Fdi In Tanzania Essay

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The aim of this study was to find out which factors motivate FDI inflows in Tanzania, and how each of the factors affected FDI. The objective was to be met by conducting multiple regression analysis with the annual growth rate of change in FDI inflows into Tanzania as the dependent variable while availability of natural resources, labor cost, GDP growth rates and political climate as independent variables and inflation rates and exchange rate as a control variable.
For this purpose, secondary data for 1995 to 2015 were collected and analyzed. The study found that other than GDP and inflation rate, all other four factors seems to be the potential motives of FDI inflow in the country. The insignificant of GDP indicates that there is a less impact
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Also the country’s investment authorities, organizations and agencies should enhance investment promotion campaign. This will ensure that Tanzania attracts high-quality Foreign Direct Investment portfolio that would lead to meaningful economic and social development in the country.
5.2 Limitation of the study
The study, like any other had limitations, whereby the findings are limited in the explanation of the factors motivating the inflows of FDI into Tanzania due to the following reasons. First the study focused on only six factors motivating FDI. The factors are availability of natural resources, exchange rates, labor cost, political climate, inflation and GDP growth rates. This limited the strength of the study since all other factors are not part of the six were not considered yet it is possible they have a strong impact on the inflows of FDI into Tanzania.
Secondly, the study focused on Tanzania only and for a period of 20 years. It is not known how the results would have turned out if the study was extended to other countries, say, in East Africa, in the whole of Africa or in the Sub-Saharan Africa. The study does not provide an explanation of what the situation might be like after

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