Faculty of Social Sciences

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Author: search.filters.author.Kitole, Felician AndrewSubject: search.filters.subject.Tanzania

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    Foreign direct investment and industrialization in Tanzania admixture time series forecast analysis 1960 - 2020
    (Applied Economics Letters, 2023) Utouh, Harold M.L.; Kitole, Felician Andrew
    This paper examines and forecasts the impact of foreign direct investment (FDI) on industrialization and industrial performance in Tanzania by using World Bank data spanning 1960 to 2020. The admixture time series analysis of Vector Autoregressive (VAR) and Vector Error Correction Model (VECM) has been extensively explored to provide accurate estimation. The need to examine FDI inflows is enormously based on domestic macroeconomic parameters that are stuck in many developing countries, including Tanzania, implying that FDI is necessary for growth and development now and in the future. According to the findings, FDI granger causes industrialization, and the more the sector thrives, the more granger causes FDI inflow. In the long run, FDI has a significant impact on Tanzanian industrialization growth, whereas the exchange rate (EXR) has a significant impact on industrialization growth in the short run. The study recommends the Bank of Tanzania to take appropriate measures to control poor-performing economic parameters such as the exchange rate, inflation, and the improvement of the money market in order to enhance capital availability and accessibility.
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    Forecasting effects of foreign direct investment on industrialization towards realization of the Tanzania development vision 2025
    (Cogent Economics & Finance, 2024) Utouh , Harold M. L.; Kitole, Felician Andrew
    Purpose: This paper aims to deepen understanding and knowledge regarding the impact of foreign direct investment (FDI) on the industrialization process. Many developing countries aspire to shift from agriculture-centric economies to achieve sustainable development through industrialization. Realizing this goal, however, has been challenging, prompting an examination of the sixty-year trends and effects of FDI on Tanzania’s industrialization trajectory. Methodology: This study employs a comprehensive approach utilizing time series models, specifically the Vector Autoregressive (VAR) model and the Error Correction Model (ECM), to analyze the dynamic influence of FDI on industrialization. By forecasting the five-year trajectory of industrial growth and FDI inflows using data from the Bank of Tanzania and the National Bureau of Statistics spanning 1960 to 2020, this methodological framework aims to provide a nuanced understanding of the FDIindustrialization relationship, contributing valuable insights to the economic development discourse. Findings: The study’s results highlight the significant role of FDI in shaping both short- and long-term industrial progress, which is critical to advancing Tanzania’s industrialization goals. Conversely, factors like exchange rates predominantly impact the short-term industrial landscape. Forecasts from the analysis indicate a projected decline in both FDI and industrialization from 2020 to 2022, followed by a notable upturn from 2022 to 2025. This underscores FDI as a key driver for integrating agriculture-based economies into global value chains, facilitating economic upgrading through capital accumulation—a fundamental catalyst for sustained industrialization.