The macro-level determinants of Tanzania's coffee export performance to African and non-African countries

Mpi Y.  Mwaipaja; Charles P. Mgeni; Ntengua Mdoe

doi:10.51867/AQSSR.3.3.52

Authors

Mpi Y. Mwaipaja Sokoine University of Agriculture, Tanzania Author
Charles P. Mgeni Sokoine University of Agriculture, Tanzania Author https://orcid.org/0000-0002-8054-1928
Ntengua Mdoe Sokoine University of Agriculture, Tanzania Author https://orcid.org/0000-0002-3817-1214

DOI:

https://doi.org/10.51867/AQSSR.3.3.52

Keywords:

AfCFTA, Coffee Exports, Exchange Rate Competitiveness, Gravity Model, Tanzania

Abstract

Coffee is one of Tanzania’s most important traditional export crops and a major source of foreign exchange, rural employment, and agricultural income. Despite its importance, Tanzania’s coffee export performance varies considerably across destination markets, with exports largely concentrated in non-African countries while intra-African trade remains relatively limited. Understanding the macro-level factors shaping these export patterns is therefore essential for improving Tanzania’s trade competitiveness and regional integration. This study examines the macro-level determinants of Tanzania’s coffee exports to African and non-African countries using a structural gravity modelling framework. A panel dataset covering the period 2001–2024 is analysed using the Poisson Pseudo-Maximum Likelihood (PPML) estimator, which effectively addresses heteroskedasticity and the presence of zero trade flows commonly observed in trade data. The results show that importer Gross Domestic Product (GDP) has a strong and positive influence on Tanzania’s coffee exports in both African and non-African markets, highlighting the importance of market size in determining export demand. Exchange rate depreciation significantly improves export competitiveness, while trading with landlocked countries negatively affects export performance due to higher transport and logistics costs. Institutional factors also play an important role, with World Trade Organization (WTO) membership and the African Continental Free Trade Area (AfCFTA) demonstrating significant trade-creating effects, particularly in strengthening intra-African coffee exports. The findings suggest that strengthening AfCFTA implementation, maintaining competitive exchange rate policies, and investing in transport and trade infrastructure are essential for enhancing Tanzania’s coffee export diversification, regional trade integration, and long-term competitiveness in global markets.

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