Tanzania in the Face of International Trade: The Analysis of Revealed Comparative Advantage from 2009 to 2012 Tanzania in the Face of International Trade_ Analysis of Revealed Comparative

8/12/2019 Tanzania in the Face of International Trade: The Analysis of Revealed Comparative Advantage from 2009 to 2012

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International Journal of Business and Economics Research2014; 3(1): 15-28Published online March 10, 2014 (http:!!!"sciencepublishin##roup"co$%i%ber)doi: 10"11&48%"i%ber"20140301"13

Tanzania in the face of international trade: the analysis of

revealed comparative advantage from 2009 to 202Nuran Ally Mwasha, Zabibu Kweka

1'chool o cono$ics * +usiness d$inistration, entral hina .or$al /niersit, uhan, hina2olle#e o nor$ation Mana#e$ent, entral hina .or$al /niersit, uhan, hina

Email address:nuranallahoo"co$ (." " M!asha), abibu6!e6a#$ail"co$ (7" !e6a)

To cite this article:.uran ll M!asha, 7abibu !e6a" 9anania in the ace o nternational 9rade: 9he nalsis o eealed o$paratie danta#e ro$

200< to 2012"International Journal of Business and Economics Research.=ol" 3, .o" 1, 2014, pp" 15-28"

doi: 10"11&48%"i%ber"20140301"13

Abstract: 9anania is the $ost pro$isin# current and the destination $ar6et or the !orld trade due to its copiousresources and strate#ic location" t is !ell 6no!n in the re#ion as the trade hub as it proides the inluential and suitable trade

solutions and inest$ents" 9he aspiration o this paper is to analse the eealed o$paratie danta#e () or the

top$ost e>port sectors and co$$odities in 9anania ro$ 200< to 2012 b inspectin# and ealuatin# its potenc and

co$petence in the !orld $ar6et co$pared to e>ports ro$ other countries" +alassa?s inde> o o$paratie adanta#e ()

!as utilied to de$onstrate the co$petitie sectors and co$$odities co$paratie adanta#e to#ether !ith e>port data ro$

/. co$-trade and nternational 9rade entre (9)" 9he outco$es sho! that 9anania has si#niicantl stron# co$paratie

adanta#es in sectors o traditional cash crops such as coee, tea and spices and co$$odities ound in $ineral resources as

the leadin# e>port sector and co$$odities or the period o our ears !ith #reater than one" @o!eer, $an sectors

de$onstrated lo!er co$pared to indiidual co$$odities and the e>port products hae been !anin# eer ear, the

situation that needs the #oern$ent to initiate the i$$ediate $easures to oerco$e such proble$"

Keywords: eealed o$paratie danta#e, >port Processin# 7ones, 9anania, nternational 9rade

1 !ntroduction

/nited epublic o 9anania (/9) is one a$on#st

rican countries in !hich its econo$ is #ro!in# at a

considerable pace acco$panied b the #reatest resource

potentials and enor$ous inest$ent destinations" t is a

union o t!o countries !hich are 9an#ani6a and 7anibar

united in 1


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1& .uran ll M!asha and 7abibu !e6a: 9anania in the ace o nternational 9rade: 9he nalsis o eealedo$paratie danta#e ro$ 200< to 2012

Mt!ara seaports" n 2012, the Bar es 'alaa$ port reported to

handle a total olu$e o 12"1 $ tones and the #oern$ent

e>pectin# to inest J1"5 billion or reurbishin# and

constructin# ne! acilities and port inrastructures

(Portstrate#, 2013)"

Cn the other hand, 9anania has three #reat la6es !hich

are =ictoria, 9an#ani6a and .asa !hich open the lin6s

!ith nei#hborin# countries li6e /#anda, Be$ocratic

epublic C on#o, 7a$bia, !anda, +urundi, Mala!i and

other nei#hborin# states" bout aiation industr, 9anania

has three $ain airports !hich are Kulius .erere

nternational irport (K.), 7anibar nternational irport

(7) ili$an%aro nternational irport ()" 9o#ether

!ith other s$alllocal airports !ithin the re#ions $ore than

50 (M', 200ternal !orld" urther$ore, 9anania has endo!ed !ith

the enor$ous natural resources, includin#, a$on# others,are $inerals li6e #old, dia$ond, 9ananite, copper and

coal to#ether !ith oil and #as (9, 2013 * M', 200le, 200< *

Funo#elo et al, 2010)"

ii" s the best period to ealuate the ob%ecties o >portProcessin# 7ones (P7s) ct, !hich !as established

in 9anania in 2002, and to be a$ended on 200& to

orti and ad$inisterin# pro#ra$" ccordin# to /9,

P7 (200&), P7s ai$ed to attract and encoura#e

inest$ent or e>port, hearten technolo#ical shit,

boost the oerseas e>chan#e earnin#s and to #enerate

the e$plo$ent"

