Gold Export Analysis and Influence to the Economy of Tanzania: Multiple Regression Analysis

Abstract

The study on gold export analysis and influence to the economy in Tanzania by using multiple regression reveals that Gold export is a significant variable that can help predict the economy in Tanzania given the model GDPGr) = (0.09835533 + 0.0925901DGetRate - 0.6579431 DAgric – 9.667063 DGovt - 0.0403376 DimportGR - 0.2272975MANFCTRV + 0.1802873INDSTRV + 0.754735Govre + 2.177404DResvs – 0.0812509Infl + ε). Shapiro Wilk W test, heteroscedasticity, serial correlation were conducted to validate the model. The study reveals that gold export is positively related with economic growth. This means that as gold export increase also economic growth increases and when gold export decreases also economic growth tend to decrease. The results value of R² is 81.75% which is significant level to explain about our model. This means that variation in economic growth can be influenced by gold export (growth rate), agricultural growth (agriculture value added), government spending, and Import growth rate, manufacturing value added, Industry Value added, Government revenue, Reserve and inflation. Therefore the study recommends that the government must make sure that it keep truck of gold export in order to realize better economic growth in Tanzania as indicated in the regression equation. Government must map all gold production for export strategically to benefit more the local economy. Gold export policies should not compromise with the local economy this means to a larger extent money generated from gold export should be ploughed back to the local economy through increasing agriculture investment and other agricultural inputs for better results of GDP in Tanzania. Gold export value should be reflected in the economy with decreased poverty in Tanzania mainly through assisting farmers who account about 80% of the work force in Tanzania and provide agricultural machines and modern tools. Government must enhance good policies to improve the agricultural sector performance which appear to compromise with the GDP given the trend and the negative coefficient in agriculture sector.

Keywords: Multiple Regression, Gold Export, Agriculture Sector, Economic Growth