Analysis of the impact of export revenue on gross domestic product (GDP) in Uganda for the period 1999-2018

Abstract

The study used regressive model to investigate the impact of export revenue on Uganda’s GDP for the period between 1999 and 2018. As Uganda’s economy was striving to achieve the Millennium Development Goals (MDGs) by 2015 and the vision 2040, the export sector was ear-marked to play a vital role in achieving rapid economic growth in developing this country through industrialization to reduce the high levels of unemployment. The government also issued several investment and policy incentives as “sweeteners” which included reductions in export duties; reductions in corporate tax rates-including tax holidays; creating a one–stop shop to reduce time needed to approve and register investments; reducing minimum capital requirement; expansion of markets through economic integrations; ensuring economic and political stability. This paper has been based on a comparative analysis focusing on why there was an increase or a decrease in GDP in Uganda, related with export revenue. Ordinary least squares models was used to explain whether total export revenue, invisible (service) exports, agricultural exports and industry/manufactured exports affects Uganda’s GDP based on a panel dataset for 20 years over the period (1999 to 2018). The study identified Total Export revenue having a positive and significant impact on Uganda’s GDP. The study also identified revenue from the service sector and agricultural sector having a positive significant impact on Uganda’s GDP. Export revenue from the industry/manufacturing exports; however had a negative and insignificant impact on the country’s GDP.