Uganda's revealed comparative advantage: the evidence with the EAC and China (original) (raw)
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Uganda’s Revealed Comparative Advantage in COMESA
Journal of Sustainable Development, 2016
Most recently, Uganda increased its trade engagements with COMESA as demonstrated by its submission of accession instruments to COMESA Secretariat in order to access the Free Trade Area (FTA). It is envisaged that trade with COMESA can compensate for the low export demand elsewhere by enabling diversification of the export basket and facilitating value addition to traditional exports. It is also expected to enhance producer competitiveness and consumer welfare. Full exploitation of this requires information on where and in what commodities Uganda’s trade niche lies. This study assesses the country competiveness within COMESA based on the concept of Revealed Comparative advantage (RCA). The paper also evaluates the stability of Uganda’s RCA in COMESA from 1997-2014 using HS6-digit level export and re-exports data obtained from the World Integrated Trade System. Findings reveal that Uganda’s RCA is in all 16 industries at the product chapter level. It is stable in exports of animals, ...
The African Review
This paper investigates intra-regional trade changes in the East African Community since its revival, as well as their revealed comparative advantage and evolution between 2001 and 2020. While most studies have examined the comparative advantage of individual EAC countries, they have not addressed how the revival of the Community impacted comparative advantage and intra-regional trade over time. As its analytical approach, the study calculates trade intensity indicators, revealed comparative advantage indices, and evaluates product categories that have lost, retained, or gained comparative advantage. The following conclusions are drawn from the study’s findings: first, the revival of the Community increased intra-regional trade at first, but it soon dwindled due to non-tariff barriers. Second, product groups exported in raw form retained their comparative advantage, with Uganda having the most such product groups. Third, comparative advantage evolved, with Kenya having the greatest ...
Comparative Advantage and Economic Performance of East African Community (EAC) Member States
Journal of Economics, 2013
The researchers have investigated comparative advantage in the East African Community member states. They have also investigated economic performance of the member states. Balassa's Revealed Comparative Advantage (RCA) index was used to establish member states' comparative advantage. An analysis of real GDP, employment levels and stability of exchange rates was used to measure their economic performance. The results show Kenya has comparative advantage in 471 product codes, Tanzania in 471 products, Uganda in 437 product codes, Rwanda in 275 products codes and Burundi in 152 product codes. There is therefore evidence that the member states have revealed comparative advantage although in limited products and that economic indicators show they have performed well. However, there is a need that GDP growth rates should exceed population growth rates in order to have sustainable economic growth.
Tanzania is the most promising current and the destination market for the world trade due to its copious resources and strategic location. It is well known in the region as the trade hub as it provides the influential and suitable trade solutions and investments. The aspiration of this paper is to analyse the Revealed Comparative Advantage (RCA) for the topmost export sectors and commodities in Tanzania from 2009 to 2012 by inspecting and evaluating its potency and competence in the world market compared to exports from other countries. Balassa's index of Comparative advantage (RCA) was utilized to demonstrate the competitive sectors and commodities comparative advantage together with export data from UN com-trade and International Trade Centre (ITC). The outcomes show that Tanzania has significantly strong comparative advantages in sectors of traditional cash crops such as coffee, tea and spices and commodities found in mineral resources as the leading export sector and commodities for the period of four years with RCA greater than one. However, many sectors demonstrated lower RCA compared to individual commodities and the export products have been waning every year, the situation that needs the government to initiate the immediate measures to overcome such problem.
