Tanzanian Economic Review

Household Shocks and Children's Labour: Panel Survey Evidence from Tanzania

Monica Sebastian Kauky — 2024-07-26

Household shocks can significantly affect a family's well-being, often leading them to resort to child labour as a coping mechanism. However, child labour not only impedes a country's progress but also detrimentally affects children's welfare. In this study, we investigated the effects of household shocks on child labour in Tanzania, utilising data from two waves of the National Panel survey conducted in 2014–15 and 2019–20. The study employed a fixed-effects regression model to examine the effects of household shocks on child labour measured by child hours of work. The findings of this study reveal that both climate and food price shocks correlate with increased child labour prioritising hours. We also observed that child school attendance acts as a deterrent to child labour. To address these challenges, governments should prioritize implementing social safety nets and assistance programs to alleviate the impact of climate and food price shocks on vulnerable households.To add on this, there is a pressing need for policymakers to focus on expanding access to and enhancing the quality of education, particularly in rural areas where child labour rates are disproportionately higher. Such measures have the potential to effectively reduce child labour incidence and simultaneously improve schooling outcomes.

Macroeconomic Determinants of Renewable Energy Consumption in Tanzania: A Time Series Analysis from 1990-2020.

Abdon Stephen Msechu — 2024-07-26

This study examines the macroeconomic determinants of renewable energy consumption in Tanzania using time-series data from 1990 to 2020. Stationarity tests such as the augmented Dickey-Fuller and Zivot Andrews are conducted, along with the autoregressive distributive lag bound test, to assess long-run relationships between the variables, which allows for the use of the error correction model. Moreover, the Granger causality test examines the causal links between the variables. In the long run, economic growth and trade openness impact renewable energy consumption positively. Carbon dioxide emissions impact negatively the dependent variable. Short-run analysis reveals a negative coefficient for economic growth and a positive coefficient for interest rates. Granger causality testing supports the feedback hypothesis between renewable energy consumption and economic growth. Policy implications include the need for sustained efforts to promote economic growth, increase trade and investments, and enhance accessibility and affordability of renewable energy technologies to foster sustainable energy consumption.

Effect of Mobile Phone Access on Non-Farming Self- Employment and Income Among Female-Headed Households in Tanzania

David Ngwilizi — 2024-07-26

While having access to mobile phone technologies has shown a promising and relevant effect on rural households' livelihoods, it is important to investigate their effect on other vulnerable groups, such as female- headed households. This paper uses a sample of 1,641 households from Tanzania's national panel data, rounds four and five of 2014/15 and 2020/21, respectively. It employs the 2SRI framework to investigate whether access to mobile phones enhances female-headed households participation in non-farm self-employment and improves their income. The results indicate that mobile phone technology significantly increased the likelihood of female-headed households participating in non-farm self-employment enterprises by 11.4 percent and improved the share of the income of the self-employment enterprises in the total household income by 7.9 percent. The estimate further shows evidence that female household heads located in urban areas, skilled and younger experience greater income gain than their counterparts. Thus, the efforts that support and promote mobile phone technology access and usage, coupled with literacy rate improvement among vulnerable sub-populations or groups, are pertinent issues for creating employment and improving income for the groups.

Social, Economic and Environmental Determinants of Life Expectancy in Nigeria

Idowu Onisanwa — 2024-06-30

Life expectancy at birth is essential for evaluating a country's economic and social development. In Nigetria, life expectancy increased in the last decades, however, it is below the sub-Saharan Africa average of 60.24 years and 72.98 years global average (World Bank, 2023). This study investigates the determinants of life expectancy in Nigeria.

The Grossman (1972) health model provided the theoretical framework for the study. Data were obtained from World Bank database from 1980 to 2022. The determinants of life expectancy considered comprises socio, economic, and environmental factors. All variables tested for their time series properties, using Augmented Dickey-Fuller, and Phillip-Perron tests, the test of co-integrations among them were examined using the Auto-regressive distributed lag (ARDL) bound test approach.

The GDP per capita (p=0.0011), adult literacy rate (p=0.0024), total fertility (p=0.0659) and the effect of degree urbanization (p=0.0292) have a positive and statistically significant relationship with life expectancy. The relationship between CO 2 emission (p=0.0717) and life expectancy at birth is negative and significant. The coefficient of the error correction model (P=0.000) is negative and statistically different from zero.

Growth of per capita income, improve literacy rate, fertility rate, and degree of urbanization are important determinants of life expectancy in Nigeria. Also, environmental degradation influenced life expectancy though negatively. Intuitively, as the social and economic indicators in the country are improving, and CO 2 emission is reducing, the people tend to enjoy prolonged life. The study was not able to capture some important determinants of improved life expectancy such as access to safe drinking water, smoking rate, calorie intake, crime rate, and per capita health expenditure.as well as other factors.

A better understanding of the determinants of life expectancy in Nigeria using time series data that span 1980 – 2022 with sufficient degree of freedom to account for a large percentage influence of socio, economic, and environmental factors on life expectancy.

