Mushi, Hellena Mohamedy
A icle
Analyzing he impac o emi ance in lows on Tanzania’s
social de elopmen and economic g ow h
Cogen Economics & Finance
P o ided in Coope a ion wi h:
Taylo & F ancis G oup
Sugges ed Ci a ion: Mushi, Hellena Mohamedy (2024) : Analyzing he impac o emi ance in lows on
Tanzania’s social de elopmen and economic g ow h, Cogen Economics & Finance, ISSN 2332-2039,
Taylo & F ancis, Abingdon, Vol. 12, Iss. 1, pp. 1-12,
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Analyzing he impac o emi ance inflows on
Tanzania’s social de elopmen and economic
g ow h
Hellena Mohamedy Mushi
To ci e his a icle: Hellena Mohamedy Mushi (2024) Analyzing he impac o emi ance
inflows on Tanzania’s social de elopmen and economic g ow h, Cogen Economics & Finance,
12:1, 2345298, DOI: 10.1080/23322039.2024.2345298
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© 2024 The Au ho (s). Published by In o ma
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DEVELOPMENT ECONOMICS | RESEARCH ARTICLE
Analyzing he impac o emi ance in lows on Tanzania’s social
de elopmen and economic g ow h
Hellena Mohamedy Mushi
Mbeya Campus College, Mzumbe Uni e si y, Mbeya, Tanzania
ABSTRACT
This jou nal a icle analyses he impac o emi ance (REM) in lows on Tanzania’s
social de elopmen and economic g ow h (Eg ow) spanning om 1990 o 2022 da a
om he Wo ld Bank (WB), In e na ional Mone a y Fund (IMF) and Wo ld Economic
Ou look (WEO) we e used. The pu pose o his a icle was o measu e he ela ionship
be ween EG ow and REM by using he ollowing a iables: In es men (INV),
Popula ion g ow h (POP G ow), Exchange a e (EXCHR), Go e nmen Expendi u e
(GOVEXP) and In la ion (INFL). The s udy aimed o examine he impac o hese ac o s
on REMs on he EG ow concep by in eg a ing i in o REM s udies in Tanzania. The
selec ed ac o s on REMs ha e no been included in mos REM s udies conduc ed in
Tanzania; hus, hei inclusion in he s udy expands ou knowledge o REM u iliza ion
in Tanzania. U ilizing he Fou ie S a iona i y Tes and applying he gene al o a spe-
ci ic echnique, his esea ch indings un eil REMs’posi i e and no able impac on
Tanzania’s EG ow. Addi ionally, POP G ow, INV, EXCHR, GOVEXP and INFL exe a
obus and subs an ial in luence on REM. In conclusion, he empi ical indings unde -
sco e he pi o al ole o REMs in d i ing EG ow in Tanzania. The jou nal a icle ecom-
mended ha decision-make s c ea e p oac i e measu es o encou age REM in lows.
IMPACT STATEMENT
This s udy in es iga es he d ama ic impac o emi ance in lows on Tanzania’s socioe-
conomic en i onmen be ween 1990 and 2022. The s udy examines he complex ela-
ionship be ween emi ances and key economic indica o s such as in es men ,
popula ion g ow h, exchange a es, go e nmen spending, and in la ion by combining
da a om epu able sou ces such as he Wo ld Bank, In e na ional Mone a y Fund, and
Wo ld Economic Ou look. By include hese a iables in he esea ch, he s udy no only
imp o es ou unde s anding o emi ance dynamics, bu also sheds ligh on hi he o
unknown aspec s o hei impac on Tanzanian economic g ow h. The indings show a
signi ican and posi i e ela ionship be ween emi ance in lows and economic p o-
g ess, highligh ing emi ances’c i ical ole in d i ing Tanzania’s g ow h ajec o y.
Fu he mo e, he s udy e eals he sub le linkages be ween emi ances and o he soci-
oeconomic indica o s, e ealing hei s ong and signi ican impac on one ano he .
This de ailed analysis no only con ibu es o he academic con e sa ion on emi an-
ces, bu i also ecommends policymake s o ocus mo e on policies ha encou age he
diaspo a o con ibu e o he coun y’s de elopmen . In his sense, he go e nmen
should de ise no el s a egies o cap u e he diaspo a’s unds. The s udy emphasizes
he need o aking p oac i e e o s o p omo e and exploi emi ance in lows o
Tanzania’s long- e m socioeconomic g ow h.