Moreoer, this paper is #oin# to proide a brie econo$ic

situation ro$ 1


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nternational Kournal o +usiness and cono$ics esearch 2014, 3(1): 15-28 1E

the !hole reenue increased ro$ 14 G o RBP in 1i$iin# production or do$estic and international

$ar6et" nother i$portant theor is o$paratie

danta#e theor b Baid icardo, (181E) !hich statesthat, it is better or the countr to specialie in the production

o #oods !hich it can produce ar $ore eicient and bu

ro$ other countries #oods that it is less eicient in

production" 9his !ill $a6e both countries to $a>i$ie their

production b increasin# output and $a6e their consu$ers

pa less and utilie $ore or both #oods (@ill, 2008:

hin#arande et al, 2013; ru#$an * Cbsteld, 200&: Pu#el,

2005 * Mu$ara et al, 2012)" 9he icardian theor has

been supported $uch b @ec6sher-Chlin !ho oers $uch

eidence, considerin# the actor endo!$ent, a countr is

considerabl o hi#h co$paratie adanta#e i it e>ploit !ell

its obtainable resources (id#ren, 2005 as cited b

Mu$ara et al, 2012)" o$paratie danta#e o a nation as

it is characteried b ree trade is $ore aected b .ational

trade policies !hich can aor e>ports and li$it i$ports

ro$ others and i$port duties on trade (Pu#el, 2005; @ill,

2008:10& * ru#$an * Cbsteld, 200&)

ith reerence to dierent studies, li6e Pearson * Meer

(1portin# and i$portin# dierent co$$odities and products

ro$ the partners? $ar6et countries, includin#, a$on# others,

to ast rican countries li6e ena, /#anda, +urundi and

!anda as their i$ple$entation o the usto$s /nion

protocol or the partner states to encoura#e e>port a$id

$e$ber states or econo$ic adance$ent (saac * thena,2011 * M', 200ports

increased ro$ J 2"413 billion in 2008 to J2"E44 billion in

200


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18 .uran ll M!asha and 7abibu !e6a: 9anania in the ace o nternational 9rade: 9he nalsis o eealedo$paratie danta#e ro$ 200< to 2012

sector has been ir$l increasin# !hich is accelerated b

e>portation o #old as it recorded the e>port o J 8"E billion

in 2012, $ore than 18G o the recorded percent in 2011,

!hich !as E"4G, !hile i$port had a sli#htl incre$ent onl

J0"E billion ro$ J12 billion to J12"E billion in 2011 and

2012 respectiel (rican cono$ic Cutloo6, 2013)" n

2011 the econo$ #ro!s at an aera#e rate o &"4G, !hile

re$ainin# elastic and is cataled b $anuacturin# sectors,

a#riculture, transport and co$$unication, $inin# sectors,

and currentl the discoer o oil and #as about 33 trillion

cubic eet, !hich !ill lead the countr to access $ore than

J10 billion to acilitate the inest$ents NibidO"

9hereore, 9anania e>port ro$ 2000 to 2012 hae been

surpassed $an countries in the !orld, includin# Mauritius,

Malasia, +rail, 9hailand and 9unisia, !hich $a6e the

total $erchandise e>port in 2012 increased to about J 5"2

billion NibidO"

$i%ure 1.The top 5 Countries received more export products from Tanzania from 200 ! 20"2. #$ources% International Trade Centre&

