The Effects of Trade Governance on Sugar Trade and Its Landscape of Policy Practices in Tanzania

Abstract

Trade governance is important for the efficient implementation of trade policies that support and controls most of the global value chains (GVCs) trade in African countries. Poor trade governance leads to misalignment of trade policies and affects the sustainability of the agricultural commodities supply chains. This study used cross-sectional survey data of 375 randomly selected sugar supply chain actors in Tanzania to evaluate the level of trade governance in Tanzania and ascertain its effects on the sugar trade. Exploratory (factor analysis) and confirmatory (weighted least square regression) models were used for data analysis. The major findings are that governance affects the sugar trade with the magnitude of its effects being felt differently between farmers and traders. It shows further that abrupt trade policy change significantly ( p < .05) reduces sugar trade by almost half (47.7%) and lowers the overall level of efforts to invest within the sugar supply chain. Ensuring trade policies are stable and predictable will increase trade by allowing forward contracting and investments. It is also important to create awareness of institutions and organizations managing the sugar supply chain by encouraging transparency in trade policy administration and practices for improving trade governance.