ARTICLE HISTORY
Recei ed 25 Decembe 2023
Re ised 15 Ma ch 2024
Accep ed 13 Ap il 2024
KEYWORDS
Remi ances in lows;
economic g ow h; Fou ie ;
Tanzania
REVIEWING EDITOR
Yamini Sha ma, Re iewe
Selec ion Edi o , Taylo and
F ancis, India
SUBJECTS
Economics; Finance;
Business, Managemen and
Accoun ing
1. In oduc ion
Remi ances (REMs), o money ans e s o mig an s’home coun ies, ha e inc eased signi ican ly due o
he signi ican g ow h in wo ldwide mig a ion in ecen decades. Acco ding o Wo ld Bank (WB) da a
om 2023, REMs a e inc easing globally when only o mally documen ed ans e s a e conside ed. In
pa icula , REMs o Sou h Asia inc eased by 7.2% in 2023 o a signi ican $189 billion; howe e , his
CONTACT Hellena Mohamedy Mushi [email p o ec ed] Mbeya Campus College, Mzumbe Uni e si y, P. O. Box 6559, Mbeya,
Tanzania
ß2024 The Au ho (s). Published by In o ma UK Limi ed, ading as Taylo & F ancis G oup
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. The e ms on which his a icle has been
published allow he pos ing o he Accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
COGENT ECONOMICS & FINANCE
2024, VOL. 12, NO. 1, 2345298
h ps://doi.o g/10.1080/23322039.2024.2345298
de elopmen end appea ed o be le eling o om he nea ly 12% inc ease eco ded in 2022. REM
lows we e p ojec ed o ha e climbed by almos 1.9% in 2023, o aling $54 billion, o Sub-Saha an
A ica. Acco ding o p ojec ions, REM lows o he a ea a e expec ed o ise by an addi ional 2.5% in
2024. An o e all imp o emen in REM lows is p edic ed o he same yea , 2024, wi h a p ojec ed ise
o 2.1%, mos ly due o an an icipa ed e e sal in lows o Egyp .
Rega ding La in Ame ica and he Ca ibbean, REM lows a e an icipa ed o inc ease by 8% and each
$156 billion by 2023. A 3% ise in REMs o Eas Asia and he Paci ic, o aling $133 billion, is an icipa ed
in 2023. I is p ojec ed ha REMs o low- and middle-income coun ies (LMICs) will o al $669 billion in
2023. The dynamic cha ac e o REM pa e ns is highligh ed by hese numbe s, which show di e ences
in egional economic condi ions and he global mig a ion inc ease.
Hence, he nexus be ween mig an REMs and economic g ow h (Eg ow) has been a subjec o sub-
s an ial and pe sis en in e es . Ne e heless, bo h heo e ical and empi ical in es iga ions ha e yielded
con lic ing conclusions, p e en ing he es ablishmen o a consensus on he impac o his ela ionship.
Schola s, such as Ali Ba e e al. (2022) and Tchekoumi and Nya (2023) asse a posi i e in luence o REMs
on EG ow, a ibu ing his posi i e coe icien o s able policy en i onmen s. Rehman and Hysa (2021),
employing inancial de elopmen as a eg esso , also disco e ed a posi i e co ela ion be ween REMs
and EG ow. In a dis inc ein, Abdulai (2023) sugges s ha he impac o REMs on EG ow is mo e p o-
nounced in Ghana. P empeh e al. (2023) es ablish ha REMs condi ionally os e g ow h in na ions
boas ing de eloped inancial sys ems and obus ins i u ional en i onmen s, ocusing on Ghana. Makina
(2024) ound a posi i e ela ionship be ween household consump ion and REM in Leso ho, which po -
ayed ha he mo e REM ecei ed, he lowe he household consump ion. A simila s udy conduc ed
by Nik
si
c Radi
c e al. (2023) in bibliome ic ound ha i depends on he income le el o a ce ain coun-
y; REM also in luences posi i ely EG ow. Saani e al. (2023) employed he ARDL me hod in da a analysis
and ound ha REM inc eases emale unemploymen in Ghana. O he schola s who ound posi i e
impac s on REM and EG ow we e (Aslam e al., 2023 Ba ka e al., 2023 Chen e al., 2023; Golde e al.,
2023; Khan, 2023; Su adha , 2020). The syn hesis o hese indings highligh s he complexi y o he
REM-EG ow ela ionship, wi h con ex ual ac o s, such as policy s abili y, inancial de elopmen and ins i-
u ional s eng h playing c ucial oles. Consequen ly, he conclusion o he au ho s should acknowledge
he di e si y o ou comes and call o nuanced conside a ions o speci ic coun y con ex s and he in e -
play o a ious ac o s in unde s anding he ami ica ions o REMs on EG ow.
