Determinants of Groundnut Export Performance in Tanzania: Evidence from Autoregressive Distributed Lag – Error Correction model (ARDL-ECM)

Leonard Nasania Mbigili Amani; Timothy Lyanga; Elna Lyamuya

doi:10.24925/turjaf.v14i9.2679-2689.8776

Authors

Leonard Nasania Mbigili Amani Department of Official Statistics, Eastern Africa Statistical Training Centre, P.O. BOX 35103, Dar es Salaam, Tanzania https://orcid.org/0009-0002-9977-7735
Timothy Lyanga The Open University of Tanzania (OUT), P.O. BOX 23409, Dar es Salaam, Tanzania https://orcid.org/0009-0007-9130-2600
Elna Lyamuya The Open University of Tanzania (OUT), P.O. BOX 23409, Dar es Salaam, Tanzania https://orcid.org/0009-0008-6710-824X

DOI:

https://doi.org/10.24925/turjaf.v14i9.2679-2689.8776

Keywords:

Groundnuts, export performance, export determinants, ARDL-ECM, exports

Abstract

This study examines the determinants of Tanzania’s groundnuts export performance over the period 1990–2023, focusing on both domestic and external factors within the framework of New Trade Theory. Using a time-series data, the study applies the Autoregressive Distributed Lag–Error Correction Model to analyse short-run dynamics and long-run relationships between groundnuts exports and key macroeconomic and sectoral variables. The results indicate that, in the long run, world prices, production quantity, and Foreign Direct Investment significantly enhance export performance, highlighting the importance of international price signals, productive capacity, and investment-driven efficiency gains. In contrast, GDP and trade openness exert a negative long-run effect, suggesting that Tanzania’s economic growth and trade liberalisation have been driven largely by non-tradable activities and limited competitiveness in the groundnuts sub-sector. In the short run, export performance exhibits strong persistence; however, increases in world prices, production quantity, and trade openness reduce exports due to adjustment costs, supply rigidities, and limited absorptive capacity. Therefore, the study recommends strengthening productivity in the groundnuts through improved seed varieties, extension services, irrigation, and better post-harvest handling. Policies also should focus on attracting export-oriented foreign direct investment, particularly in agro-processing and value addition. Again, trade liberalisation should be sequenced with investments in infrastructure, institutional capacity, and firm competitiveness to minimise adverse short-run effects. Additionally, the government should support exporters by improving market information systems and facilitating timely responses to international price movements. Maintaining a stable and predictable exchange rate environment is also essential to reduce uncertainty and support long-term export growth.

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