The impacts of the 2008 global economic crisis on Tanzania’s economic growth: the case study of exports and FDIs.
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Date
2010
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Publisher
University of Dar es Salaam
Abstract
This study seeks to examine and analyze the impact of the 2008 global economic crisis on the economic growth of Tanzania through its transmission channels of exports and foreign direct investments. Specifically, the study analyzes the causal long-run relationship between exports and FDI in boosting the economic growth of the country. Descriptive analyses on the impact of the global economic recession were used to determine the extent of the impact in the country and the Econometric software STATA version 10 was used for econometric analysis for the determinants of causal long run relationship between exports and FDI on the country’s economic growth using the Ordinary Least Square technique on time series data covering the period 1981-2009. The study found out that export earnings and FDIs exert a significant and positive impact on Tanzanian’s economic growth. The current global financial crisis is, therefore, likely to have a significant effect on Tanzania’s economic growth through transmission channels of FDI and exports, though currently exports earnings seem to be less affected by the 2008 global economic recession compared to FDI inflows. Therefore, the 2008 global economic recession should be taken into account for strengthening financial institutions, improving infrastructure and enhancing productivity. Appropriate policies’ response should also be taken in both short and medium terms i.e. to protect the domestic demand, employment and to ensure that the economy’s underlying growth dynamic does not get compromised.
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Keywords
Global economic crisis, Economic growth, Tanzania
Citation
Mutungi, N. S (2010) The impacts of the 2008 global economic crisis on Tanzania’s economic growth: the case study of exports and FDIs. Master dissertation, University of Dar es Salaam. Available at http://41.86.178.3/internetserver3.1.2/detail.aspx