Con e sely, Baj a (2021) and Al-Malki e al. (2022) p esen indings indica ing a nega i e associa ion
be ween REMs and EG ow. They a gue ha REMs signi ican ly diminish he labo e o o ecipien
households. Howe e , his s udy aces c i icism o no conside ing he endogenous na u e o REMs, as
Saani e al. (2023) poin ed ou . Simila ly, O o i e al. (2023) disco e ed a nega i e impac o REMs on
EG ow. Addi ionally, Alsama a and M abe (2023) con end ha he in lux o REMs can lead o a eal
app ecia ion o he exchange a e (EXCHR), nega i ely a ec ing expo s and po en ially educing ade
openness, he eby impeding o e all EG ow. Cazache ici e al. (2020) ound ha REM does no in luence
A ican EG ow while conduc ing a me a-analysis s udy. To con ibu e o he ongoing deba e, his a icle
sugges s an empi ical examina ion o he ac ual impac o REMs on EG ow. This is in line wi h Padhan
e al. (2023), who posi a non-linea ela ionship be ween hese a iables, and Gapen e al. (2009), who
p opose no posi i e impac be ween wo ke s’REM and EG ow.
This s udy aims o con ibu e signi ican ly o he empi ical li e a u e on he connec ion be ween
mig an REMs and EG ow. P e ious empi ical esea ch has indica ed an unce ain o con lic ing ela ion-
ship and se e al ac o s may explain hese di e gen esul s. One ac o is he omission o ce ain a ia-
bles in he selec ion p ocess (Adugna Chomen e al., 2023). Addi ionally, he b oad scope o s udies ha
amalgama e di e se coun ies wi hou conside ing hei speci ic cha ac e is ics may con ibu e o incon-
sis en indings (Ma uze iciu e & Bu kus, 2016). Such s udies o en o e look obus ness es s ha could
highligh he in luence o sub- egional membe ship, o ins ance.
Mo eo e , he e is me i in concen a ing on one, gi en ha such a goal necessi a es no only a uni-
o m policy bu also a poli ically and economically s able ins i u ion. Las ly, he economic heo y on
EG ow is ou da ed, leading empi ical s udies o e lec he gaps in his heo e ical amewo k. To add ess
hese issues, his esea ch del es in o he Fou ie S a iona i y Tes o he ela ionship be ween mig an
REMs and EG ow in Tanzania. Fu he mo e, his s udy op s o a sample o one coun y, Tanzania,
2 H. M. MUSHI
co e ing he pe iod om 1990 o 2022. The indings o his esea ch indica e a posi i e signi ican ela-
ionship be ween mig an REMs and EG ow in Tanzania.
The s uc u e o his a icle is o ganized as ollows: Sec ion 2 p o ides a li e a u e e iew, Sec ion 3
ou lines he me hodological amewo k, Sec ion 4 p esen s and discusses he esul s and inally, Sec ion
5concludes he s udy.
2. Li e a u e e iew
Gi en he impo ance o REMs in in e na ional mig a ion, assessing hei impac on economic dynamics
wi hin Tanzania is c i ical. One impo an s a egy is examining how REMs a ec he ecipien coun y’s
EG ow. The ques ion emains: can REMs sol e Tanzania’s longs anding p oblem o low EG ow? Exis ing
li e a u e o e s a ious opinions on how REMs in luence ecipien coun ies’EG ow. On he one hand,
some academics, such as Fleming e al. (2017), Ge ish e al. (2020), Islam (2022), Ma uze iciu e and
Bu kus (2016), Nik
si
c Radi
c e al. (2023), O o i and G echyna (2021) and Zah a e al. (2007) claim ha
mig an REMs boos g ow h in ecei ing economies. Resea che s, such as Umai e al. (2023), Su adha
(2020), Tchekoumi and Nya (2023), Adugna Chomen e al. (2023) and Abdulai (2023), on he o he hand,
emphasize he nega i e consequences o REMs, claiming ha hey do no lead o posi i e EG ow due o
a nega i e co ela ion be ween he wo a iables. Acco ding o hem, he e is no link be ween REMs
and EG ow in hese coun ies. The a ailable heo e ical li e a u e de ailing he many mechanisms ia
which REMs in luence EG ow in luences hese con adic o y empi ical indings abou he g ow h e ec s
o REMs o some ex en .
