Volume: 8 Issue 11 [November 2025]

Article:The effect of Exports and Imports on Economic Growth of Tanzania

Author: Salum Mariam Khamis

Volume: Vol 8, Issue 11; November 2025

DOI: . North American Academic Research, 8(11), 375-393. doi: https://doi.org/10.5281/zenodo.177657 01

Abstract: This study examines the impact of exports and imports on the economic growth of Tanzania during the period 2019–2024. Tanzania’s economy is characterized by a strong reliance on natural resource exports, particularly gold and agricultural products, while simultaneously depending on imports of industrial and capital goods. This structure has resulted in a persistent trade imbalance that poses challenges to long-term growth and macroeconomic stability. The research employs secondary time-series data obtained from the World Bank, the Organization for Economic Co-operation and Development (OECD), and the Tanzania National Bureau of Statistics (NBS). A quantitative approach was adopted, using multiple regression analysis and Granger causality tests to investigate the relationships among exports, imports, inflation, and gross domestic product (GDP) growth. The findings indicate that exports exert a significant positive effect on Tanzania’s GDP growth, supporting the export-led growth hypothesis. Conversely, imports generally exhibit a negative influence, largely due to the heavy dependence on industrial goods and capital-intensive products that constrain foreign exchange reserves. Inflation is found to moderate the trade–growth nexus, weakening the positive contribution of exports when price instability increases. The study provides important policy implications. It highlights the need for export diversification into agro-processing, light manufacturing, and service sectors, alongside strategies for import substitution to reduce dependency on foreign industrial goods. Furthermore, maintaining macroeconomic stability through effective inflation management is essential for sustaining the benefits of trade on growth. Overall, the study contributes to empirical evidence on the trade–growth relationship in Tanzania, offering guidance for policymakers, investors, and researchers on strengthening the role of international trade in achieving sustainable economic growth

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