1.2.&. Revealed 'om(arative )dvanta%e *R')+

s hae been alread discussed, the countr co$paratie

adanta#e #enerall depends on the econo$ist ie!s about

the trade pattern and production capabilities !ithin a countr"

n the absence o trade, the co$paratie adanta#e is

$easured indirectl as ar as it cannot be discoered b

analin# it b applin# the co$paratie prices1" Bierent

scholars hae e>plained the eealed o$paratie

danta#e dierentl, but ocusin# $uch on !hat countr is

intensiel capable o producin# b e>a$inin# the trade

$odel and its productiit" eealed o$paratie

danta#e nde> reers to the ratio o the countr?s total

e>port o the hi#h productiit co$$odit in its totale>ports and the share o the !orld e>ports o the si$ilar

co$$odit in total !orld e>port NbidO" is a $easure o

the acAuired output b the countr in the current trade

pattern (Mu$ara et al, 2012)" t e$plos the trade patterns

to spot out the hi#hl co$petitie econo$ic sector in the

countr b ealuatin# the !orld aera#e !ith the countr?s

trade proile" 'erin * ian, (2008) describe the +alassa

nde> as a $easure o a certain nation, ordinar and

preerence e>port portion considerin# ho! !orth are other

nationQs e>ports in the si$ilar industr in the !orld ($ore

1 http:!!!"unescap"or#tidartnet"pd

reie! in id#ren, 2005 * +atra * han, 2005)" t !as

e$anate b Fiesner and i$proed $ore b +alassa in (1, $eanin# the ollo!in# si#niicances can be

depicted such as it assist to reco#nie #ood sectors or

inest$ents and the co$$odities o priorities, it is hi#hl

Aualiied or dna$ic eniron$ent or trade as it reduces

!asta#e o eorts to disadanta#eous co$$odities, led tospecialiation !hich is suitable or the co$petitie $ar6et

and it sho!s actors that can cause the trade patterns such as

trade policies and actor endo!$ents"

+alassa inde> has been used b dierent studies and

researches to $easure and co$pare dierent sectors o

econo$ies #loball" hin#arande et al, (2013) used to

inesti#ate the co$paratie adanta#e o ast rican

o$$unit () $e$ber state and their econo$ic

peror$ance" t depicted that all $e$ber states hae ,

ho!eer, in a e! products and hae !ell peror$ed

econo$icall" +atra * han, (2005), e>a$ine the structure

o the co$paratie danta#e o hina and ndia in the!orld $ar6et and realied a$on# other thin#s, there are


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nternational Kournal o +usiness and cono$ics esearch 2014, 3(1): 15-28 1a$ine the source o co$paratie

adanta#e? b Muriel * 9erra (200port o product %? in countr i?

ViUi% - 9he total e>port in countr i?

V%Ui%W 9he total e>port o product %? in the !orld

ViV%Ui%W 9otal e>port o all product %? in the !orld

9he description o +alassa?s inde> is as ollo!s; i the

countr e>hibits the #reater than one, obiousl it !illhae eealed o$paratie adanta#e in that product (

X 1)" nd i it displas the eealed o$paratie

danta#e less than one ( Y1), clearl the countr !ill

hae a co$paratie disadanta#e in that product (+alassa

1ports"

ts e>port alue in the !orld $ar6et is #ro!in# up to 2&G

per ear" 9he second is e#etable te>tile ibres nes; paper

a$ and !oen abric !ith (28"5), !hich is 15"50G or

9anania and 0"5EG a share o the !orld e>ports !ith

its #lobal #ro!in# e>port alue o -11 G" 9he third is ores;

sla# and ash !ith (18"3) contribute to port share o 53G per ear" 9he

third is tobacco and $anuactured tobacco substitutes (15"ported to the #lobal

$ar6et in !hich 380 products had " sector !hich has

hi#hest represented b e#etable te>tile ibres nes,

paper arn, !oen abric !ith (1periencin# the decline o

its #ro!in# e>port alue or -2G per annu$" t !as ollo!ed

b coee, tea, $ate and spices !ith in (1E"0) eAuals to

12"1G o all !hich is attributed to the #ro!in# alue to

the !orld $ar6et or 12G annuall" 9he third co$$odit

that ta6es pleasure o the #lobal $ar6et adanta#e is theCres, sla# and ash !ith o (15"5), contribute 11G o all

9anania " 9he ear 2012 e>perience the sudden drop

o $ore that 25G o the products e>ported to the !orld

$ar6et ro$ 1,E55 in 2011 to 1,1E< in 2012, and the

e>ported products !ith dropped to 353 ro$ 380 in

2012" 9he sectors that hae the beneit o the !ere 2E

out o tile ibres

nes, paper arn, !oen abric sector (@'" 53) and 9obacco

and $anuactured tobacco substitutes (@'" 24), share the top

position !hen the (@' 53) lead all sectors at @' 4 di#it leel

in 2011 !ith the o 1


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Tale 1. The top three sectors and their potential commodities 'ith hi(hest RC) in each *ear from 200+,20"2.

