Research Articles[FSS-Eco]

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An analysis of the household development strategies and their linkage to river basin resources in Tanzania
(Mzumbe University, 2018) Shitima, Christina
More than a decade ago, the Tanzanian government reformed its policy on the governance of water resources from a predominantly centralized system to a more participatory approach. The implementation of the policy required a simultaneous consideration of both the ecological and social cultural context of the basin and involvement of different stakeholders during the planning and management of water resources. The policy implementation was expected to conserve basins resources without negatively affecting livelihoods of people who depend on river basin resources (RBR). Despite the water policy reform, RBR in Tanzania are still degrading. While the factors for the RBR degradation are well articulated in literature, there is still a knowledge gap in terms of individuals’ characteristics that govern their use of RBR in Tanzania. From this vantage point, our study sets out to investigate in more depth the factors that influence the uses of RBR in different socio-economic and cultural contexts to inform policies on the improvement of rural livelihoods while at the same time protecting the river basin natural resource bases. More specifically, we analyze household characteristics that govern decisions regarding RBR use and assess linkages between people’s access to RBR , choices of development strategies and degradation of RBR. The study uses data collected from households residing along Kilombero Basin and Simiyu Basin.Intra-household data were collected from different household members aged 18 and above who carry out different socio-economic activities. A mixed methods research design, the qualitative— quantitative—qualitative approaches, were used in a sequential manner to answer the research questions. Findings show that informal social relation factors influence both practical rights to use RBR and benefits from the use of resources, which further result in diversities in occupational choices. While almost everyone practices seasonal farming to provide food for household consumption, informal social relation factors and access to social and financial capitals, affect participation in activities that are used for income generation. Lastly, yet importantly, gender, participation in multiple activities and environmental awareness are important factors for people to practice pro-environmental behavior The study provides important contributions to the literature on access to resources as well as to the policy settings by showing the importance of distinguishing between practical rights to use resources and benefits derived from their use. Furthermore, the study confirmed intersectionality and intra-household theories by demonstrating that both men and women are heterogeneous groups in societies. The findings that show that access to social and financial capitals are important factors for people to diversify away from non-environmental to environmental friendly activities provide important information to policy makers and other practitioners dealing with conservation. The study also sheds light on the importance of providing people with environmental education and incentives to encourage pro-environmental behavior.
An in-depth analysis of Tanzania's export growth trajectory from 1992 to 2021
(African Journal of Empirical Research, 2024) Utouh, Harold Martin Lemnge; Ng’wina, Shibabay John
This paper analyses Tanzania's export performance from 1992-2021. Exports remain an important aspect of earning foreign currency. To ensure the country's robust economic growth, it is also imperative to increase export value. To analyse Tanzania's export performance, time series data from the World Bank was used. The comparative advantage theory guided this study in analysing export performance. Also, the ARIMA model was used to figure out the relationship between export, FDI, and nominal exchange rate, and the study revealed that export, Foreign Direct Investment (FDI) inflows, and exchange rates have a relationship with export performance. The ARIMA model was used because of its effectiveness in forecasting and capturing patterns, trends, and seasonality. This study is important because it examines the importance of FDI and exchange rates on export performance. Furthermore, this study provides policymakers with actionable recommendations based on empirical evidence, helping them make informed decisions regarding export promotion initiatives, particularly in creating a conducive environment for FDI and the importance of managing nominal exchange rates. To stimulate the country's exports, governments s
Climate change, food security, and diarrhoea prevalence nexus in Tanzania
(Humanities and Social Sciences Communications., 2024) Kitole, Felician A.; Mbukwa, Justine N.; Tibamanya, Felister Y.; Sesabo , Jennifer K.
