The African growth and opportunity act (AGOA) and export performance: a case study of the united republic of Tanzania in relation to its east African partner states

Abstract

This study assesses the effectiveness of the African Growth Opportunity Act (AGOA) on the export performance of Sub-Saharan African countries (SSA) countries. Tanzania’s export performance in relation to that of the other three East Africa Community (EAC) partner states, namely, Kenya, Rwanda, and Uganda, is investigated. The study employs a traditional trade model based on the Ordinary Least Square (OLS) procedure, covering the pre-and post-AGOA period from 1990 to 2020, 11 years before the signing of AGOA and 20 years after it. The main differences between this study and previous studies assessing the impact of AGOA preference include a longer sample period, the techniques of treating the model in the empirical analysis, and the number of countries assessed that allows to observe what differentiates the AGOA’s impact on SSA countries. A panel model showing the overall impact of AGOA, and individual country regressions are estimated. The panel results show no impact of AGOA on the export performance of the EAC partner states, while to the individual country findings indicate that AGOA has a significant impact only on the total exports of Kenya, to the country of interest that is Tanzania is insignificant. The policy implications of the findings are discussed.