Tanzanian Economic Review

Evaluating Tanzania’s Overlapping regionalism, a comparison of trade relations between SADC & the EAC

Aaron Ecel — 2025-03-13

This study evaluates Tanzania’s overlapping regionalism in the EAC and SADC by analyzing its Export Intensity Index, Revealed Comparative Advantage, and Trade Complementarity Index for the period 2013–2022. The findings reveal that Tanzania enjoys stronger trade ties and a broader comparative advantage in the EAC, particularly in key exports such as fertilizers and rice, compared to a narrower focus on gold within SADC. Gold dominates exports to both blocs but highlights a critical need for diversification. The analysis identifies milled rice as holding the greatest potential for export growth in both regions. These results inform policy recommendations emphasizing diversification beyond gold and leveraging Tanzania’s comparative advantage in high-potential products to align with AfCFTA objectives. Strengthening EAC-based strategies is proposed as a model for AfCFTA harmonization due to existing robust trade relations. This study underscores the importance of targeted export promotion to enhance Tanzania’s trade competitiveness within Africa.

JEL Classification: F14, F15, F53.

Intimate Partner Violence on Women and Household Food Insecurity

Martin Chegere — 2025-03-13

In developing nations, there are elevated levels of intimate partner violence (IPV) directed at women. The human capital model of health demand posits that if IPV impacts women's health, it will diminish their health capital, leading to decreased productivity, lower earnings, and reduced production of goods relevant to their individual and household well-being. This paper aims to investigate the proposition that IPV on women has an effect on household food insecurity in Tanzania. Utilizing violence data from the first round of Tanzania's national panel survey along with food security data from the second round, this study examines that hypothesis. However, the findings do not provide robust empirical support for the idea that women's abuse significantly influences household food security, whether in rural or urban settings. The study suggests potential avenues for further research in this area.

JEL Classification: J12; J24; Q18

Analysis of Post-Harvest Losses in Cassava Value Chain. Causes and Strategies to reduce them in Uganda

Vincent Ssajjabbi — 2025-03-13

Many resource-poor countries are putting a lot emphasis towards improving food security but their efforts are still constrained by post-harvest losses. This paper focuses on cassava to expose the causes of post-harvest losses at household level; the stage at which farm households experience losses and the strategies used by farmers to reduce losses. Data from the National Agricultural Advisory Services were used and were analyzed using Probit model. Results indicate that post-harvest losses occur due to absence of storage facilities, pest invasion and lack of market information. Also, post-harvest losses occur at different stages even within a single household and too, households use differing strategies to reduce losses. Thus, interventions aiming at promoting food security need to supplement the efforts with enhanced mechanisms for post-harvest handling. The study recommends establishment of community ware houses for farmers’ output as well as improved agro-processing processes to reduce on wastage at household level.

JEL Classification : O13, Q13, Q18

Impact of Banana Value Chain Participation on the Welfare of Farm Households in Tanzania

Hildo Mrema — 2024-12-31

Banana is an important staple food for many people, featuring among the ten most cropped plants worldwide. This study establishes the link between banana value chain participation and household welfare using consumption as a proxy for welfare. Using panel data, methods like pooled probit, fixed effects, and Heckit models were applied. The pooled probit results show that working outside agriculture reduces the likelihood of participating in the banana value chain, while factors like the number of banana plants, harvested quantity, and organic fertilizer use increase participation likelihoods. The fixed effects model indicates that banana value chain participation, working outside agriculture, mobile phone ownership, and household size positively impact welfare, contributing to poverty reduction and food security. The Heckit model results support the fixed effects findings. Therefore, agricultural policies promoting improved banana seeds and better market access are crucial for addressing food insecurity and improving the welfare of smallholder banana farmers. JEL Classification: C33; D23; D60; L14; O17; Q13.

Impact of user fees and levies on community development projects in Southwestern Nigeria: Case of Osun and Oyo States

Onyebuchi Iwegbu — 2024-12-31

Deficits in basic infrastructure have been acknowledged as one of the challenges of local communities globally and this is quite relevant in the Southwestern Nigeria. Due to shortage of government funding, infrastructural deficit has continued to limit developments in Osun and Oyo states. Hence, communities’ resort to the use of user fees in addressing the funding gap. This study examines the effect of user fees on community development in these selected states. The study employs structural equation model (SEM) to analyze the research objective among 3,672 households. The result suggests that informal user fees have a negative and significant effect on the extent of community development in Osun and Oyo States, although, the willingness to pay by households has a positive effect on community development projects. The study recommends joint collaboration of local community leaders, Community Development Associations (CDA) and community members towards contribution of user fees and monitoring of same to enhance and fast track community development projects.

JEL Classification: H20, H21, H72

The Effect of Loan Restructuring on Profitability of Clients’ Projects: The Case of Selected Projects.

