Relationship Between Gdp and Export

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RELATIONSHIP BETWEEN EXPORT AND GDP OF TANZANIA
SOPHIA IBRAHIM
MSc.in Computer Science
Abstract
This paper analyses the relationship between export and Economic growth of Tanzania and evaluate the relationship of these variables for the period of 2000-2010.It is observed from the data obtained from National Bureau of Statistics website that export is increasing for the period of ten years from(2000 – 2010) likewise GDP is increasing. Therefore these two items relate to each other. It can be concludes that policy makers has to establish strong policies to promote both agriculture and manufacturing as they have influence in GDP and all these promote export trade.
Key words: Export and GDP 1.0 Introduction
After Independency Tanzania adopted socialist economic policies where all major means of production and economy was controlled by the government. This caused decline in agriculture production which resulted from high inflation rate and low export and real GDP growth. The economy growth slowed down between 1986 and 1995 due to economic reforms and agriculture liberalization. Since 1996, Tanzania has taken aggressive steps toward macroeconomic stabilization and structural reforms. Agriculture constitutes the most important sector of economy providing about27% of GDP and 80% of workforce where cash crop including coffee, tea, cotton, cashewnuts, sisal, cloves and pyrethrum are used for export earnings. Mineral productions like gold, diamond and tanzanite presents biggest source of economic growth and provides over 3% of the GDP and accounts for half of Tanzania’s export.
The export sector is very important to the African economy. As a result export expansion represents an important source of economic growth. Most African countries have small and poorly developed domestic markets and must rely on foreign markets for the sale of their excess production. (Mbaku, 1989).
Tanzania recognized the role of exports that led to country being competitive and



References: Shombe, N. H. (2008) Causality Relationships between Total Exports with Agricultural and Manufacturing GDP in Tanzania, Institute of Developing Economies, Discussion Paper No.136 Easterly Stiglitz. J. E. (2007): Making Globalization Work for Developing Countries. W.W Norton & Company, Inc. Czinkota, Michael R., Ilkka A. Ronkainen and Michael H. Moffett. Fundamentals ofInternational Business. Mason: South-Western, 2004. Kalirajan. K.P and Shand.R.P. (1994). “Economics in Disequilibrium. An Approach from the Frontier”. MacMillan India. http://www.nbs.go.tz/takwimu/na/TzMainland_NA_2000-2010.pdf FouadAbou-Stait(2005)Are Exports the Engine of Economic Growth? An Application of Cointegration and Causality Analysis for Egypt, 1977-2003.

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