The impact of remittances on economic growth in Tanzania

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University of Dar es Salaam
The main objective of this study is to examine the impact of remittances on economic growth in Tanzania. Remittances inflow acts as one of the major sources of capital flows in the world. Despite the smaller share of this capital flow received by developing countries, specifically Tanzania, remittance is considered to be beneficial in promoting household welfare and through its multiplier effect; it stimulates the economy as a whole. Applying the time series analysis from 1970-2014, ARDL model is adopted in this study because it gives more powerful results when sample period is short. The study also used Granger-causality test to assess the causality relationship between remittance and economic growth in Tanzania. The empirical results indicate that remittances have significant and positive growth effect both in long run and short run. Furthermore, the Granger causality test has confirmed that the direction of causality is from remittances to economic growth and not vice versa. The policy implication from this study is that, the government, banks and remittances service providers should work collaboratively to ease the process of sending remittances to extract the benefits these flows have on the economy of Tanzania.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HC885.J67)
Economic policy, Tanzania
Joseph, P. K. (2016) The impact of remittances on economic growth in Tanzania, Master dissertation, University of Dar es Salaam, Dar es Salaam.