Journal of Economic Integration, 2009
Regional trade arrangements are becoming an increasingly popular vehicle for the promotion of trade and growth. In East Africa the previously defunct East Africa Customs Union has been resurrected to improve trade between Kenya, Tanzania and Uganda. To facilitate the development of the East African Community, transitional arrangements have been put in place to liberalise inter and intra-regional trade. Using a partial equilibrium approach this paper quantifies and evaluates the trade and welfare effects of these arrangements for Uganda, particularly for products classified as sensitive products from the Ugandan perspective. Results vary with the level of product aggregation applied which questions whether transitional arrangements confer any real benefits on the stakeholders. The policy implications that follow suggest that selecting industries
TRADE and REVEALED COMPARATIVE ADVANTAGE MEASURES: A CASE of MAIN EXPORT CROPS od BENIN REPUBLIC
2017
International trade is one of the key factors of macroeconomic prosperity for any country. It is generally recognized that trade is essential for growth and that growth is critical for poverty reduction. In many nations in Africa where agriculture constitutes the largest portion of the economy and agricultural commodities figure prominently among the goods traded, international agricultural trade has been a notable motor of development. Agricultural trade is a generator of income and welfare for the millions of people who are directly or indirectly involved in it. Comparative advantage, one of the most celebrated concept/theory of economics, has globally dominated the field of international trade especially agricultural trade not only in academics but also in economic/development policy circles. Benin is one of the developing Sub-Saharan countries, of which the economic welfare depends essentially on agricultural trade. Agriculture contributes around 35 % in the country’s GDP and 80...
Potential Products for Uganda's Export Expansion and Diversification
Potential Products for Uganda's Export Expansion and Diversification, 2021
The study identifies the potential sectors and products for export intensification and diversification using the Hausmann Atlas of Economic Complexity and the International Trade Centre’s Export Potential Assessment approaches. Overall, the results suggest that Uganda has a comparative advantage for export intensification and diversification in the agricultural, minerals, light manufacturing and textile sectors. In addition, Uganda is exploiting only 62 percent of its potential export market, suggesting that there is a 38 percent unutilized export market that needs to be tapped into. To leverage the available opportunities, the government needs to undertake efforts to enhance the competitiveness of Uganda’s export products, primarily agricultural, mineral, light manufacturing and textile products, by improving the economic infrastructure (energy, transport and e-commerce) and addressing institutional inefficiencies (bureaucracy and corruption). In addition, the productive, marketing and exporting capacities of current and prospective exporters need to be built to tap into the regional markets. The government also needs to provide adequate and timely information regarding the available export diversification and intensification opportunities in Uganda’s key trading partners. Lastly, tapping into export markets also requires strengthening the existing institutional framework for export promotion to ensure that critical stakeholders are well coordinated and have a shared vision.
Normalized revealed comparative advantage (NRCA) index by Yu et al. (2009) has a great significance, due to its dynamic characteristics of over time, cross countries and cross products comparison in international trade. It also provides comparative picture of degree of advantage and disadvantage. This is first study that aims at estimating NRCA of SAARC countries at17-sectorial level products to reveal their comparative and dynamic positions in international trade. This study found that Bangladesh has advantages in two sectorial products, Bhutan in two, India in two, Maldives in three, Nepal in four, Pakistan in four and Sri Lanka has advantages in three sectorial products. In textile and clothing products, Bangladesh is in better position due to rising trend in advantage over time, Nepal's advantage has been volatile, Pakistan's advantage is falling, India has volatile in textile and in clothing it is falling. Sri Lankan's advantage in clothing is falling while Maldives and Bhutan has no advantage in textile and clothing products. Bhutan is improving in iron and steel products but in fuel and mining products its advantage is falling, Maldives with three sectorial products enjoying advantages but it is falling over time i.e. Agricultural, Food and Fuels products. JEL Codes: F11, F13
Ugandan trade policy and export performance in the 1990s
1998
The Ugandan economy has been transformed since 1987. We ask how effective have the reforms been in increasing the incentives to exporters. Uganda has made significant progress in reducing the anti-export bias in its trade policy. Taxes on exports have been abolished, the foreign exchange market is liberalised and exporters are allowed to retain their export earnings. Import protection has also been reduced considerably. However, while the relative incentives to exporting have improved, export earnings have not. The real problem facing Uganda is the severe lack of export diversification and the fact that it is a price taker on world markets. Uganda can take measures to encourage export diversification, both in terms of quality and niche markets for traditional commodities and in terms of encouraging non-traditional exports. Trade policy reforms are only part of such a strategy. Improved infrastructure and institutional support are an important component of export support, to reduce the adverse effects of natural barriers.