Assessment of Uganda and Tanzania's Competitiveness in Prepared Foodstuffs within the EAC Market: A Comparative Analysis

Aaron Ecel — 2024-07-26

This study examines the competitiveness of Uganda and Tanzania in the East African Community's (EAC) prepared foodstuffs trade, a market valued at $2.5 billion in 2022. We analyze trade data from the International Trade Centre and UN COMTRADE (2013-2022) using CMSA, RCA, and TII indices for ‘Prepared foodstuffs’ (as defined by the Harmonized Commodity Description and Coding System). Our findings reveal contrasting contexts. Uganda's export growth stemmed from the composition of its exports, with products highly sought-after in the EAC. However, distribution inefficiencies and declining competitiveness in certain categories hampered further growth. Conversely, Tanzania's competitive edge initially boosted exports, but they were limited by neglecting high-growth EAC markets(distribution inefficiencies). By identifying product categories within prepared foodstuffs that require targeted interventions, this study highlights lucrative opportunities within the EAC marketplace. This analysis goes beyond basic export values, exploring the underlying reasons for trade performance and providing valuable insights for policymakers and exporters in the region.

Determinants of Tax Collection from Multinational Enterprises in Tanzania

Straton Makundi — 2024-07-26

Tax collection to finance public expenditure is a major challenge for developing countries. There is a concern that Multinational Enterprises (MNEs) avoid paying taxes by shifting taxable income to countries with low corporate tax rates. The paper explored the factors that determine tax revenue collection from MNEs in Tanzania. Primary data from 140 MNEs respondents, were collected, using a questionnaire and analyzed using multiple linear regression analysis. The findings indicate that the lack of comparable data for price benchmarking of transactions undertaken between MNEs to determine if they are at arm’s length affects tax revenue collection from MNEs. The availability of comparable information is critical as it enables the use by MNEs of an appropriate transfer pricing method hence appropriate tax payments. Practically, the paper highlights the need for the government to work with MNEs to address the challenge of lack of comparable data and consider the effectiveness of alternative methods to transfer pricing methods including the fixed margin method and the use of global minimum tax rate. Not including other factors which may influence tax collection from MNEs, using only primary data and use of a questionnaire to collect data are limitations that may be addressed in future studies.

A Case Against Trophy Hunting Through Utilitarianism Lens: Evidence from Selous Game Reserve, Tanzania

Ritha Kalokola — 2024-07-26

The paper delves into the debate on trophy hunting as a conservation tool, examining it from a utilitarian perspective. It financially analyzes the costs and benefits of trophy hunting using a simplified cost-benefit analysis. The study employs a mixed methods design, incorporating both quantitative and qualitative methods by gathering data from Selous Game Reserve (SGR) and its adjacent villages through interviews with 108 respondents. The findings indicate that trophy hunting in SGR generates positive net benefits of 310,438 USD, making it financially viable. However, the study also reveals that conservation and local community development are not prioritized in its expenditures. Moreover, the negative social and ecological impacts of trophy hunting mean it does not provide the greatest benefit to the greatest number, as Utilitarian theory requires. Therefore, the study concludes that trophy hunting is unethical and recommends against it. Thus, sustainable wildlife conservation and income generation options such as ecotourism may be tested and considered in Tanzania.

The Effects of Integrated Conditional Cash Transfers and Public Works Programs on Household Income Generation in Rural Tanzania

Fides Emmanuel — 2024-07-26

Conditional cash transfers (CCTs) and public works (PWs) programs are implemented to improve the welfare of extremely poor households in rural Tanzania. However, there is limited information on how integrated programs impact household income generation. Using the propensity score matching method, data from both treatment and control groups were analyzed, focusing on major income-generating activities in rural areas such as crop farming, livestock keeping, non-farm businesses, and casual labor. The findings reveal that the programs have not significantly impacted income- generating activities among poor households, indicating persistent difficulties in escaping the poverty cycle. Despite this, the programs have stimulated non- farm businesses, which are typically categorized as petty businesses with low returns. Encouraging outcomes were observed in some households that utilized their cash to purchase farm inputs and livestock. Implying that policymakers and program founders should consider adding productive conditions such as promoting crop farming, livestock keeping, and group savings.

Monetary Policy and the Macroeconomy: The Ethiopian Experience

Matias Assefa — 2024-07-26

Successful conduct of monetary policy is known to be critical for ensuring macroeconomic stability. The central banking system of Ethiopia has achieved stability neither in prices nor in the foreign exchange market in the recent history. However, it is unclear how monetary policy decisions translate into important macroeconomic outcomes in Ethiopia. This paper uses descriptive tools and econometric estimates from a structural vector autoregression model based on quarterly time series data for 2006-2020 to address this question. It is shown that reserve money, which is the central bank’s operating target, is a weak predictor of macroeconomic goal variables. This observation, allied with the lack of central bank independence, transparency and communication with the public, can help explain the inefficacy of the monetary targeting regime. It is also found that the prevailing structure and development of the financial system is problematic for effective monetary transmission. The results imply that successful monetary policy requires a two- pronged effort: a short-run strategy aimed at revising the monetary policy framework, and a medium- to long-run strategy aimed at reforming the financial services sector.

The Determinants of Local Destination Air Ticket Demand: A Lesson from Norwegian Airlines Operating on the Link Between Molde and Oslo

PATRICK SINGOGO — 2024-07-26

The study aimed at examining the influence of air ticket full price, air ticket happy price, car price, presence of express bus, train price, population, and seasonality on air ticket demand. Based on secondary data for the air traffic on the link between Molde and Oslo, i.e., from January 2013 to December 2019, and by using multiple linear regression analysis, it was found that air ticket happy price, train price, population, and seasonality significantly predict local destination air ticket demand. The findings are useful in explaining the determinants of local destination air ticket demand. Thus, understanding the determinants of local destination air ticket demand, i.e., air ticket price, train price, population, and seasonality, is essential in determining local destination air ticket demand to enhance managerial planning. Moreover, this study provides building blocks for the applicability of demand theory in the airline industry.