The impact of climate change on food security and public health has hindered poverty reduction efforts in developing nations, including Tanzania, resulting in the impoverishment of millions and compromising both health and food production. To unravel these complex interactions, rigorous scientific research is indispensable. Leveraging three waves of the Agriculture Sample Census (2002/03, 2007/08, 2019/20), this study meticulously examines the interplay between climate change, food security, and diarrhoea prevalence in Tanzania. Employing Instrumental Variable Probit and Control Function Approach models to address endogeneity and heterogeneity, temperature anomalies serve as instrumental variables. The findings reveal a substantial impact of climate change on both food security (−0.331142, p < 0.01) and diarrhoea incidence (0.214602, p < 0.01). These results signify that climate change places significant stress on food security, rendering households more susceptible to insecurities, and heightens health concerns through increased diarrhoea prevalence. This underscores the urgency of prioritizing public health and well-being through an agricultural lens in climate change mitigation. A comprehensive strategy is imperative, entailing a synergy of sustainable agricultural practices, robust public health interventions, and targeted policies to fortify the adaptive capacity of communities. Special emphasis should be placed on cultivating climate-resilient agricultural systems, ensuring food security, and implementing health programs tailored to address the unique challenges posed by climate-induced factors. Moreover, community engagement and awareness initiatives play a pivotal role in fostering a collective understanding and commitment to sustainable practices, contributing to the overall resilience of societies amidst the challenges of climate change
Connectedness to water as a predictor of household participation in water resources conservation in Singida municipality, Tanzania
(African Journal of Empirical Research, 2024) Utouh, Harold Martin; Muwelu, Lunango Gabriel; Shitima, Christina Mwivei
A low level of household participation in conserving water resources threatens the future of human survival because water is a unique substance with no substitutes. In addition, despite diverse discussions regarding water accessibility and the need for conservation, the literature is even scarce on the linkage between these two important constructs. Therefore, this paper examines connectedness to water and its influence on household participation in water resources conservation in Singida Municipality, Tanzania. Using a quantitative study approach with a cross-sectional survey, primary data were collected from 391 households in Singida Municipality to investigate water accessibility, considering the aspects of physical access, economic access, and cultural acceptability, as well as the number of water conservation practices households engages in. The Structural Equation Model (SEM) analysis reveals a positive relationship between water accessibility and participation in water conservation practices (WCPs) at 1% (Z=7.34, p<0.01). The study recommends that policymakers, agencies, and water sector stakeholders need to enhance their efforts to provide clean and safe water services to all community members to uphold the right to water for everyone and increase the level of participation in water resource conservation.
Connectedness to water as a predictor of household participation in water resources conservation in Singida municipality, Tanzania
(African Journal of Empirical Research, 2024) Mulewi, Lunango G ; Shitima, Mwivei; Utouh Harold M
A low-level household participation in conserving water resources threatens the future of human survival because water is a unique substance with no substitutes. In addition, despite diverse discussions regarding water accessibility the need for conservation, the literature is even scarce on the linkage between these two important constructs. Therefore, this paper examines connectedness to water and its influence on household participation in resources conservation in Singida Municipality, Tanzania. Using a quantitative study approach with a cross-sectional survey, primary data were collected from 391 households in Singida Municipality to investigate water accessibility, considering the aspects of physical access, economic access, and cultural acceptability, as well as the of water conservation practices households engages in. The Structural Equation Model (SEM) analysis reveals a positive relationship between water accessibility and participation in water conservation practices (WCPs)1% (Z=7.34, p<0.01). The study recommends, water sector stakeholders need to enhance their efforts to provide clean and safe water services to all community members to uphold the right to water for everyone and increase the level of participation in water resource conservation..
Cooking energy choices in urban areas and its implications on poverty reduction
(International Journal of Sustainable Energy Volume 42, 2023 - Issue 1, 2024) Kitole Felician A.; Tibamanya, Felister Y.; Sesabo, Jennifer K.
Developing nations face higher stakes in the race towards a cleaner energy future, where it's a matter of life, wealth, and basic human needs. Using Tanzania Panel Survey data, this study examined urban households' cooking energy choices and their impact on reducing poverty. Employing advanced statistical models, it found that traditional energy sources still dominate cooking methods, and households relying on them are more likely to be trapped in poverty. Clean energy sources, on the other hand, reduce poverty prevalence. Education and income diversification programs can facilitate an immediate shift towards clean energy and achieve Sustainable Development Goals. This study highlights the urgency of the situation and the need for decisive action towards a cleaner, equitable world for all.
Deciphering the drivers of food security in Tanzania: Non-experimental research design
(SCIENCE MUNDI, 2024) Sesabo, Jennifer K.
