Export of services and economic growth in Tanzania: the case of tourism

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University of Dar es Salaam
This study attempts to analyse the contribution of tourism, as one component of services exports to economic growth also to assess the determinants of the services exports in Tanzania. The study employed a two-equation model, the output growth equation and the exports earning question that were estimated using various econometric techniques. The findings indicate that services exports particularly tourism expansion has substantial impact on the economy as shown by increase in GDP growth. The study has found also that there is no feedback effect between tourism and output in Tanzania. Instead, there is a in directional relationship moving from services export to GDP. Using export earning equation it was found that world income openness’s of the economy and FDIs had a positive and significant heating on tourism expansion. On the other head nominal effective exchange rate showed a negative effect on the sector and that only a two-year lagged exchange rate was significant while the current period exchange rate was not. The implication from this finding is that the current exchange rate is not a deterministic factor to after visitor’s decision but their current incomes are. it was suggested that although world demand for Tanzania’s exports cannot be controlled, the adoption of appropriate policies that cause Tanzania’s services to exceed in competitiveness may increase the absorptive capacity of Tanzania’s services exports in the world method. A strategy like outward looking which is also a component of economic reforms appreciably amplifies the effect of tourism expansion.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF G155.T34R87)
Tourism, Economic conditiions, Tanzania, International trade
Rutajama, R. P (2008) Export of services and economic growth in Tanzania: the case of tourism, Master dissertation, University of Dar es Salaam