&ear '( )ode (ector descri*tion +)A 1 +)A ) )ode )ommodity descri*tion +)A 1 +)A

"--.

0< oee, tea, $ate and spices 28"&0tile ibres nes, paper

arn, !oen abric28"5 5300

(.o an co$$odit portraed the at @s 4-

di#it leel)"

2& Cres, sla# and ash 18"3 2&1& Precious $etal ores and concentrates" 834"5

"-1-

0< oee, tea, $ate and spices 1E"80tile ibres nes, paper

arn, !oen abric1a$ple, tea and coee had o 5E"0

and 24"1 in 200< !hich dropped to 15"5 and 24"8

in 2011 beore it rose a#ain to 35"0 and 44"E"

Precious $etal ores and concentrates alue decreased

ro$ 834"5 in 200< to 381"0, in 2011 beore it ades a!a intop three co$petitie co$$odities entirel b 2012"


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nternational Kournal o +usiness and cono$ics esearch 2014, 3(1): 15-28 21

Man#anese ores and concentrates to#ether !ith tobacco

un$anuactured; tobaccos reuse is a$on# the e!

co$$odities that e>perience a positie trend in 2010

and 2011, !here it hold an to 2port alue is bi# enou#h" or the period

since 200< to 2012, so$e co$$odities $aintained their

status or both and their e>port alue !hile others

decline considerabl and shit ro$ the top ten e>port

co$$odities transported in the #lobal $ar6et" n all ears,

#old, non-$onetar (>cl" Rold, ores oncentrate) (@'

port alues ro$ 9anania

to the !orld $ar6et, ollo!ed b Metallierous ores and

$etal scrap (@' 28cl"

#old, ores oncentrates) port data

ZZ - 9he nu$erator represents the position o 9anania a$on# other countries !hich e>port the sa$e co$$odit or product, and deno$inator represent total

nu$ber o all countries e>ported that co$$odit"

9able 2, sho! the o the top 10 co$$odities

e>ported ro$ 9anania to the !orld $ar6et ro$ 200< to

2012, ealuatin# its co$petence and stabilit in the $ar6et,

it sho!s that the co$$odit that lost its co$petitieadanta#ethehe e$er#ed and the one !hich $aintained its

position" irst colu$n describe the co$$odit e>ported

ro$ 9anania to the !orld $ar6et, second colu$n sho! the

co$$odit codes to identi the co$$odit, third is

co$$odit or 200portposition or ran6 hold b that co$$oditproduct in !orld


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$ar6et, ith colu$n sho!s the o all co$$odities in

2010, si>th is its position in the !orld $ar6et, seenth

or 2011, ei#hth colu$n is position o product in 2011, ninth

colu$n is co$$odit in 2012 and colu$n 10 is the

ran6 or co$$odities e>ported in 2012"

&.2.2. R') 3ariation *R') 4ovement+nother i$portant and noticeable point is that, there is a

decline o e>port o $an co$$odities in the t!o ears

successiel, !hich is 200< and 2010 and so$e up to 2011,

!hile sho! the sudden recoer in 2012" 9his can be seen

throu#h dierent product peror$ance as ollo!s; Rold,

non-$onetar (>cl" #old, ores" oncentrate), $etallierous

ores and $etal scrap, 9!ine, corda#e and 'esa$e ('esa$u$)

seed, all in total aera#e o 45"1G" t the sa$e ti$e, others

en%oed the co$paratie abilit in the #lobal $ar6et"

>a$ple tobacco and tobacco $anuactures (@' 1212), rose

ro$ 44"25 to 4tile

arn, abrics, $ade-up articles n" e" ' 1"03 to 33"tile arn, abrics, $ade-up articles, n"e"s" etc 1"0-18"E

3 (ectors that lost the +)A 3 )ommodities that lost +)A

1" =e#etable te>tile ibres nes, paper arn, !oenabric 28"5-2&"0 1" Rold, non-$onetar (>cl" #old, ores oncentrates) 28-20"8

2" Cres, sla# and ash 18"3-15"5 2" Metallierous ores and $etal scrap &tile ibres 45"tile ibres (@' 2&31) #ro! up ro$ o ported