Food security is a pressing global concern, particularly in developing countries such as Tanzania, where rural areas, predominantly inhabited by smallholder farmers, bear the brunt of its adverse effects. This study looks into the determinants of food security among smallholder farmers in Tanzania, utilizing data from the agriculture sample census survey of 2019/20 conducted by the National Bureau of Statistics (NBS). Employing a Non-experimental research design, the study used a probit regression model to estimate key factors influencing food security. The results underscore the significance of factors such as irrigation (-0.906, p<0.01), extension services (-0.040, p<0.05), crop storage (-1.473, p<0.01), land ownership (-0.070, p<0.01), and female land ownership (-0.909, p<0.01) as crucial determinants of food security in Tanzania. The study advocates prioritizing community-based irrigation for reliable water sources, expanding targeted extension programs, investing in modern crop storage, ensuring secure land tenure, implementing comprehensive seed subsidies, and adopting a holistic approach to soil fertility management. Policymakers are urged to support these measures to enhance food security among smallholder farmers in Tanzania, promoting resilience, productivity, and sustainability.
Determinants of household food expenditure in Tanzania: Implications on food security
(Agriculture &Food Security, 2024) Ndakije Furaha R.; Sesabo,Jennifer K.; Lihawa, Robert M.; Mkuna, Eliaza
Food expenditure in developing countries particularly those in sub-Saharan Africa constitutes about 65–70% of total household expenditure. Existing literature on the determinants of household food expenditure in developing countries have mixed results. Thus, this study aimed at examining the determinants of household food expenditure in Tanzania and their implications on food security using country representative data from the 2017/18 household budget survey. The Two-Stage least squares (2SLS) regression analysis was used as method of analysis. Results show that, on average, monthly household food expenditure in Tanzania is about TZS 159,072.80(≈ US $ 69.2). Food expenditure exhibited a non-linear relationship with age of household head with income elasticity of 0.72%. Expenditure also increases with household size, household head sex, education, asset ownership, group membership and marital status while being located in rural areas is negatively associated with food expenditure. To increase household’s food expenditure with dietary diversity for improved health, strategies aiming at improving household income, family planning, gender equity, education and social cohesion are important which will further increase household’s food security.
Digitalization and agricultural transformation in developing countries: Empirical evidence from Tanzania agriculture sector
(Smart Agricultural Technology, 2024) Kitole, Felician A.; Mkuna Eliaza; Sesabo, Jennifer K.
Agribusiness can potentially increase value for agriculture and the entire value chain, but it is hard to achieve these goals without digitalizing the sector. The transformation reforms modern technology and digital infrastructure adoption to facilitate growth and inclusively. These conditions make the agricultural digitization transformation more appealing. Therefore, using a survey of 400 smallholder farmers in four regions of Rukwa, Ruvuma, Morogoro and Tabora, this study examines the interplay between digitization and agriculture transformation in Tanzania by focusing on the determinants and effects of digitization on smallholder farmers' welfare. The study used the double hurdle model to estimate the determinants and extent of digitization adoption; the Two-stage least square (2SLS) and the Control function approach (CFA) to estimate its effects on smallholder farmers' welfare. The findings revealed that access to credit (0.17428, p < 0.01), extension services (0.52884, p < 0.01), education and government support (0.10922, p < 0.05) are key determinants for agricultural digitization. Moreover, digitization was found to influence smallholder farmers' welfare significantly. The benefits of digitization across smallholder farmers in all regions were observed in enhancing extension services (76.50 %), pest management (71.25 %), and accessibility of the market information (72.25 %), enhance an access to financial services (74.75 %). In sum, to promote digital technology adoption among smallholder farmers, policymakers in Tanzania and developing nations should prioritize financial inclusion through tailored microfinance programs, educational initiatives must integrate digital literacy, enhance extension services, subsidized technology access, and encouraging public-private partnerships to create incentives for sustainable agricultural development.
E-Government in marketing a country: A strategy for reducing transaction cost of doing business in Tanzania
(International Journal of Marketing Studies, 2011) Kachwamba, Muhajir; Sæbø, Øystein
There are limited studies examining the role of Investment Promotion Agencies (IPA’s) and their respective marketing techniques used in attracting Foreign Direct Investment (FDI). Using an exploratory case study approach, this article addresses this research gap by exploring the role of e-government as a promotion technique in eliminating barriers to FDI inflows in Tanzania; particularly barriers related to information accessibility and bureaucratic procedures facing foreign investors in acquiring relevant licenses and business permits. The findings indicate that foreign investors utilize information to create knowledge of business environment in the host country, though some additional information may not be found due to informational specificity of a particular investment project. In addition, the findings indicate that implementation of e-government has reduced some monetary and non-monetary transaction costs of complying with government authorities. The article contributes to the existing body of knowledge in the field of marketing by examining the role of e-government services in the public sector marketing within a macro-marketing domain.
