This study investigates the impact of external debt and Foreign direct investment (FDI) on economic growth in Tanzania using time series data from 1971-2011. The empirical analysis was based on ARDL model and the Bounds test approach of co-integration as advocated by Pesaran et al (2001) to test for long-run equilibrium relationship. The results show that, in the long-run debt promote economic growth in Tanzania. However, foreign direct investment exhibits a negative impact on economic growth. While in the short-run, the results indicate that there is no directional causality either between external debts (PD) and economic growth (RGDP) or between FDI_INFL and economic growth (RGDP).
This paper examines the contribution of foreign direct investment to economic growth through the main sector of economy in 5 Low-Income economies (Burkina Faso, Guinea Bissau, Liberia, Niger and Sierra Leone) and 4 Lower-middle-income economies (Cote d'Ivoire, Ghana, Nigeria and Senegal) of West Africa. Using regression model and the Granger causality test with a panel data for the period 2000-2016, we discovered that on all West Africa's region the FDI's contribution is positive but not significant with an autocorrelation positive. Therefore, by studying the case of each country we note that the majority has positive FDI and few are negative, also le majority of those countries have a negative autocorrelation. Our result show that only primary sector is negative and the secondary and tertiary sector are positive but all are not significant for the whole region but in individual result of the country, it is the tertiary sector which influences more the growth before the primary and secondary sectors.
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