Determinants of Tanzanian Exports in the Light of Gravity Model Results

Marcin Salamaga, Raphael Erineus Haule
Statistika, 106(1): 83–91
https://doi.org/10.54694/stat.2025.1

Abstract
Tanzania's exports are mainly based on unprocessed agricultural products and mineral resources, which is not beneficial and does not improve the international competitiveness of the country's economy. Proper identification of factors that provide opportunities for improving the situation in Tanzanian exports requires the construction of appropriate econometric models. This paper proposes the use of a gravity model of trade, as it allows for the inclusion of foreign trade flows in bilateral relations. This paper argues that in gravity models, foreign direct investment (FDI) inflow limits Tanzanian exports. Factors that have a significant and positive impact on Tanzania's exports are GDP of partner countries, GDP of Tanzania, imports of Tanzania, the common language and the colonial ties with partner trading countries. The results presented in the article allowed for the indication of the strengths and weaknesses of Tanzanian exports and the formulation of recommendations that may be useful for decision-makers in taking actions to improve the competitiveness of the Tanzanian economy.

Keywords
Export, gravity trade model, competitiveness of the economy, Tanzania