#oods alued J 5"E $illion includin# tobacco (Bail .e!s,

2013)2"

t has been discoered that, so$e co$$odities hae #reat

alues in the !orld e>port, but contain e!er or less than one

in the !orld $ar6et" 'o$e co$$odities appeared in

2 http:!!!"dailne!s"co"tinde>"phpeatures2132port-bailout"

the top $ost e>port lists in 9anania contained $ore than

800 co$$odities !hile hae er s$all or less than one

" >a$ples o these co$$odities are Medicinal and

phar$aceutical products (@' 542)? !hich hold the tenth (10)

position in e>port alue and 'pecial transactions and

co$$odities not classiied accordin# to 6ind (@' port data 200< to 2012, there are

so$e other sectors !ith less than 1 but so$e o its

constituent co$$odities reeal a co$paratie adanta#e in

the !orld $ar6et" + $entionin#, include, a$on# others, are'hips, boats and other loatin# structures !ith (@' 8


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nternational Kournal o +usiness and cono$ics esearch 2014, 3(1): 15-28 23

the o 0"1 in a##re#ate leel, !hile !ithin the

co$$odit leel the tu#s and pusher crat (8port data

eer to table 4, it sho!s a$on# the e>port sectors !ith aco$paratie disadanta#e !hile so$e o their co$$odities

hold co$paratie adanta#es" olu$n one sho!s the @'

code or sectors, colu$n t!o are sectors, colu$n three is an

or sectors, colu$n our are co$$odit codes, colu$n

ie sho!s speciic co$$odities and the si>th colu$n sho!

the or co$$odities

ron and steel sector (@' E2) e>hibit less the one , but

at co$$odit leel it carries suicient co$paratie beneits"

ithin this sector there are three co$$odities !ith #reater

, !hich are errous !aste and scrap; re$eltin# scrap

in#ots or iron or steel (@' E204), +ars * rods o

ironnon-als, n! than or#ed, hr, hd, hot-e>truded

(@'E214) and !ire o stainless steel (@' E223),

de$onstrated the in 2"4, 1"8 and 1 respectiel 2012"

urther$ore, ice (@' 100&) and Rrain sor#hu$ (@' 100E)

in the cereals sector (@' 10) !ith 0"5, reealed a

co$paratie adanta#e o 1"< and 2 !hich is aboe the

accepted leel"

&.5. General $indin%#

eealed co$paratie adanta#e depicted seeral 6e

issues about 9anania e>ports b usin# data ro$ /.

o$trade and nternational 9rade entre >ports" 9his

paper used our (4) di#it leel o @' cate#oriation or both

ears ro$ 200< to 2012" 9he analsis portraed that,

9anania has a #reat co$paratie adanta#e throu#h

indiidual co$$odities !hich e>cels een in the sectors

!ith co$paratiel disadanta#ed" Man sectors sho!

instabilit in its reealed co$paratie adanta#es co$pelled

so$e o the$ to all dra$aticall ro$ the top$ost leel and

lost their co$petence in the #lobal $ar6et" 9raditional

products li6e coee, $ate spices and tie, to#ether !ith

tobacco and its in#redients are the onl sectors that e>hibited

the increasin# trend since 200port position alue b decline a$icabl and$oe a!a ro$ the top ten o the 9anania e>port

co$$odities" 9hese include Rold, non-$onetar

(>cludin# #old, ores oncentrates), Metallierous ores and

$etal scrap, t!ine, corda#e etc" and 'esa$e ('esa$u$)

seed" Moreoer, other co$$odities li6e tobacco and tobacco

$anuacturers, po!er-#eneratin# $achiner and eAuip$ent

and 9e>tile arn, abrics, $ade-up articles, n"e"s !ere able to

enlar#e their e>port peror$ance and alue" 9he $ain

distin#uished point here is that, it is not so custo$ar or

co$$odities or sector to $aintain its !hen e>a$ined

accordin# to @' 4 di#it leel to!ard others in the !orld

$ar6et" sector !ith (@' 53), e#etable te>tile ibres, nes,

paper a$, and !oen abric !hich has in 2&"0,

appeared to hae no co$paratie adanta#e in an o its

co$$odities !hich $a6es it stand itsel as a sector !ith

#reater than one" n this case eer sector in 9anania

!hich did not sho! #reater or eAual to one accounted

or E2G o all sectors, can be eAuipped, !ell throu#h arious

resources to adance and intensi the countrQs e>port

industr"

ccordin# to this analsis, 9anania e>ported a total o

&253 products in the !orld $ar6et ro$ 200< to 2012,

aera#el 15&3"25, but onl 23"5G to 2&G hae been

reealin# co$paratie adanta#e to international $ar6et"