Engaging the Tanzanian diaspora in national development: What do we know and what are the gaps?
(African Journal of Economic Review, 2015) Utouh, Harold M ; Mutalemwa, Darlene K.
Over the past ten years there has been a significant change in African governments’ perception of their Diasporas. In the previous three decades, Diasporas were not seen as a resource that countries of origin could tap into for their development needs. This is no longer the case. Now, Diasporas are increasingly seen as positive actors: as countrymen and women abroad, who can contribute to development efforts in their homelands. In this context, this paper reviews literature on the major policies and initiatives used by countries to help support and promote diaspora engagement. To be specific, countries which have successfully engaged their diaspora in the national development process. The paper also highlights key factors of success of Tanzania’s neighbouring countries and other countries. It attempts to relate these practices to the case of Tanzania, given the current social, economic, political and cultural contexts. The Tanzanian experience reveals a wide range of interventions taken to facilitate participation by its diaspora in national growth efforts. While these interventions, are highly laudable- especially considering financial limits - there remains important weaknesses. Suggestions to improve existing measures are provided.
Engaging the Tanzanian diaspora in national development: What do we know and what are the gaps?
(African Journal of Economic Review, 2015) Utouh, Harold L.M.; Mutalemwa, Darlene K.
Over the past ten years, there has been a significant change in African governments’ perception of their diasporas. In the previous three decades, diasporas were not seen as a resource that countries of origin could tap into for their development needs. This is no longer the case. Now, diasporas are increasingly seen as positive actors: as countrymen and women abroad who can contribute to development efforts in their homelands. In this context, this paper reviews the literature on the major policies and initiatives used by countries to help support and promote diaspora engagement. To be specific, countries which have successfully engaged their diaspora in the national development process. The paper also highlights key factors of the success of Tanzania’s neighbouring countries and other countries. It attempts to relate these practices to the case of Tanzania, given the current social, economic, political and cultural contexts. The Tanzanian experience reveals a wide range of interventions taken to facilitate participation by its diaspora in national growth efforts. While these interventions are highly laudable- especially considering financial limits - there remain important weaknesses. Suggestions to improve existing measures are provided
Evolution in key indicators of maternal and child health across the wealth gradient in 41 Sub-Saharan African countries, 1986–2019
(BMC Medicine, 2024) Sesabo, Jennifer K.
Aggregate trends can be useful for summarizing large amounts of information, but this can obscure important distributional aspects. Some population subgroups can be worse off even as averages climb, for example. Distributional information can identify health inequalities, which is essential to understanding their drivers and possible remedies. Methods Using publicly available Demographic and Health Survey (DHS) data from 41 sub-Saharan African countries from 1986 to 2019, we analyzed changes in coverage for eight key maternal and child health indicators: first dose of measles vaccine (MCV1); Diphtheria-Pertussis-Tetanus (DPT) first dose (DPT1); DPT third dose (DPT3); care-seeking for diarrhea, acute respiratory infections (ARI), or fever; skilled birth attendance (SBA); and having four antenatal care (ANC) visits. To evaluate whether coverage diverged or converged over time across the wealth gradient, we computed several dispersion metrics including the coefficient of variation across wealth quintiles. Slopes and 5-year moving averages were computed to identify overall long-term trends. Results Average coverage increased for all quintiles and indicators, although the range and the speed at which they increased varied widely. There were small changes in the wealth-related gap for SBA, ANC, and fever. The wealth-related gap of vaccination-related indicators (DPT1, DPT3, MCV1) decreased over time. Compared to 2017, the wealth-gap between richest and poorest quintiles in 1995 was 7 percentage points larger for ANC and 17 percentage points larger for measles vaccination. Conclusions Maternal and child health indicators show progress, but the distributional effects show differential evolutions in inequalities. Several reasons may explain why countries had smaller wealth-related gap trends in vaccination-related indicators compared to others. In addition to service delivery differences, we hypothesize that the allocation of development assistance for health, the prioritization of vaccine-preventable diseases on the global agenda, and indirect effects of structural adjustment programs on health system-related indicators might have played a role.
