Impact of Foreign Aid on Tanzania Economic Growth- Time Series Approach

Abeid Ahmed Ramadhan, Zhi Hong Jian, Yapatake Kossele Thales Pacific

Abstract


This paper analyses the Impact of foreign aid economic growth of Tanzania. The studyusedannual data covering for the period of 1992-2014. Error Correction Model (ECM) was employed to determine the long-run and short-run impact of foreign on economic growth of Tanzania. Moreover, Granger Causality technique was used to examine the relationship between foreign aid and economic growth. The result shows that there is presence of long-run relationship economic growth and explanatory variables associated in the model.  In short-run, we found that foreign aid do not granger cause economic growth. The result advocated that government should seek other forms of foreign aids that is received to promote her economic growth.

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