The Impact of Public Debt on Economic Growth in Tanzania
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Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Dodoma
Abstract
This study aimed to determine the impact of public debt on economic growth in Tanzania. The study was guided by three specific objectives, which were: to determine the effect of foreign debts on economic growth in Tanzania; to analyze the effect of domestic debts on economic growth in Tanzania; and to examine the causal relationship between domestic debts, foreign debts, and economic growth. The study employed secondary data from the National Bureau of Statistics and the Bank of Tanzania. In addition, the auto-regressive distributed lag model (ARDL) was used for time series modeling. Subsequently the results revealed that Domestic debt was found to have a positive influence on economic growth in Tanzania with a regression coefficient of 0.927 (the p-value was 0.005). The results for the second objective, found that, foreign debt negatively influence economic growth with a regression coefficient of -3.278, (the p-value was 0.005). Moreover, the study found that there is no causality between the external debt and economic growth, that there is a two-way direction of causality between economic growth and internal debt, and that there is a one-way direction of causality from the external debt to internal debt, that is, the external debt enhanced the internal debt. The study concluded that exports had a significant positive impact on economic growth. The study also discovered that while exports and imports have a positive impact on economic growth, an increase in public debt, both internal and external, has a significant negative impact. Therefore, in order to reduce these effects on economic growth, the Bank of Tanzania should control these growth-affecting factors. Finally the study recommended that future research may employ quarterly data to acquire a greater number of observations that may be studied for their impact of public debt on the growth of Tanzania's domestic product.
Description
Dissertation (Business Administration)
Keywords
public debt, economics, economic growth, foreign debts, domestic debts
Citation
William, K. A.,(2023). The Impact of Public Debt on Economic Growth in Tanzania, (Master's Dissertation). The University of Dodoma