Utouh, Harold M.L.Rao, M Koteswara2024-08-072024-08-072016APAISSN: 2395 -5775https://scholar.mzumbe.ac.tz/handle/123456789/1023NilThe purpose of this paper is to provide an analytical insight into Foreign Direct Investment (FDI) on employment creation in Tanzania, centring on the manufacturing sector which is held as a conduit for social economic development. It analyses the concerted efforts on the part of the government in attracting conspicuous FDI, and in particular, the relationship between the increase in FDI and employment generation. Tanzania started to adopt economic reforms and open policy in the mid-1980s. However, the speed of the Tanzanian government's established policy to attract FDI was more felt in the 1990s and since then the degree of successful efforts to attract FDI has increased. Methodology - The data used in this study consists of total employment, GDP and inward foreign direct investment (FDI). These annual data covered the period from 1980 to 2012 because it is only in this period that the data is available. The methodology to test the effects of the variables i.e., FDI, GDP and Employment creation has been confined to the least squares technique. The co-integration of the variables has been ascertained via the application of the Augmented Dickey-Fuller Test and is found to hold in the long run. Findings – the findings indicate that FDI has a positive and significant effect on employment generation in Tanzania and GDP is translated to have influenced the economic growth. Practical implications – A conducive business environment, a more liberalised economy, institutional restructuring and enhanced private sector-led development will lead to an increase in foreign investment. Local entrepreneurial capacity should be empowered if the country wishes to have sustainable growth and employment creation. Originality - The paper presents original findings based on research related to FDI and employment creation in the sector of manufacturing industries.en-USForeign Direct InvestmentEmployment creation - TanzaniaEconomic growth -Tanzaniamanufacturing sector - TanzaniaAugmented Dickey Fuller TestFDIs inflows in TanzaniaManufacturing Sector in TanzaniaFDI and Employment Creation in TanzaniaTest for heteroscedasticityTime series regressionArticle