Does population growth have any impact on economic growth?: Evidence from Tanzania.

Abstract

Effects of population growth on economic growth in Tanzania is presented to two specific objectives notably the direction and relative influence of population growth on economic growth and the existence of long-run relationship between population growth and economic growth are examined. Annual time series data from 1980 to 2019 together with Autoregressive distributed lag model which ascertain the direction and relative influence of population growth on economic growth are used. Granger causality test to ascertain the causality between population growth and economic growth is observed. Co-integration test to determine the existence of long-run relationship between population growth and economic growth is applied. Findings reveals that population growth, gross capital formation, government expenditure, total fertility rate, life expectancy, dependency ratio, and foreign direct investment net inflow have negative impact towards economic growth while trade openness has a positive impact towards economic growth. This paper shows that there is a negative relationship between population growth and economic growth in Tanzania. Therefore, though population growth has a negative relationship on economic growth the analysis recommends that, if population growth is well managed it can give positive outcomes towards economic growth. The government should be advised to emphasize on family planning policy towards population growth management. Trade openness has a positive impact towards economic growth hence this paper recommends that its advancement by opening up doors inside and outside the country will increase the accessibility of goods and services providing efficiency in the allocation of resources. Trade openness also improves foreign direct investment through the transfer of new technology.