The Impact of Macroeconomic Variables on Public Debt in Tanzania from 1990 to 2021.

Nyaonge, Pastory Sweetbert (2023) The Impact of Macroeconomic Variables on Public Debt in Tanzania from 1990 to 2021. Masters thesis, The Open University of Tanzania.

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Abstract

This study assessed the impact of macroeconomic variables on public debt in Tanzania from 1990 to 2021. Tanzania uses debt received from internal and external sources in financing its deficit budget and implementing development projects to facilitate economic development. Tanzania public debt stock depicted an upward trend for the last decade, reaching USD 33,773.1 million at end of June 2021.The study employed VECM to capture the long and short run relationship of macroeconomic variables. Furthermore, the findings show that the coefficient of all independent variables had negative impact on public debt and statistically significant at 5percent while FDI had a positive impact on public debt in short run. The study also recommended to the government the followings; to provide training to civil servants about loan utilization, emphasizing the government to direct loan to the development projects, emphasized the government to reduce duplicative programs and to take the soft loan in order to facilitate economic developments. The findings also had a number of policy implications including the need to implement responsible debt management procedures while making sure that resources are allocated to the economy's productive projects in order to facilitate economic development. Key words: Public Debt,Inflation Rate, Government Expenditure, Foreign Government Investment.

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