The Impact of Foreign Direct Investment on Economic Growth in Tanzania.

Kyemi, Flora Sima (2025) The Impact of Foreign Direct Investment on Economic Growth in Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

Tanzania has experienced a positive trend in foreign direct investment (FDI) inflows since transitioning to a free and liberalized economy in the late 1980s. The study examined the impact of foreign direct investment on Tanzania's economic growth. The study used a descriptive research design, using a census of annual reports from World Banks for 2015-2022 and 15 BOT samples for interviews, whereby multiple regression analysis was used for the quantitative data, and thematic analysis for the qualitative data. The study revealed that economic growth was significantly and positively influenced by FDI inflows, implying that increase in FDI inflows lead to increase in economic growth. It was also noted that the economic growth was significantly and negatively influenced by GFCF, meaning that decrease in GFCF leads to decrease in economic growth. The study also noted that economic growth was positively influenced by trade openness but, this effect is not statistically significant in this model, indicating that increase in trade openness leads to increase in economic growth. The study recommends that the government, Ministry of Industry and Trade, and Investment must collaborate in order to implement policies that maximise the benefits of FDI inflows by drawing capital into high-growth and productive industries; increase the effectiveness of capital formation to prevent misallocations and guarantee that investments provide long-term financial returns; and prioritise promoting trade openness by encouraging competitive industries and developing the infrastructure and human capital required to capitalise on international trade. Keywords: Investment, Foreign Direct Investment, Economic, Economic Growth, Local Government Authority.

Item Type: Thesis (Masters)
Subjects: 300 Social Sciences > 320 Political science
Divisions: Faculty of Arts and Social Sciences > Department of Political Science and Public Administration
Depositing User: Mr Habibu Kazimzuri
Date Deposited: 23 Dec 2025 08:09
Last Modified: 23 Dec 2025 08:09
URI: http://repository.out.ac.tz/id/eprint/4825

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