The effects of traditional and non-traditional agricultural exports on income per capita in Uganda (1988-2021)

Abstract

This study set out to investigate the empirical relationship between traditional and non-traditional agricultural exports on income per capita in Uganda using time series data obtained from World Bank (World Development Indicators) and Uganda Bureau of Statistics for the period between 1988 and 2021. The objectives of the study were; to investigate how traditional and non-traditional agricultural exports affect income per capita in Uganda and how fish and coffee exports affect income per capita in Uganda. The study adopted both the Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests to ascertain the order of integration of the variables. The unit root test results revealed a mixture of order zero I(0) and order one I(1) variables. The ARDL results indicated; in the short run, a 1% increase in non-traditional agricultural exports leads to a 0.0263% increase in gross domestic product per capita at the 1% level of significance. A 1% increase in traditional agricultural exports leads a 0.0344% increase in gross domestic product per capita at the1% level of significance. Coffee exports are statistically significant at the 10% level of significance whereby, a 1% increase in coffee exports leads to a 0.015% increase in gross domestic product per capita. Fish exports are statistically significant at the 10% level of significance. A 1% increase in fish exports leads to a 0.0136% increase in gross domestic product per capita. In the long run, traditional agricultural exports are statistically significant at the 1% level of significance whereby, a 1% increase in traditional agricultural exports leads to a 0.358% increase in gross domestic product per capita. Non-traditional agricultural exports are statistically insignificant. A 1% increase in coffee exports leads to a 0.1614% increase in gross domestic product per capita at the 10% level of significance. A 1% increase in coffee exports leads to a 0.037% increase in gross domestic product per capita at the 1% level of significance. Fish exports is statistically significant at the 5% level of significance whereby, a 1% increase in fish exports leads to a 0.0230% increase in gross domestic product per capita. The study recommends policies that are geared towards increasing income per capita. Specifically, increasing the supply of fish for international, adding value to non-traditional agricultural exports, design a population growth strategy combined with institutional and policy changes to ensure population growth, encourage education through provision of free or subsidized education and introducing modern production technologies of coffee to upgrade the traditional methods.