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

Abstract

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.