Two main schools o hough ha e o med wi hin he la ge body o li e a u e ega ding he g ow h
e ec s o REMs: he mig a ion pessimis s and he mig a ion op imis s. The mig a ion pessimis s a gue
ha REMs ei he ha e no e ec on EG ow o ha e nega i e g ow h e ec s. In con as , mig a ion op i-
mis s p esen a gumen s in a o o he posi i e g ow h e ec s o REMs, highligh ing indi ec g ow h
pa hways h ough economic channels, such as inc eased sa ings, in es men (INV) capi al, human capi al
INVs, addi ional employmen and he b oade mul iplie e ec s o consump ion on agg ega e demand
and ou pu . They con end ha con a y o he mig a ion op imis s’claims, REMs a e ypically used o
consump ion a he han p o i able INVs. Bo h schools o hough gi e opposing e idence add essing
he g ow h e ec s o REMs h ough simila pa hways, including consump ion, human capi al INV and
labou supply. Gi en he dispu ed cha ac e o he ma e ial, eaching a i m judgmen abou he g ow h
e ec s o REMs in Tanzania is di icul (Magai, 2020). As a esul , i is c i ical o in es iga e he g ow h
e ec s o REMs and answe he ollowing esea ch ques ion: How do REMs impac he EG ow o ecei -
ing coun ies like Tanzania?
The p ima y mo i a ion o concen a ing on he e ec s o REM in lows on social and economic
de elopmen in Tanzania is he dea h o empi ical knowledge and p ac i ione unde s anding ega ding
he ela ionship be ween REMs and economic de elopmen , inconsis en indings om ea lie esea ch
and low-le el eco ds o emig an in lows in o Tanzania due o da a sho ages. Fu he mo e, he e a e a
ew published s udies and da a ega ding he e ec o REM in lows on Tanzania’s social and economic
de elopmen . The jou nal a icle’s weak me hodology, absence o mul i a ia e analysis and spa se use o
he Fou ie in p io esea ch on he impac o REM in lows on social and economic de elopmen in
Tanzania a e all excuses. Bu he Fou ie Causali y es has been applied in di e en con ex s by nume -
ous ea lie s udies (Aydin & Boza li, 2023; Da id e al., 2023; Genc¸ e al., 2022; Qam uzzaman, 2023). The
subsequen pa ag aphs add ess a mo e ho ough examina ion o hese a gumen s.
Cu en ly, no s udy has conside ed e e y ac o ha was chosen (go e nmen expendi u e [GOVEXP],
EXCHRs, popula ion g ow h [POP G ow], INV, REMs and EG ow). This b ings up he main opic o his
jou nal a icle, which is whe he hese elemen s comp ehensi ely impac Tanzania’s EG ow abou REMs
wi hin a single esea ch amewo k. In gene al, he majo i y o s udies ha e ocused on EG ow as he
dependen (Adebayo e al., 2023; Adugna Chomen e al., 2023; Gene ie e e al., 2023; Khan, 2023;
Mamun & Kabi , 2023; O o i e al., 2023; Padhan e al., 2023; Tabash e al., 2023; Tchekoumi & Nya, 2023;
Umai e al., 2023). Fu he mo e, he e is no much esea ch ha has ocused on o s udied REM in
Tanzania (Eghan, 2022; Hansen, 2010,2012; Iso o & K aybill, 2017; Magai, 2020; Musakwa & Odhiambo,
2022; Po e , 1980).
