The Contributions of Exports to Economic Growth. A Confirmation of Export-Led Growth Hypothesis in Uganda.

This study examines the contributions of exports to economic growth in Uganda. An Autoregressive Distributed Lag (ARDL) modelling framework was employed. Using annual data spanning 35 years, the study first tests for stationarity and integration of variables through Augmented Dickey-Fuller (ADF) tests, revealing that GDP, exports, FDI, and exchange rate are I(1), while inflation is I(0). The ARDL Bounds Test confirms the presence of a significant long-run cointegrating relationship among these variables, justifying the estimation of both long-run coefficients and an Error Correction Model (ECM) for short-run dynamics. Long-run results indicate that FDI positively influences GDP, while exports and currency depreciation exhibit negative coefficients, although these effects are statistically insignificant, suggesting potential model limitations or omitted factors. In contrast, short-run results highlight the immediate positive impacts of lagged exports, FDI, exchange rate depreciation, and inflation on economic growth, with the ECM term confirming adjustment toward long-run equilibrium. Robust diagnostic tests, including Jarque-Bera, Breusch-Godfrey, and Breusch-Pagan-Godfrey, validate the model’s assumptions of normality, absence of serial correlation, and homoskedasticity. The findings suggest that Uganda’s economic growth is influenced more by short-run momentum and lagged macroeconomic factors than by long-run structural effects of agricultural exports, underscoring the need for policies that enhance the efficiency of export sectors, attract FDI, and stabilize macroeconomic conditions.

Agricultural exports, Economic growth, ARDL, Foreign direct investment, Exchange rate

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