9he total aera#e is decreasin# eer ear as the data sho!that, in 200< the total e>port !ere 1&1&, !hich decreased

spontaneousl to 1,1E< e>ported products in 2012, eAuals to

2EG decline" n addition to that it has been realied that, the

products !ith !hich is #reater than one also

de$onstrated the decline o its alues in e>ports since 200perts b increasin# the enroll$ent in

a#riculture trainin# colle#es, increasin# $ore a#riculture

uniersities than dependin# solel on 'o6oine /niersit,

proidin# adeAuate subsidies to ar$ers and ealuate its

peror$ance annuall, acilitatin# re#ular a#ricultural

co$$unit education and to orti a#riculture annual

bud#et and transparenc upon its disburse$ent"

&... E(ort Re#triction to e Reduced

Man countries in the !orld introduce i$port or e>port

duties or dierent ai$s, but $ostl to preent the internal

$ar6et or co$$odities or products ro$ the orei#n

countries" 9hese duties in one !a or another hae the

i$pact on e>port or do$estic producers and ir$s, astraders across the borders !ill hae lo! de$and or

co$$odit e>port dependin# on the current $ar6et and the

countr #eneral econo$ic situation" >a$ples, or ar$ers

to e>port their co$$odities outside 9anania there are

special ta>es hae to be paid" +ut dierent studies, li6e

MP, (2013), eidenced that those ta>es hae no beneit

to ar$ers rather to add a cost burden on their shoulders, the

act that $a co$pel the reduction o the e>port process"

9hereore, the #oern$ent to e$po!er the e>port sectors in

9anania b increasin# the e>port rate, the polic $a6ers

hae to 6no! that introduction o ta>es on e>port !ill

al!as i$pede it, hence the hae to restructure the e>port

policies b $a6in# an interention on dierent barriers to

see ho! the can acilitate the e>port actiities and also !ill

not %eopardie the !hole e>port sste$ b discoura#in# the

i$petus or indiidual producers and ir$s"

&..6. )ttractin% more $orei%n /irect "nve#tment *$/"+

orei#n Birect nest$ents, proide an opportunit or

the countr to receie orei#n inestors in dierent sectors

o the econo$" or a countr li6e 9anania to i$proe its

e>port peror$ance, it has to inest $uch in $anuacturin#

sectors, since in $anuacturin# products has less

co$paratie adanta#es or a lon# ti$e" + initin# and

attractin# B in $anuacturin# sectors, 9anania !ill beable to produce $ore $anuactured #oods to be sold

do$esticall and or e>port, !hich !ill act as a ehicle to

produce $ore co$$odities in dierent sectors" Cther

e>pected inluence ro$ B includes the technolo#

transer, e$plo$ents and co$petitie hu$an capital

!or6orce" @u$an capital is a er i$portant aspect o

production as it contains the 6no!led#e and e>perience

related to dierent sectors !hich is intended to increase the

e>pected alue (M!asha, 2013)" dditionall, the incre$ent

in B !ill e>pand the 9ananian $ar6et, includin# a$on#

others ast rican o$$unit $ar6et, 'outhern rican

Beelop$ent o$$unit ('B) $ar6et, the uropean

/nion and R in /'" 9hereore 9anania has to use

eectiel the partners $ar6et especiall nearb countries


12/14

2& .uran ll M!asha and 7abibu !e6a: 9anania in the ace o nternational 9rade: 9he nalsis o eealedo$paratie danta#e ro$ 200< to 2012

!hich !ill cost, e!est a$ount in e>port and also proide

the chance or s$all business to #ro! as the can e>chan#e

trade and serices throu#h boarders !hich ulti$atel

increase the national reenue and increase per capita

inco$e"

&..7. Stren%t!enin% t!e 'urrenc, and 'ontrollin%"nflation Rate

9ananian shillin#s (9'@) hae been depreciatin#

considerabl a#ainst the /nited 'tates Bollar (/'B) !hich

is used as the $ain base currenc or international e>chan#e

in 9anania" 9his has been inluenced b $an actors, but

the trade deicit, !hich is acco$panied b hi#her i$port

than e>port hold the #reat portion" 9he #oern$ent has been

dealuatin# the currenc since 1pensie" ll these !ill

au#$ent the co$$odit prices and other serices led to the

rise o inlation" @i#h inlation rate attributed to hi#her

interest rate !hich !ill al!as deteriorate the do$estic

currenc" 9his situation !ill hae the aderse i$pact on

e>ports in the !orld $ar6et" 9hereore the #oern$ent

should !or6 hard to co$bat the inlation rate and control the

e>chan#e rate sste$ !hich is the potential actors or

restructurin# e>port"

&.6. /irection for $uture Re#earc!

