Impacts of Foreign Direct Investments, Inflation Rates and Total Exports on Economic Growth in Tanzania: Evidence from 1990 to 2021.

Mang’era, Peter Marwa (2023) Impacts of Foreign Direct Investments, Inflation Rates and Total Exports on Economic Growth in Tanzania: Evidence from 1990 to 2021. Masters thesis, The Open University of Tanzania.

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Abstract

Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries. Both cross-country research and country case studies provide overwhelming evidence that rapid and sustained growth is critical to making faster progress towards the Millennium Development Goals. This study intended to examine the impacts of foreign direct investments, inflation rate and exports of goods and services on economic growth in Tanzania from 1990 to 2021. The study has applied non-probability quantitative data analysis techniques to analyze the Annual Time series secondary data. I have applied both STATA and SPSS software to undertake the Multiple regression analysis so as to analyze the variables involved in the study. I employed the Autoregressive Distribution Lags (ARDL) to analyse the collected data and for reporting the research findings. The finding of the study indicates that that FDI has a mixed impact on the GDP of Tanzania, having a positive but insignificant relationship in the current period and a significant negative relationship in the first lag. Moreover, the study highlights that inflation has a significant negative impact on Tanzania's GDP over the studied period, but this effect is influenced by lag values. Specifically, an increase in current inflation is associated with a decline in future GDP, indicating that inflation can have adverse consequences on the country's economic growth in the long run. On the positive side, the research reveals that exportation has a notable positive impact on Tanzania's GDP. This finding suggests that an increase in exports contributes to economic growth in the country, implying that export-led strategies could be beneficial for enhancing the GDP in Tanzania. Key Words: Economic Growth, FDI, Inflation rate, Total exports, Tanzania

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