Impact of exchange rate reforms on export performance in Tanzania

The study examines the impact of exchange rate reforms on export performance in Tanzania. The three objectives were pursued including exploring effects of reforms or exchange rate regimes on improvement of balance of payment, to examine the extent to which Export improvement is effected due to exchange rate reforms and to analyze how effective exchange rate devaluation has become disincentive to domestic imports. The study used desktop approach in collection of secondary data from books, websites, journals and magazines. Specific sources of secondary data includes Bank of Tanzania (BOT),United Nations Conference on Trade and Development (UNCTAD) ,National Bureau of Statistics (NBS ) and Tanzania Investment Centre (TIC).Apart from principal independent variable-exchange rate, the study captured other variables namely; Foreign direct Investment, Inflation and Labour. All of the variables resulted into having an impact on export performance. The study analyzed data by using Ordinary Least Square ( OLS) techniques for regression analysis and the results revealed that the exchange rate has significant impact on trade balance in the country; also FDI results shows a positive significant impact on export performance which was a case with Labour. Inflation shows a negative relationship with the dependent variable. Since the basics of production for domestic and finally exports still hold, the recommendations on appropriate policies are important. Agricultural policy, Investment Policy and both Fiscal and monetary policy are recommended for review, the recommended policies work hand and hand to stimulate production. Saving incentives are vital for capital accumulation which results into investment. The study emphasizes more on economic diversification for export improvement.