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TitleComparing the Performance of Uganda’s Intra-East African Community Trade and Other Trading Blocs: A Gravity Model Analysis
AuthorSHINYEKWA, Isaac ; OTHIENO, Lawrence
SubjectTrade
Date of Publication2013
PublisherEconomic Policy Research Centre (EPRC)
Number of Pages52 pages
LanguageEnglish
Geographical CoverageAfrica
KeywordsGravity model, Imports, Exports, Intra regional Trade, Trade intensity index, Trade Indices, Trade flows, Fixed effects., Trade shares, Regional Integration
AbstractThis paper examines factors that determine Uganda’s trade flows and specifically compares the impact and performance of the different trade blocs on Uganda’s trade patterns and flows. The empirical question is whether Uganda’s trade is getting more integrated in the East African Community (EAC) region or is still dominated by other trading blocs, namely European Union (EU), Asia and Common Market for Eastern and Southern Africa (COMESA)? Two analytical approaches are used, namely: trade indicators and estimation of the gravity models using data extracted from COMTRADE for the period 2001 – 2009 (panel). We estimate determinants of export and import trade flows separately using static random, dynamic random and IV GMM models. The results suggest a strong relationship between belonging to a trading bloc and trade flows. Likewise, Uganda’s import and export trade flows have conspicuously adjusted to the gravitational forces of the EAC during the progress of the integration. Whereas exports are being integrated more in the EAC and COMESA regions, imports are more integrated in the Asian and EU trading blocs. Therefore, strong links with trading blocs outside the EAC (i.e. EU and Asia) with regards to imports still exist. The trade indicators demonstrate that Uganda exports largely primary products and imports manufactured products. It is imperative for Uganda to target implementation of regional trade agreements to expand the country’s export markets. The EAC region should attract investment in production of high technology products to increase intra-EAC imports and reduce imports from Asia and the EU.
Copyright HolderEconomic Policy Research Centre (EPRC)
Copyright URLhttp://www.eprc.or.ug
Filesize1583392 MB
File FormatPDF
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