The impact of AGOA on Tanzania mainland exports performance

This study is set out to assess and analyze the impact of AGOA on Tanzania mainland exports performance, the case of textile and apparel sector. The study, which uses the 2001 - 2008 data, has compared Tanzania, Mauritius and Lesotho which are also AGOA eligible countries to export to U.S.A duty free and quota free. The revealed comparative advantage index, trade intensity index and descriptive analysis were used in this study. It was found that Tanzania’s average export potential of textile and apparel and export intensity are insignificant compared to those of Mauritius and Lesotho. The descriptive analysis revealed the factors hindering Tanzania in the utilization of AGOA export performance. Tanzania seems to be constrained by so many factors compared to Mauritius and Lesotho. Tanzania’s exports to U.S.A are mainly composed of persistent balance of trade deficit compared to Mauritius and Lesotho which always records the trade surplus. In order for Tanzania to utilize AGOA effectively, it has to enhance the construction of EPZ to facilitate quick attraction of FDIs. In Tanzania, resources for improving both soft and hard infrastructures should be mobilized in order to lower transaction costs and attract more investments. This is very crucial in the development of textile and apparel sector and other sectors. Technical assistance has to be enhanced in order to create capacity for Tanzania’s textile and apparel sector to achieve compliance with the U.S.A SPS and TBT. Tanzania should concentrate on looking for market access which is so near like EAC and SADC in order to decrease some disturbances such as transport cost and risks for perishable goods.