Examining the effect of child labour in the profitability of women owned enterprises: A case of microcredit supported enterprises in Tanzania.
(Springer, 2018) Tundui, Charles S.; Tundui, Hawa P.
This paper examines the effect of child labor in the profitability of women owned enterprises. The study covered 429 women respondents who had access to microcredit in Morogoro and Iringa towns. We used the Ordered Prohibit to model the relationship between the predictors and the outcome variable. The findings show that the use of child labor plays a more significant role in the profitability of women businesses than any variable included in the analysis. Results have also shown that owners who possess business skills, who have access to markets and those who do not separate business resources from household resources are more likely to experience a profit increase in their enterprises than otherwise. On the other hand, access to loans doesn’t seem to translate into increases in enterprise profit. From these results, we gather that as a poverty alleviation strategy, microcredit access and micro enterprising are not a panacea, but will require other supporting policies and services to enable women to find their way out of poverty. It is also important that job creation and employment patterns of microcredit supported enterprises are studied and valued accordingly.
Exploring the nexus between health status, technical efficiency, and welfare of small-scale cereal farmers in Tanzania: A stochastic frontier analysis
(Journal of Agriculture and Food Research, 2024) Kitole, Felician A; Tibamanya, Felister Y; Sesabo, Jennifer K
Cereal production is important component of Tanzania's agricultural sector, as it provides food security and income for a significant portion of the population. However, low levels of technical efficiency and the negative impact of ill-health on cereal productivity have posed significant obstacles to the welfare of small-scale farmers in the country. This study estimates the technical efficiency of cereal producers in Tanzania, investigates the relationship between farmer health and cereal productivity, and establishes a link between technical efficiency and the welfare of smallholder farmers. Using data from the Tanzania Agriculture Sample Census survey 2019/20, the stochastic frontier production function was used to estimate technical efficiencies, while Tobit and instrumental variables models analyzed the impact of health on cereal production efficiency and the effects of efficiency on the welfare of cereal's small-scale farmers respectively. The findings indicate that the overall technical efficiency of cereal producers in Tanzania is 44.44%, with pure technical efficiency standing at 56.50%. In addition, poor health reduces the likelihood of cereal productivity efficiency by 0.297 (p < 0.01). In addition, efficiency was found to significantly improve household welfare, as it increases food security (0.35327, p < 0.01), household income (0.2914, p < 0.01), and nutrition status by reducing malnutrition (−0.36607, p < 0.01). The study recommends that rural agriculture development programs include health components to increase productivity, sustainability, and ultimately the standard of living of rural communities.
External debts as panacea to economic growth challenges in selected Eastern African countries: An application of the autoregressive distributed lag mode
(Science Mundi, 2024) Utouh, Harold M.L.; Tile, Augustino; Sesabo, Jennifer Kasanda
Foreign aid has significantly influenced medium- and long-term development initiatives in Eastern African countries. Project aid and non-project aid are the two main categories that describe foreign economic assistance (loans, credits, and grants). The primary aim of foreign aid has been to supplement the internal resources needed to quicken the economic development of the nations in Eastern Africa. This study investigated the influence of external debt on the economic growth of Eastern African countries (Kenya, Uganda, Rwanda, Burundi, and Tanzania) using the autoregressive distributive lag mode and panel data (1970–2020). The findings revealed that external debt had a significant adverse effect on economic growth. In Burundi, an increase in external debt reduces GDP by 5% in the short run, while in the long run, it reduces GDP by 19%; in Tanzania, it decreases GDP by 22%; and in Kenya, it reduces the GDP by 13%. Conversely, the findings indicated that the increased level of external debt positively influenced Uganda's GDP (0.03%) but was not statistically significant. Therefore, it is recommended that Eastern African countries source their income, apart from more external concessional debt, through bilateral or multilateral arrangements to plug into their budget deficits. Also, it is recommended that East African governments develop their external debt initiatives that offer further profitable investment opportunities to repay their foreign debt gradually. Moreover, strategies in the East African countries must be geared towards strengthening revenue mobilization to provide avenues to balance their external debts. For instance, improving the informal sector in these countries is a viable base for increasing revenue through taxes
External debts as panacea to economic growth challenges in selected eastern African countries: An application of the autoregressive distributed lag mode
(SCIENCE MUNDI, 2024) Tile, Augustine; Utouh, Harold M.L.; Sesabo, Jennifer K.
