Trade in Mining In Tanzania and its Implication for Economic Growth from 1985-2009

This study examines the implication of trade in the mining sector on Tanzania economic growth. Specifically this study examines the trend of mineral exports, explores the impact of the mining sector to economic growth and determines the impact of infliction on economic growth and poverty reduction in Tanzania. The model to be used in this study is a modified one from Keong et al (2002) and the analysis is carried out using Ordinary Least Square method, on time series data covering the period 1985-2009. A five- variable model is estimated in the statistical procedures of co-intergration and Error Correction Model (ECM).The study finds that mineral exports have been significantly and positively influencing economic growth in Tanzania, thus rejecting the hypothesis that mineral exports do not contribute positively to economic growth. Also inflation rare as found to the influencing economic growth negatively, thus supporting the hypothesis tested that Tanzania economic growth is affected negatively by inflation. The trend of mineral exports shows that the value of mineral exports has increased. To ensure economic growth and poverty reduction for the Tanzania economy, extra efforts need to be devoted such as value addition activities to create employment strengthening transparency in mining contracts, financial assistance to small-scale miners and having prudent macro-economic policies like inflation control