Statistical Analysis of the Relationship between Exports and Economic Growth in Tanzania (1990-2022)

Aim of this paper was to investigate the impact of exports on Tanzania’s economic growth using annual time series data from 1990 to 2022. The analysis is focused on understanding the relationship between exports and Gross Domestic Product (GDP), with particular attention to how other macroeconomic factors might influence this relationship. Econometric method to achieve reliable results is used, First descriptive statistics to summarize the variables is completed. The stationarity of each variable is tested using the Augmented Dickey-Fuller (ADF) unit root test, as non-stationary data can lead to misleading inferences. This step ensures a valid basis for further analysis, particularly in determining long-term relationships. The long-term connection between exports and GDP is assessed by using the Johansen cointegration. Also, the Vector Error Correction Model (VECM) is applied. The VECM is useful in identifying both long-term and short-term dynamics. Alternatively, the Vector Autoregressive (VAR) model is utilized to examine the variables in the absence of a long-term equilibrium relationship. After data analysis by considering all important variables, it is concluded that there is a relationship between export growth led and economic growth in Tanzania.