9he analsis o 9ananian reealed co$paratie

adanta#e hae uncoered i$portant areas !hich need

urther studies or the deelop$ent o e>port and

i$proe$ent o Aualit and Auantit products and

co$$odities in the !orld $ar6et" 9he ollo!in# areas need

the co$prehensie studies;

Man sectors aera#e E2G de$onstrate co$paratie

disadanta#es !here as out o a total aera#e o 15&3"25

products e>ported or 4 ears is onl an aera#e o 2&G hae

co$paratie adanta#e" 9hese results are not i$peratie

potential or the #ro!in# econo$ li6e 9anania" esearch

is needed to be conducted intensiel to e>a$ine and

analse the $ain source o the proble$, 9anania hasabundant resources and has portraed potential eatures that

it can co$pete !ell in international $ar6et, but is onl e!

sectors and co$$odities $ana#ed to co$pete, !hile as the

ti$e elapses $ost o the$ lose their e>port and alue"

lso, the stud has to proide the ra$e!or6 on !hich

$easures should be ta6en b #oern$ent and co$$unities

to restore sectors and co$$odities !hich lost their

ho! to #ear the$ up and $aintain the e$er#in# one"

lso the analsis discoered that, so$e sectors hae the

hi#hest co$paratie adanta#e !hile its constituent

co$$odities does not hae, at the sa$e ti$e so$e

co$$odities has !hile in its a##re#ate leel has

co$paratie disadanta#e" 9he stud has to e>a$ine the

inluential actors or that situation, ho! does the in

a##re#ate (sectoral) and co$$odit leel can aect each

other and !hat !ill be its i$pact in the econo$"

urther$ore, to#ether !ith the #reatest eort !hich hae

been e$ploed b the #oern$ent to i$proe the e>port

sector b establishin# t!o econo$ic ones, the >port

Processin# 7ones (P7s) act 2002 and 'pecial econo$ic7ones ('7s) (/9, P7 (200&), the analsis e>hibit that,

the nu$ber o e>ported products in @' 4 di#it leel is

decreasin# si#niicantl at an aera#e rate o 2"port alue"

esearch is needed to deter$ine the inluence or i$pact o

e>chan#e and inlation rate to the decline o the e>port and

to !hat e>tent does these t!o ariables aect the e>port"

nother i$portant area to be studied is that, to !hat

e>tent does the policies in eer sector to#ether !ith e>port

polic aects the do$estic production and e>port rate to the

!orld $ar6et" Roern$ents create and establish rules and

re#ulation to #oern speciic pro#ra$s and proide thera$e!or6 on ho! social econo$ic actiities can ta6e place"

nclude a$on# others, the #oern$ent policies that $

aects the trade, !elare, includin# e>port are taris, duties,

ta>es, Auota and other e>port restrictions" eerence to

+onarria et al, (200port or i$pin#e on e>port prices !hich ulti$atel !ill

denature the !hole e>port process" 9hereore, urther stud

is needed to elucidate ho! does this polic aect the

production and e>port and to su##est the aluation $easures

that !ill sti$ulate e>port led econo$ !hich !ill reduce the

current 9ananian trade deicit"

6 )onclusion

9his paper analses 9anania eealed o$paratie

danta#e in dierent sectors and co$$odities b usin# @'

4 di#it co$$odit leel, usin# e>port data ro$ /.

o$trade to e>a$ine the co$paratie adanta#e o the top

ten e>port co$$odities in 9anania and nternational 9rade

entre (9), !hich proide e>port data or both sectoral

peror$ance and its co$$odities" ccordin# to the analsis,

9anania e>port peror$ance is subseAuentl increasin# in

collaboration to its eealed co$paratie danta#e as it

!as ound that there !as onl t!o co$$odities !hich hadhi#her e>port alue !ith less than one na$el


