade liberalisation. Based on these findings, the study recommends directing foreign direct investment toward export-oriented oilseeds activities to enhance competitiveness. It also advocates for carefully sequenced trade liberalisation supported by capacity-building, institutional strengthening, and improved infrastructure. Maintaining a competitive yet stable exchange rate is further encouraged to boost international market performance. Additionally, exporters are advised to monitor global price developments and adopt flexible production and marketing strategies to respond effectively to shifts in world demand.