COGENT ECONOMICS & FINANCE 3
Addi ionally, ea lie esea ch in his ield was ca ied ou in Sou h Asia (Islam, 2022), C oa ia (Depken
e al., 2021), he UE coun ies (Golde e al., 2023; Mamun & Kabi , 2023; Soa a e al., 2020), Asia (Tabash
e al., 2023), Mexico, Indonesia, Nige ia and Tu key (Odugbesan e al., 2021), A ica (Gene ie e e al.,
2023), O ganiza ion o Islamic Coope a ion (OIC) membe (Kamalu e al., 2022), CEMAC zone (Tchekoumi
& Nya, 2023), Pakis an (Abdu alie & Bus illo, 2020; Mazhe e al., 2020) S i-Lanka (Aslam e al., 2023),
India (Jaya aman & Makun, 2022; Khan, 2023), Bangladesh, India, Pakis an and S i Lanka (Su adha ,
2020), Sub- Saha an A ica (Adugna Chomen e al., 2023; O o i & G echyna, 2021), Guyana (Kuma , 2013),
Gul Coope a ion Council (GCC) egion (Al-Malki e al., 2022; Alsama a & M abe , 2023). The e o e, his
s udy is imely and app op ia e o he leas de eloping na ions like Tanzania.
Few s udies ha e looked a he ac o s in luencing EG ow h ough REM in lows in de eloping na ions
(Ba ka e al., 2023; Chen e al., 2023; Djeunankan e al., 2023; Eggoh e al., 2019), while he majo i y o
p e ious s udies examined ac o s like EG ow, REM, INV, POP G ow, EXCHR and GOVEXP ha in luence
EG ow h ough REM in lows in de eloped and de eloping coun ies (e.g. GCC Region, Bangladesh, S i-
Lanka, India and Pakis an,). Addi ionally, s udies ha included EXCHR (Gene ie e e al., 2023; Magai,
2020), popula ion-g ow h and GOVEXP (Gene ie e e al., 2023), GOVEXP, in la ion (INFL) and POP G ow
(Ib ahim, 2022), INV (Ge ish e al., 2020; Kamalu e al., 2022).
Simila o his, he e EG ow h ough REM in lows. These ac o s include inancial de elopmen
(Chiwi a, 2023; O o i e al., 2023; Sidi & Meky, 2023) ou ism, o eign di ec INV (FDI) (Epaph a, 2016;
Mwakabungu & Kauangal, 2023; Tabash e al., 2023; Waqas & Awan, 2023), enewable ene gy (Aydin &
Boza li, 2023) ex e nal deb (Jilenga e al., 2016; Kasidi & Said, 2013), ou wa d FDI (Osa umwense & Igo ,
2023), echnological ans e (Osa umwense & Igo , 2023), indus ializa ion (Lugina e al., 2022), na u al
esou ce (O o i & G echyna, 2021), ag icul u e (Epaph a & Mwakalasya, 2017; Lawal, 2022), ou ism
(Odhiambo, 2011), po e y (Musakwa & Odhiambo, 2022), ade openness (Asamoah e al., 2019), isk
(Lumbila, 2016), inno a ion (M a & Belaz eg, 2021), REM ou lows (Al-Malki e al., 2022), expo s (Ahmad
e al., 2018) and digi al inancial inclusion (Chinoda & Kapingu a, 2023).
Ne e heless, he e idence is inconsis en ega ding he o he ac o s inancial de elopmen , ou ism,
FDI, enewable ene gy, echnological ans e and na u al esou ces can a ec EG ow h ough REM
in lows (Aydin & Boza li, 2023; Chiwi a, 2023; Depken e al., 2021; Epaph a, 2016; Gapen e al., 2009;
Ib ahim, 2022; Mwakabungu & Kauangal, 2023; Nik
si
c Radi
c e al., 2023; O o i e al., 2023; Salahuddin &
Gow, 2015; Sidi & Meky, 2023; Tabash e al., 2023; Waqas & Awan, 2023). Addi ional ac o s, such as ou -
wa d FDI, ex e nal deb , po e y, ade openness, isk, expo s and digi al inancial inclusion, ha e also
been ound o a ec EG ow h ough REM (Ahmad e al., 2018; Asamoah e al., 2019; Chinoda &
Kapingu a, 2023; Jilenga e al., 2016; Kasidi & Said, 2013; Lumbila, 2016; M a & Belaz eg, 2021; Musakwa
& Odhiambo, 2022; Osa umwense & Igo , 2023). Fu he mo e, mos o hese s udies ha e been con-
duc ed in o he na ions and ad anced economies.