13/14

nternational Kournal o +usiness and cono$ics esearch 2014, 3(1): 15-28 2E

Medicinal and phar$aceutical products and 'pecial

transaction not lassiied" lso 9anania de$onstrated

concurrentl ro$ 200port sector" 9anania has a stron# co$paratie

adanta#e in these co$$odities in the !orld $ar6et

acco$panied b other co$$odities !hich !as analsed in

this paper" 9he i$portant thin#s the #oern$ent should do is

to $a6e the potential plans ater the disappearance o these

$inerals as $ost o the$ are non rene!able, !hat other

sources o e>port !ill replace these leadin# sectors" lso the

#oern$ent should initiate the pro%ects !hich !ill coer the

position o these $inerals ater it?s anishin#" Policies

re#ardin# $ineral sector should be !ell detailed and $ore

ocused on the best !as to $a6e $ineral industr $ore

co$petitie !ith other producer countries" 9he a#ree$ents

to inest in these sectors and others $ust be open and the

societies around the inest$ent areas hae to be inoled in

polic $a6in# and ho! the inest$ent is #oin# to beneit thesurroundin# co$$unities"

Acknowled#ements

9he authors !ould li6e to e>press their #reat than6s and

appreciation to Mr" en Pen# ('uperisor) or his adice

about !ritin# this article and Mr" ei ei (ourse tutor) or

his support upon the acco$plish$ent o this article"

Fi6e!ise, !e are indebted to Mr" 'ali$u bushiri Kineu

as the irst reie!er and his co$$ents to!ards the

i$proe$ent o this oeure"

+e7erences

N1O rican Beelop$ent und, (200E), Pro%ect co$pletionreports (P) o 'tructural d%ust$ent Foan ('al); epublico 9anania; 6overnance7 economic and financial reformsdepartment, March 200E"pp 02-1&

N2O rican cono$ic Cutloo6, (2002), 9anania; CB B+,2002; pp 2Eport arnin#sBrop 3G on Tear W entral +an6" (Cnline) ailable:http:!!!"euroinestor"co$ne!s20130220tanania-2012-#old-e>port-earnin#s-drop-3pct-on-ear-central-ban61221&1le, ", (200th dition,Published b McRra! W @ill o$panies, nc and Posts *9eleco$ Press" p" 44-10&

N1&O nestors Ruide to 9anania: 9anania nest$ent entre;ailable athttp:!!!"tic"co"t$edia2013-9-nest$ent-Ruideboo6]2"pd

N1EO .='9M.9 CPPC9/.9' =F+F .9.7.: Cnline ailable athttp:!!!"$it"#o"tpd'G20CG20CCP9C.G20+9.G2097G20.BG20RM.-

N18O saac, '" * Cthieno, F" (2011) /#anda?s eealedo$paratie danta#e: 9he idence !ith the ast ricano$$unit () and hina; P, 9o!ards 'ustainableBeelop$ent; irst drat, ebruar 2011" pp" 01

N1

[P_834*T_200


14/14


N21O Kerin#, '" (2013) 9anania oncerned Rold 'lu$p MaPro$pt Mines to 'hut; +loo$ber# 'ustainabilit" (Cnline)ailable:http:!!!"bloo$ber#"co$ne!s2013-04-1&tanania-concerned-#old-slu$p-$a-pro$pt-$ines-to-shut"ht$l (pril 1E,2013)

N22O KurLi, F", * 9eodoroi, " (2011) Rlobal risis, ecoerand the han#in# orld: E/onoms/i :re(led, &2 (5-&)" pp"233-24E

N23O ru#$an, P", " * Cbsteld, M" (200&) nternationalcono$ics: 9heor and polic; Eth edition, published bPearson ducation sia Ftd" p 4-205

N24O Fan#e, '" (2008) Fand 9enure and Minin# in 9anania; Meport" (Cnline) ailablehttp:!!!"c$i"nopublicationsile3008-land-tenure-and-$inin#-in-tanania"pd

N25O Funo#elo, @"+", Mbilini, ", * @an#i, M (2010) Rlobalinancial risis Biscussion 'eries; Paper 20: 9anania Phase

2; verseas 1evelopment Institute, 111 est$inster +rid#eoad, Fondon, p 01-0E

N2&O Maehle, .", 9eerra, @" * hachatran, " (2013) >chan#eate Fiberaliation in 'elected 'ub-'aharan ricanountries: 'uccesses, ailures and Fessons; nternationalMonetar und, !or6in# paper 1332, pp" 3

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