Browsing by Author "Yabu, Nicas"

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    Central bank responses to IMF supported progamme conditionality and macroeconomic volatility in Tanzania
    (University of Dar es Salaam, 2013) Yabu, Nicas
    This study investigated how, in the course of achieving the IMF-supported programme quantitative conditionality, monetary aggregates, in particular, might cause volatility in macroeconomic variables in Tanzania. Specifically, the study investigated the existence of macroeconomic volatility before and during the IMF-supported programme quarterly targets, and ascertained the extent to which achieving the IMF-supported programme quarterly targets amplified macroeconomic volatility. Using the GARCH model, findings from this study revealed that volatility existed before and during the IMF-supported programme quarterly targets. Also, results from an Error Correction Model indicated that although the IMF aims at helping member countries to stabilize their economies, paradoxically, findings revealed that in the course of fulfilling the IMF-supported programme conditionality, the process amplified macroeconomic volatility in Tanzania. In addition, findings from this study gave evidence that the way the Bank of Tanzania was going about to meet the conditionality by achieving the IMF-supported programme quarterly targets was one of the augmenters of macroeconomic volatility. Also, the behavior of fiscal aggregates, such as government expenditure and deficit were noted to contribute to macroeconomic volatility in Tanzania. The study suggests that the IMF needs to design appropriate performance criteria, which are manageable by a recipient country within a specified period. Also, recipient countries need to implement their economic policies on a steady basis in order to be able to fulfill the agreed IMF-supported programme conditionality feasibly.
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    Government expenditure and economic growth in Tanzania, 1965-2001.
    (University of Dar es Salaam, 2003) Yabu, Nicas
    This study has attempted to assess how government expenditure (fiscal policy) influences economic growth in Tanzania using annual data for the period 1965-2001. A modified version of the Solow (1957) model is estimated using the Single Equation Error Correction method to explore empirically the short-run and long-run impacts of government expenditure on economic growth. The regression results show that government expenditure on secondary education and on total education tend to contribute more to economic growth than other variables considered in this study do. The results also show that expenditure on public investment tends to complement private investment in furthering economic growth, but expenditure on public debt servicing tends to retard it. The parameter estimate on a proxy variable for economic reforms indicates that the undertaken economic reforms did not cause a statistically significant impact on real economic growth. The study recommends that, in setting targets for government expenditures, the government must adopt policies that encourage expenditures on education sector particularly in secondary education. The government should also allocate more of its resources to public investment in order to induce a positive response to economic growth. Despite the limitations and shortcomings encountered, in general the findings indicate that in Tanzania, government expenditure promotes economic growth, with the implication that policies adopted may draw from the empirical evidence presented to enhance this role. This will thus be a useful guideline to policy makers when deciding or expenditure allocation and rationalization.