Impacts of Macroeconomic Factors on Employment Growth in Tanzania.

Mhenwa, Rehema Ramadhan (2025) Impacts of Macroeconomic Factors on Employment Growth in Tanzania. Doctoral thesis, The Open University of Tanzania.

PDF - Submitted Version Available under License Creative Commons Attribution. Download (2MB)

Abstract

Macroeconomic factors, particularly fiscal and monetary policies, significantly influence economic growth and employment. This study examines the effects of macroeconomic factors on employment growth in Tanzania. It examines how internal and external fiscal and monetary macroeconomic factors influence employment growth. Time series data spanning from 1990 to 2022, collected from the Bank of Tanzania and the World Bank, were utilised. Prior to estimation, stationarity tests were conducted, followed by co-integration bound tests and an Autoregressive Distributed Lag (ARDL) model for both long-run and short-run error correction. The findings indicate that total government revenue, lending interest rates, openness to trade, public external debt, foreign reserves, exchange rates internal fiscal and monetary interaction factors were inverse related with employment growth. Conversely, GDP growth, total government expenditure, inflation rate, external fiscal and monetary interaction had a positive impact on employment growth in the long run. The study concludes that both external fiscal and monetary factors were crucial in influencing employment growth in Tanzania. Therefore, it is recommended government to continue broaden the revenue base by establishing the newly friendly revenue collection approaches, lowering the lending interest rate to stimulate local investors and ensure affordable borrowing for productive investments, external debt must be done on the purpose and ensure full maximization of it to yield maximum return. The government has to continue to safeguard the goods and services of high quality to compete in both local and foreign market and evade excessive imports. Keywords: Fiscal Factors, Monetary Factors, Employment Growth, Tanzania.

Actions (login required)

View Item