Abstract:
The study examined the effect of exchange rate, inflation rate, interest rate and economic growth
on agriculture export earnings in Tanzania. Non experimental research design was deployed and
the secondary data were collected and analysed from 1990 to 2019. Multiple linear regression
analysis was employed to measure the effect of independent variable on dependent variable.
Multicollinearity, heteroscedasticity and autocorrelation were performed to validate the model. The
study findings showed insignificant relationship between exchange rate and agriculture export
earnings. The inflation rate has a positive and significant influence on agriculture export earnings.
Moreover, the economic growth positively influences agriculture export earnings and the interest
rate is significant and positively influences agriculture export earnings which mean effective
monetary targeting and accommodating monetary policies should be designed and implemented
as the needs arise. The study recommends that, the government should use its fiscal and
monetary policy to maintain the level of interest and inflation in a country since they have great
influence to agricultural export earnings. The government needs to boost further economic growth,
using fiscal and monetary policy tools to maintain the level of inflation and interest rate so as to
archive a significant increase in agricultural export earnings. There is also need to boost supply in
the agriculture sector through incentives and subsidies that will lead to lower cost of production.
