Contribution of coffee exports on Uganda's GDP

Abstract

The study analyzed the Contribution of coffee exports on Uganda's GDP. This study was guided by the three objectives which included Testing whether GDP and Coffee exports data are stationary, Testing the direction of the relationship between coffee exports and GDP in Uganda and identifying the effect of other macro-economic variables on the country's GDP. The study employed a quantitative research approach using secondary data. The findings revealed that since the absolute T test statistic on the GDP data was (3.4935) in absolute terms is less than the critical value (6.595170) in absolute terms concluded that gross domestic product data was stationary which implied that the gross domestic product evolved around the mean value, similarly the findings on the other macroeconomic variables revealed that the coefficient of consumer price index (-0.304611) implied that a unit increase in the consumer price index on average lead to 0.304611 decreases in the country's GDP holding other factors constant and since the P- value (0.0013) was less than 0.05 the confidence level which implied that GDP is dependent of consumer price index, also the coefficient of inflation (0.925953) implies that a unit increase in the level of inflation will on average lead to 0.925953 increases in the country's GDP holding other factors constant and its P- value (0.0000) was less than 0.05 the confidence level, I we reject the null hypothesis and conclude that GDP is dependent of the level of inflation, the study recommends that the Government should give financial support to the small scale industries processing coffee for export as this will improve on the quality of the coffee exported thus improving on the country's Balance of trade, that tax holidays should be granted to new investors in the country as this will create a conducive environment for the investors willing to invest in the coffee sector and that the Government should encourage export of manufactured commodities than intermediate goods, since intermediate goods fetch less foreign exchange compared to manufactured goods.