Analysis reveals foreign direct investment and trade openness boost economic growth in Tanzania, indicating policy adjustments are essential.
Key Points
Foreign direct investment significantly enhances economic growth in Tanzania over the long run, and trade openness plays a positive role as well.
Findings from the ARDL estimation show that foreign direct investment, exchange rates, and trade openness positively impact growth, while higher interest rates negatively affect growth.
Using secondary time series data from 1987 to 2024, the study employed the Auto-Regressive Distributed Lags (ARDL) technique and Granger causality tests to analyze relationships.
Strengthening FDI-enhancing policies and improving international trade regulations are crucial for driving sustainable economic growth in Tanzania.