Foreign aid has significantly influenced medium- and long-term development initiatives in Eastern African countries. Project aid and non-project aid are the two main categories that describe foreign economic assistance (loans, credits, and grants). The primary aim of foreign aid has been to supplement the internal resources needed to quicken the economic development of the nations in Eastern Africa. This study investigated the influence of external debt on the economic growth of Eastern African countries (Kenya, Uganda, Rwanda, Burundi, and Tanzania) using the autoregressive distributive lag mode and panel data (1970–2020). The findings revealed that external debt had a significant adverse effect on economic growth. In Burundi, an increase in external debt reduces GDP by 5% in the short run, while in the long run, it reduces GDP by 19%; in Tanzania, it decreases GDP by 22%; and in Kenya, it reduces the GDP by 13%. Conversely, the findings indicated that the increased level of external debt positively influenced Uganda's GDP (0.03%) but was not statistically significant. Therefore, it is recommended that Eastern African countries source their income, apart from more external concessional debt, through bilateral or multilateral arrangements to plug into their budget deficits. Also, it is recommended that East African governments develop their external debt initiatives that offer further profitable investment opportunities to repay their foreign debt gradually. Moreover, strategies in the East African countries must be geared towards strengthening revenue mobilization to provide avenues to balance their external debts. For instance, improving the informal sector in these countries is a viable base for increasing revenue through taxes.
Factors affecting maize production in Kiteto district, Manyara region, Tanzania: Cross sectional design
(Science Mundi, 2024) Utouh, H.M
Maize is one of the most important food crops globally; however, its production in most developing countries has been facing several challenges that also affect the livelihood of the large number of smallholder farmers who highly depend on the crop for food and income. Therefore, to deepen understanding of the same, the current study explores factors affecting maize production in Kiteto district, Manyara, Tanzania. This study employed a cross-sectional research design to gather primary data from a randomly selected sample of 100 individuals. The data was analysed using the multiple linear regression technique. The findings revealed that farm size (0.0083, p<0.01), access to irrigation (0.0878, p<0.01), and access to improved seeds (0.0582, p<0.01) had a significant statistical influence on the level of maize production. Furthermore, regarding the challenges, the results were analysed through the utilisation of measures such as the mean, frequencies, and percentages. Furthermore, the study found that shortage of rainfall, maize price fluctuation, diseases, and pests were the main challenges facing maize farmers in the study area. The study findings recommend that to improve maize production, there is a need to increase accessibility to irrigation facilities, improved seeds, fertiliser, and modern farming techniques among smallholder maize farmers, and this may be done by the government in collaboration with the private sector.
Farmer’s perceptions on climate change impacts in different rice production systems in Morogoro Tanzania
(International Journal of Scientific and Research Publications, 2016) Mugula, Victoria Jovin; Mkuna, Eliaza
This study was done to assess farmers’ perceptions on climate change impacts in different rice production systems in Morogoro Tanzania. In specific the study analyzed farmers' socio-economic characteristics in different rice production systems in Morogoro Tanzania and also examined farmers' perceptions on climate change impacts in different rice production systems in Morogoro Tanzania. Both secondary and primary data using a structured questionnaires and focus group discussions were collected from Morogoro rural and Mvomero Districts in Morogoro Region, Tanzania. The study employed cross sectional research design by which data were collected at one point in time. However the sample size involved was 150 respondents. The analyses were done using descriptive statistics to analyze farmers socio-economic characteristics and Likert scale was used to assess respondents’ perceptions on the climate change impacts in different rice production systems. The results indicate that socio-economic factors such as age, education level, household size and main activities of the household affect the climate change adaptation and coping strategies perception of rice farmers. Moreover small number of respondents believed that the climate change is threat to future food security, and also majority of farmers perceived that climate change might lead to crop failure, unpredicted seasons, drought and floods. The study suggested that there is a need for upscalling of awarewness, education and capacity building on good agricultural practices which will assist farmers to cope with climatic changes.
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.

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