The impact of coffee exports on uganda's economic growth from 1986 to 2022

Abstract

This dissertation investigates the impact of coffee exports on Uganda's economic growth from 1986 to 2022. Grounded in the export-led growth theory, the study utilises time series data from reputable sources like the World Bank, UCDA, UBOS, and IMF, employing an Autoregressive Distributed Lag (ARDL) model to analyse the long-run relationship between coffee exports and GDP growth. The empirical analysis reveals a statistically significant positive impact of coffee exports on Uganda's economic growth. The study finds that a 1% increase in coffee export values leads to a 0.75% increase in GDP in the long run. The research also highlights the significant positive influence of foreign direct investment on economic growth, while revealing a complex interplay with inflation and exchange rates. Diagnostic tests confirm the validity and reliability of the ARDL model, strengthening the robustness of the findings. The study underscores the crucial role of coffee exports as a driver of economic growth in Uganda, supporting the export-led growth theory. Based on the empirical findings, this dissertation recommends policy interventions focused on enhancing coffee productivity, attracting foreign direct investment, managing inflation, and mitigating climate change risks. These strategies can foster amoresustainable and thriving coffee sector, contributing significantly to the long-term economic development of Uganda. This research provides valuable empirical evidence and policy insights for policymakers, industry stakeholders, and development practitioners seeking to promote a robust and resilient coffee industry in Uganda. The findings have significant implications for shaping a more prosperous future for both coffee farmers and the broader Ugandan economy.