The Contribution of Coffee Exports to Economic Growth in Uganda

Abstract

The study focused on the association between coffee export earnings and economic growth in Uganda and it specifically sought to examine the contribution of coffee exports and economic growth across twenty four years in Uganda, to find out the trend of GDP growth for Uganda, and to predict the effect of Coffee Export Earnings on the economic growth of Uganda. The study employed a research design which was used in analysis of data and to determine the ARIMA model to be used. The study found out that all the independent variables were insignificant at 5% level of significance except for Coffee export earnings. An adequate ARIMA model was chosen which was used for prediction and to interprete the results. The diagnostic tests in this study showed that the residuals of GDP growth were normally distributed, no presence of omitted variables, had common variances, had no serial correlation and no multicollinearity was detected. The study found out that only coffee export earnings was found to predict the economic growth of the country. The study recommended that the government through the UCDA needs to boost the quality and volume of coffee exported to other countries so as to increase coffee export earnings thereby promoting economic growth in Uganda.