Addi ionally, he esul s o s udies on he ac o s in luencing EG ow h ough REM in lows could be mo e
consis en . Fo example, some s udies a e ound o be posi i ely signi ican (Abdulai, 2023; Abdu alie &
Bus illo, 2020; Adugna Chomen e al., 2023; Aslam e al., 2023; Fleming e al., 2017; Gene ie e e al., 2023;
Ge ish e al., 2020; Golde e al., 2023; Iso o & K aybill, 2017; Khan, 2023; Magai, 2020; Mamun & Kabi ,
2023; Musakwa & Odhiambo, 2022; Odugbesan e al., 2021; Pep ah e al., 2019; Tchekoumi & Nya, 2023)
and nega i ely signi ican in o he (Cazache ici e al., 2020; Depken e al., 2021; Eggoh e al., 2019; Eghan,
2022; Islam, 2022; Jaya aman & Makun, 2022; O o i e al., 2023; O o i & G echyna, 2021; Soa a e al., 2020;
Su adha , 2020). Mo e s udies ha e been made possible because he ea lie s udies had inconsis en
esul s, some good and some nega i e and some ha showed no associa ion.
Fu he mo e, empi ical s udies ha e no examined he easons behind Tanzania’s low REM eco d le el
(Magai, 2020). Nei he esea ch has p o ided e idence o he a ionale behind Tanzania’s low REM eco d
le el, which led o he ocus o his jou nal a icle on de e mining whe he hese ac o s in luence EG ow
h ough REM in lows in Tanzania holis ically in one esea ch amewo k h ough he Fou ie S a iona i y es .
Fu he mo e, he Fou ie Model mus be u ilized mo e when in luencing EG ow h ough REM in lows
(Da id e al., 2023; Gene ie e e al., 2023). Howe e , only a small numbe o ea lie s udies in o he
ields, including ca bon emissions (Genc¸ e al., 2022), e ugees and enewable ene gy (Aydin & Boza li,
2023) and economic policy (Qam uzzaman, 2023). The e o e, using his Fou ie s a iona i y es in
Tanzania’s EG ow h ough REM in lows is impo an .
4 H. M. MUSHI
Figu e 1 shows he ends and a ia ions in hese h ee ypes o in lows o e he speci ied yea s, p o-
iding aluable in o ma ion abou Tanzania’s economic ela ionships wi h bo h i s diaspo a and o eign
en i ies. Figu e 1 shows a consis en upwa d end in REM lows o Tanzania. Since 1990, REMs ha e
s eadily inc eased, showcasing a g owing in lux o unds om Tanzanians li ing ab oad o hei home
coun y. No ably, he igu es demons a e ha REM lows ha e expanded o he ex en ha hey now
exceed he o icial de elopmen assis ance (ODA) ecei ed by Tanzania. This sugges s a signi ican eco-
nomic impac om REMs, su passing he adi ional inancial aid p o ided h ough ODA. The consis en
ise in REM lows showcases he impo ance o hese con ibu ions o Tanzania’s economy, unde lining
hei ole in he coun y’s inancial landscape.
Figu e 2 ep esen s g aphical ep esen a ion o da a se in Tanzania.
Based on he a o emen ioned examina ion, i is e iden ha nume ous pieces o e iewed li e a u e
s ill need o o e a de ini i e conclusion ega ding he p ecise impac o REM in lows on he EG ow o
na ions. Fu he mo e, he in luence o REMs on g ow h a ies ac oss di e en coun ies, making i
inapp op ia e o gene alize indings om such s udies. Hence, i is necessa y o unde ake a s udy ocus-
ing on Tanzania as a case s udy o p o ide mo e con ex -speci ic insigh s.
3. Resea ch me hodology
This s udy’s objec i e was o pe o m ho ough empi ical esea ch o cla i y Tanzania’s ela ionship
be ween EG ow and REM in low om 1990 o 2022. The WB, In e na ional Mone a y Fund (IMF) and
Figu e 1. Remi ances, o eign di ec in es men and o icial de elopmen assis ance in lows o Tanzania. Sou ce: IMF,
Wo ld Economic Ou look, Oc obe 2023.
Figu e 2. G aphical ep esen a ion o da a se .
