Determinants of Tanzania gross domestic savings for the period: 1980-2017
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Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es salaam
Abstract
Determinants of Tanzania gross domestic savings for the period: 1980-2017
Fadhili Stephen Sooi
Master of applied economics
University of Dar es salaam, College of Social Sciences, 2020
Despite the financial sector reforms that Tanzania had gone through, the country’s Gross Domestic Savings is still low. In the context of the country’s recent push for industrialization, it is clear Domestics saving will play a role particularly in financing the large required projects. This study used time series data covering the 1980-2017 periods and an Auto Regressive Distributed Lags (ARDL) model to address the following objectives. One, explaining the trend of Tanzania Gross Domestics Saving (GDS) and two, identifying the determinants of GDS in Tanzania. This study came up with the following findings; both current account balance and national debt had a positive effect on GDS in the short run and negative effect in the long run. Income per capital had a positive effect on GDS both in the short run and in the long run. The study further found evidence of a negative relationship between GDS and dependency ratio in the short run although in the long run the relationship was positive. This may reflect the country’s relatively larger young age dependents (who are the future potential labour force) responsible for increased domestic saving in the future. In addition, interest rate on saving (deposit) had a positive effect on GDS in the long run although in the short run the effect was insignificant. This may be caused by the country’s low interest rate on saving. The Error Correction Coefficient was estimated at 189.1 percent which means deviation from long run equilibrium of GDS (caused by change in the determinant of GDS) in one year is corrected by 189.1 percent in the following year. The government needs to continue promoting measures which reduce fertility rate while strengthening social services provision to support the current dependent population with a view that (because of it being dominated by young age dependents) it will form a future potential working population and increase the country’s saving. Furthermore, there is a need to promote Tanzania export and reduce negative current account balance.
Description
Available in print form, East Africana collection, Dr. Wilbert Chagula Library, class mark (THS EAF HC 79.S3.T34S665)
Keywords
Saving and inverstment,, Domestiic gross product,, Public inverstmeents
Citation
Sooi, F. S (2020)Determinants of Tanzania gross domestic savings for the period: 1980-2017,Masters Dissertation,University of Dar es Salaam, Dar es Salaam.