Analyzing the impact of remittance inflows on Tanzania’s social development and economic growth

Hellena Mohamedy Mushi

Cogent Economics & Finance, 2024, vol. 12, issue 1, 2345298

Abstract: This journal article analyses the impact of remittance (REM) inflows on Tanzania’s social development and economic growth (Egrow) spanning from 1990 to 2022 data from the World Bank (WB), International Monetary Fund (IMF) and World Economic Outlook (WEO) were used. The purpose of this article was to measure the relationship between EGrow and REM by using the following variables: Investment (INV), Population growth (POP Grow), Exchange rate (EXCHR), Government Expenditure (GOVEXP) and Inflation (INFL). The study aimed to examine the impact of these factors on REMs on the EGrow concept by integrating it into REM studies in Tanzania. The selected factors on REMs have not been included in most REM studies conducted in Tanzania; thus, their inclusion in the study expands our knowledge of REM utilization in Tanzania. Utilizing the Fourier Stationarity Test and applying the general to a specific technique, this research findings unveil REMs’ positive and notable impact on Tanzania’s EGrow. Additionally, POP Grow, INV, EXCHR, GOVEXP and INFL exert a robust and substantial influence on REM. In conclusion, the empirical findings underscore the pivotal role of REMs in driving EGrow in Tanzania. The journal article recommended that decision-makers create proactive measures to encourage REM inflows.This study investigates the dramatic impact of remittance inflows on Tanzania’s socioeconomic environment between 1990 and 2022. The study examines the complex relationship between remittances and key economic indicators such as investment, population growth, exchange rates, government spending, and inflation by combining data from reputable sources such as the World Bank, International Monetary Fund, and World Economic Outlook. By include these variables in the research, the study not only improves our understanding of remittance dynamics, but also sheds light on hitherto unknown aspects of their impact on Tanzanian economic growth. The findings show a significant and positive relationship between remittance inflows and economic progress, highlighting remittances’ critical role in driving Tanzania’s growth trajectory. Furthermore, the study reveals the subtle linkages between remittances and other socioeconomic indicators, revealing their strong and significant impact on one another. This detailed analysis not only contributes to the academic conversation on remittances, but it also recommends policymakers to focus more on policies that encourage the diaspora to contribute to the country’s development. In this sense, the government should devise novel strategies to capture the diaspora’s funds. The study emphasizes the need of taking proactive efforts to promote and exploit remittance inflows for Tanzania’s long-term socioeconomic growth.

Date: 2024
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DOI: 10.1080/23322039.2024.2345298

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