COGENT ECONOMICS & FINANCE 5
Wo ld Economic Ou look (WEO) 2023 p o ided he s a is ics. We sough o iden i y pa e ns, ends and
possible causal ela ionships be ween Tanzania’s o e all EG ow and REM in lows by analyzing his ela-
ionship o e a sizable pe iod. The es o Fou ie s a iona i y was employed. S a a was used o examine
he da a. I i s speci y a simple double log-linea Cobb-Douglass p oduc ion unc ion as:
lnGDP ¼aþb1lnREM þb2ln INV þb3ln EXCH R þb4ln INFL
þb5ln GOVEXP þb6ln POP GROW þe (1)
4. P esen a ions and discussions o he esul s
Table 1 shows EG ow: measu ing uni : Pe cen age (%) EG ow is ep esen ed as a pe cen age o he
G oss Domes ic P oduc (GDP), indica ing he a e a which he economy has expanded. REM: measu ing
uni : US Dolla s (US$). REM is measu ed in he cu en alue o US dolla s, ep esen ing he unds ans-
e ed om indi iduals wo king ab oad o hei home coun y. INV: measu ing uni : Local Cu ency (e.g.
Tanzanian Shillings [TZS]). INV is measu ed in he cu en alue o he local cu ency, e lec ing he
amoun o money in es ed wi hin he coun y. POP G ow: measu ing uni : Pe cen age (%) POP G ow is
ep esen ed as a pe cen age, illus a ing he annual g ow h a e o he popula ion. EXCHR: Measu ing
uni : US Dolla s (US$). The EXCHR is ep esen ed in US dolla s, showing he alue o he local cu ency
compa ed o he US dolla . GOVEXP: measu ing uni : Pe cen age (%). GOVEXP is a pe cen age o he
GDP, indica ing he po ion o he GDP spen by he go e nmen . INFL: uni o measu emen :
Pe cen age (%): The annual a e a which he a e age le el o p ices o goods and se ices is ising and,
as a esul , he pu chasing powe o cu ency is declining, known as INFL.
Table 2 shows desc ip i e s a is ics ha o e a comp ehensi e o e iew o he dis ibu ion’s cen al
endency, dispe sion and shape ac oss se en a iables: REM, E_GROW, EXCH_R, GOV_EXP, INFL, INV and
POP_GROW. This ela i ely low igu e in Table 2 indica es ha REMs con ibu e ma ginally o he coun-
y’s g ow h e en in he ecen high emig a ion a es.
4.1. Uni - oo es esul s
Se e al economic a iables we e es ed o s a iona i y using a Fishe - ype uni - oo es . Fo each a iable
unde a ious es ci cums ances, including in e se chi-squa ed (24), in e se no mal Z, in e se logi (64),
Land modi ied in e se chi-squa ed Pm, he able displays he es s a is ics and associa ed p alues.
Table 1. Va iables and measu ing uni s.
S . No Va iable names Abb e ia ions Measu ing uni
1 Economic g ow h EG ow As % o GDP
2 Remi ance REM In cu en US$
3 In es men INV In he cu en local cu ency
4 Popula ion g ow h POP G ow As annual %
5 Exchange a e EXCHR In cu en US$
6 Go e nmen expendi u e GOVEXP As % o GDP
7 In la ion INFL As annual %
Table 2. Desc ip i e s a is ics.
REM E_GROW EXCH_R GOV_EXP INFL INV POP_GROW
Mean 1403586 10117.17 8.470821 0.076857 0.080459 0.214727 0.019832
Median 728727 9669.877 8.231263 0.069486 0.046351 0.221917 0.019501
Maximum 5101953 14728.74 17.18832 0.137748 0.272069 0.282174 0.027416
Minimum −225686.1 6947.593 1.338334 0.053247 0.022109 0.117051 0.011875
S d. De . 1414594 2675.284 4.555838 0.024625 0.065084 0.043622 0.002697
Skewness 0.522076 0.353778 0.27748 1.312863 1.286504 −0.405934 0.065167
Ku osis 2.053411 1.624953 1.970881 3.626357 3.464129 2.131054 4.233944
Ja que-Be a 32.77372 39.45793 22.5566 120.2316 112.7905 23.33423 25.40347
P obabili y 0 0 0.000013 0 0 0.000009 0.000003
Sum 5.56E þ08 4006398 3354.445 30.43535 31.86188 85.03192 7.853665
Sum Sq. De . 7.90E þ14 2.83E þ09 8198.487 0.239528 1.673215 0.751629 0.002873
Obse a ions 396 396 396 396 396 396 396
No e. REM: emi ance; Eg ow: economic g ow h; EXCHR: exchange a e; GOVEXP: go e nmen expendi u e; INFL: in la ion; INV: in es men ;
POP G ow: popula ion g ow h a e
6 H. M. MUSHI
Table 3 esul s indica e ha o a iables, such as REM, economic g ow h (E_GROW), INFL and popula-
ion g ow h a e (POP_GROW), he null hypo hesis o a uni oo is ejec ed, sugges ing s a iona i y.
