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Econometric Analysis of FDI in the Mining Sector to Tanzania’s Export Capacity


  • Johansein Rutaihwa
  • Aneth Simwela
  • Amina Ramadhani

    () ("Dimitrie Cantemir" Christian University)


This study concentrated in examining the role FDI in the Mining Sector to Tanzania’s Export Capacity during 1989-2009. The study uses Ordinary Least Squares (OLS) as analytical techniques for this purpose. The results from OLS show that the total exports performance to the rest of the world is negative and insignificant, which implies that the contribution of FDI in mining have been weakly and exerting negative pressure on Tanzania’s export performance over the period. The result on the relationship between Tanzania export performance and FDI in mining shows to be statically insignificant however it confirms the hypothesis of the positive relationship among the variables, this kind of results can justify that the benefits deriving from mining transformation do not turn up within the period when the investments are made, but possibly it takes some time for this to record. It is therefore, suggested that there is a need to sustain current inflows and attract new FDI, but can be adjusted by enhancing the domestic investments in mining sector; addressing the supply and demand side constrains; accelerating growth in the sector by the interventions in reviewing and implementation of Mining Policy by targeting at value addition and improve export performance; facilitate exports of final products made of minerals rather than focusing on exporting raw gold, Tanzanite, diamond and other minerals; improve physical infrastructure both transport and communication sectors; think in terms of quality, not quantity ,provide a link between small scale producers and large scale mining companies to ensure that both parties are benefiting from the sector; facilitate research and development in the mining sector; align mining policies and other local and environmental policies to ensure sustainable development in the sector; and Provide a transparent and appropriate incentive and regulatory framework.

Suggested Citation

  • Johansein Rutaihwa & Aneth Simwela & Amina Ramadhani, 2012. "Econometric Analysis of FDI in the Mining Sector to Tanzania’s Export Capacity," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(1-2), pages 25-37, March-Jun.
  • Handle: RePEc:khe:journl:v:4:y:2012:i:1:2:p:25-37

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    References listed on IDEAS

    1. P. Korhonen, 1998. "Multiple Objective Programming Support," Working Papers ir98010, International Institute for Applied Systems Analysis.
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    Cited by:

    1. Manamba EPAPHRA, 2016. "Foreign Direct Investment and Sectoral Performance in Tanzania," Journal of Economics and Political Economy, KSP Journals, vol. 3(4), pages 670-719, December.

    More about this item


    FDI; Export Capacity; Mining; Ordinary Least Squares;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation


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