Impact of international trade on the economic growth of Uganda: a case study of Uganda 2012-2022

Abstract

The study aimed at determining the impact of international trade on economic growth in Uganda for the last eleven financial years and capturing GDP performance in the time period with exports, imports, foreign direct investments and international trade revenue as the independent variables whose data was sourced from the World Bank database. This was aimed at ascertaining the net benefit of Uganda in international trade agreements so as to be in position to meet its development and recurrent expenditure to meet her vision 2040 as well as meet international development requirements through the SDG’s. A quantitative time series analysis was done using stata at both levels of analysis i.e. univariate, bivariate and multivariate to ably answer the research questions and objectives. It was found out that exports had Exports had a statistically significant positive impact on GDP (t=4.22, p-value= 0.006 < 0.05) at 95% level of confidence more so, FDI’s exhibited a statistically significant negative impact on GDP (t= -3.07, p-value= 0.022 < 0.05) at 5% level of significance. Imports and international trade revenue on the other hand were not statistically significant. The study was able to fill the information gap and insights concerning international trade and economic growth. It clearly sighted out the major aspects and the strength of their impact i.e. exports and FDI giving focus on how policy makers, institutions and the private sector can revamp economic growth in Uganda. The findings can better be used in policy formulation to boost international trade and the benefits realized and its recommendations can shape the health system for better performance which included; the Government to focus on the exportation of quality output through value addition, clear and favorable policies should be spelt concerning foreign direct investments to boost their contribution, importation of capital goods to ensure value addition and capital formation. In conclusion, this research emphasizes the critical role of international trade in Uganda’s growth and development. It provides policy makers, private and public players with valuable insights to inform evidence based interventions aimed at improving the performance in foreign markets to ensure sustainable rewards and long-term strategies for development.