Con e sely, a iables like exchange a e (EXCH_R), go e nmen expendi u e (GOV_EXP) and INV do no
p o ide su icien e idence o ejec he null hypo hesis, implying po en ial non-s a iona i y in hese cases.
4.2. Coin eg a ion es
Panel coin eg a ion es esul s: Table 4 p esen s he esul s o he x coin es o panel coin eg a ion
among REM, E_GROW (economic g ow h), EXCH_R (exchange a e), GOV_EXP (go e nmen expendi u e),
INFL, INV and POP_GROW (popula ion g ow h a e). The panel coin eg a ion es s employ a ious
Dickey–Fulle and Augmen ed Dickey–Fulle s a is ics. This is indica ed in Table 4:
Table 4 ep esen s esul s ha collec i ely sugges signi ican e idence in a o o panel coin eg a ion
among he conside ed economic a iables.
4.3. Dynamic o dina y leas squa es (DOLS) panel da a es ima ion
The associa ions be ween he a iables INV, POP_GROW (popula ion g ow h), GOV_EXP (go e nmen
expendi u e), INFL and E_GROW (economic g ow h) we e e alua ed using he dynamic o dina y leas
squa es (DOLS) panel da a es ima e echnique shown in Table 5:
In Table 5, he esul s sugges ha INV, POP G ow, GOVEXP, INFL and EG ow a e s a is ically signi i-
can p edic o s in he model.
4.4. Fully modi ied OLS (FMOLS) panel da a es ima ion
The ully modi ied OLS (FMOLS) panel da a es ima ion was pe o med o examine he ela ionships
be ween he a iables INV, EXCH_R (exchange a e), POP_GROW (popula ion g ow h), GOV_EXP (go e n-
men expendi u e), INFL and E_GROW (economic g ow h). This is ep esen ed in Table 6:
Table 3. Fishe - ype uni - oo es .
Va iable In e se chi-squa ed (24) In e se no mal ZIn e se logi (64) LModi ied in . chi-squa ed Pm
S a is ic pValue S a is ic pValue S a is ic pValue S a is ic pValue
REM 3.2582 1.0000 4.0297 1.0000 3.8104 0.9998 −2.9938 0.9986
E_GROW 0.0249 1.0000 10.6671 1.0000 13.2264 1.0000 −3.4605 0.9997
EXCH_R 15.2294 0.9139 0.3083 0.6211 0.2757 0.6082 −1.2659 0.8972
GOV_EXP 25.2762 0.3909 −1.2888 0.0987 −1.1575 0.1257 0.1842 0.4269
INFL 63.0172 0.0000 −5.0269 0.0000 −4.9011 0.0000 5.6316 0.0000
INV 8.9190 0.9978 1.7505 0.9600 1.5756 0.9400 −2.1768 0.9853
POP_GROW 70.5215 0.0000 −5.5982 0.0000 −5.5513 0.0000 6.7148 0.0000
No e. REM: emi ance; Eg ow: economic g ow h; EXCHR: exchange a e; GOVEXP: go e nmen expendi u e; INFL: in la ion; INV: in es men ;
POP G ow: popula ion g ow h a e
Table 4. x coin es Kao REM, E_GROW, EXCH_R, GOV_EXP, INFL, INV and POP_GROW.
S a is ic pValue
Modi ied Dickey–Fulle −14.6693 0.0000
Dickey–Fulle −7.5046 0.0000
Augmen ed Dickey–Fulle −6.9432 0.0000
Unadjus ed modi ied Dickey–Fulle −17.1643 0.0000
Unadjus ed Dickey–Fulle −7.8089 0.0000
Table 5. x dolshm.
Coe icien S d. e zp>z[95% con In e al]
INV −5961980 973,558.7 −6.12 0.000 −7,870,120 −4,053,840
POP_GROW 4.28e þ07 7,036,243 6.08 0.000 2.90e þ07 5.66e þ07
GOV_EXP −4.92e þ07 1,215,587 −40.45 0.000 −5.15e þ07 −4.68e þ07
INFL 2.18e þ07 424,541.7 51.25 0.000 2.09e þ07 2.26e þ07
E_GROW 616.6234 23.31031 26.45 0.000 0. 570.936 662.3107
COGENT ECONOMICS & FINANCE 7
