Examining the Factors Affecting Export Performance for Small and Medium Enterprises (SMEs) in Tanzania

Abstract

This article presents the findings of the study on the export trade barriers among Tanzanian SMES. The SMEs’ sector has tremendously expanded in Tanzania over the three last decades. Despite this expansion, it is absurd that most of the SMEs remain focusing on the narrow domestic markets. This paradox needs to be explored in details. The paper uses data, which was collected by the author during a Masters’ research study which was conducted in Dar es salaam, Tanzania in 2015. Three hypotheses were developed and a structured questionnaire that involved 130 SMEs’ owners was used to correct data. Findings show that among other barriers, export competencies, especially inadequate and instable financial capital (.008), language (.000), production technology (.069), ICT and information search competencies (.000), standard of products produced by the SME (.000), restrictive entrance procedures into the country (.005), export market characteristics such as complicated business laws/regulations (.001), customers’ indifference with foreign goods(.000), price uncertainty in the export markets(.000), product competition in the export market(.000), and complicated travel accreditation (passport/Visa)(.000) were the most significant barriers. Equally, national business environments, especially uneasy accreditation for export of goods (.000), complicated business laws and procedures (.002), unconducive trade financing for SMEs (.000), and higher taxes charged on production and export (.053) were also responsible for limited export. Generally, SMEs owners’ fear of export market was the most significant barrier (.001), followed by the national business environments (.011), and finally SMEs’ export competencies (.016). The article concludes that focusing on individual components in each of the three categories reveals no consistence within the classification where in all categories both very significant and relatively less significant barriers were. Thus, the study recommend specific and context sensitive analysis of export barriers.

Keywords: Export Barriers, SMEs Internationalization, Tanzania