The Impact of Financial Sector in the Economic Growth of TANZANIA
- The Impact of Financial Sector in the Economic Growth of TANZANIA
- MWAKALOBO, Bwigane
- Issue Date
- KDI School of public policy and management
- This study use annual time series data from World Bank Development indicator from
1988 to 2011 for both banking sector and stock market of Tanzania. Apparently, the study investigate whether measures of financial development which consist of banking sector and stock exchange market can predict future rates of economic growth in Tanzania, and which sector contribute much higher than the other to economic growth.
The study find that banking sector and stock exchange market as measured by domestic credit to private sector and market capitalization is positively and significantly
causes future rates of economic growth. The study also finds that banking sector contributes much higher to economic growth than the stock exchange market in Tanzania. The results are
consistent with the view that stock exchange market and banking sector promote more
efficient resource allocation and future economic growth of the country.
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