Evelyn Richard — 2024-12-31

Banks restructure client loans as a risk management strategy to ensure recovery and protect profits. While many studies examine loan restructuring, its impact on clients’ project profitability remains underexplored. This study analyses 109 projects financed by a major Tanzanian investment bank to assess this relationship. Using hierarchical linear regression, findings show that restructuring enhances the positive effect of the repayment period on project profitability while reducing the impact of repayment amount. Interestingly, interest rates appear to play no role in restructuring decisions. These results highlight the importance of risk management in banking and suggest that loan restructuring should prioritize recovery and clients’ profitability.

JEL Classification: G21, G32, G33, E43, C30

“Progressive Tax System to Pay for a Just Future” Fighting inequality through progressive taxation: Tanzania Context

Balozi Morwa — 2024-12-31

This paper focuses on the status and trends of inequality and the progressive tax system to pay for a just future in Tanzania across some selected taxable sources. It is typically desk research study dwelled on analyzing and synthesizing secondary data/information and literature concerning the issue of under resource mobilization in Tanzania. Findings of the study show that, in Tanzania, the country's tax-to-GDP ratio increased from 10% in 2004/05 to 11.8% in 2022/23, with a peak of 13.3% in 2015/16. This means in every 100 items which passes/was supposed to pass in the market, it is only 13 items which are taxed. Further, it is found that there is little wealth-related taxation in Tanzania. Thus, the poor and the working population bear the main burden, and in search for justice, this is unfair. The study recommends, that taxes on wealth are a policy instrument to address wealth inequality and could raise substantial revenue while shoring up structural weaknesses in the current income tax system. It is an additional way to raise revenues and address wealth inequality through budget justice.

Determinants of Foreign Direct Investment Inflows in Tanzania

Benjamine Gaspar Miku — 2024-12-31

This study examines the determinants of foreign direct investment (FDI) inflows in Tanzania using the Autoregressive Distributed Lag (ARDL) model with data spanning from 1970 to 2023. The ARDL approach was chosen for its robustness in handling non-stationary data with mixed order of integration and capturing both short-term and long-term dynamic relationships. The findings indicate that GDP, exchange rate and trade openness significantly influence FDI inflows. A higher GDP positively affects FDI, reflecting market attractiveness, while trade openness facilitates investment by improving market access. However, the exchange rate negatively affects FDI inflows. Policy recommendations emphasize fostering economic growth, promoting trade liberalization and stabilizing the exchange rate through effective monetary policies. Ensuring economic stability and reducing trade barriers will create a more favorable investment environment, attracting more FDI and promoting long-term economic growth.

JEL Classification : F21; F43; O41.

The The Role of Foreign Direct Investment on Economic Growth in Tanzania: Empirical Evidence from Emerging Sectors

Hamisi Salumu Nampoto — 2024-12-31

FDI plays crucial role in stimulating development of various sectors in economy such as provision of skilled labour, employment creation, source of capital, management and technological transfer. Over the past 30 years, the share of FDI in World’s economy has been transformed from manufacturing sector to service sector thus creating various emerging sectors.The study employed time series secondary data for 22 years from 1999 to 2020, then used dickey-fuller and Philips perron tests for stationarity, Auto Regressive Distributed Lag (ARDL) bound test for co-integration, ARDL model to estimates long-run relationship lastly, diagnostic tests were applied to check validity and reliability of variables. The study revealed that FDI inflow in transport and storage sector have weak positive impact on economic growth while FDI inflow to other sectors have insignificant impact to economic growth. Thus, to combat such outcomes, the government is advised to attract more foreign investment to sectors with undesirable impacts with productive strategies to improve sectors performance on economic growth through establishment of favourable investment policies such as tax policies to avoid double taxation, capital account liberalization policies and financial institution policies to create conducive investment environment.

Beyond the formal economy: employment and income perspectives in Tanzania

Jehovaness Aikaeli — 2024-12-31

This study investigates employment and earnings levels in Tanzania's informal and formal sectors, as well as the factors that determine them. Despite growth in the economy, insufficient job creation in the formal sector has rendered the informal sector an inevitable source of employment for youths. We use the Blinder-Oaxaca decomposition to examine the disparity between formal and informal earnings, and Quantile Regression to investigate the factors that determine earning differentials across income groups. Among key findings are: first, there are major differences in average earnings between the formal and informal sectors, with the informal sector having lower average earnings; second, women's earnings are lower in both sectors and across other sectors; and lastly, the formal sector has a higher percentage of employees who work a second job than the informal sector. Employee characteristics, gender, taking on another work, relocating to a rural location, and transferring to private employment and the informal sector are the factors that contribute to earnings disparities. The following policy implications are drawn: investing in education is crucial for raising earnings; women's participation in higher paying activities is important for empowering them; and an overall improvement in employee earnings is important for reducing the need to get a second job to supplement their incomes. JEL: E24; E26; O17