GOLD MINERAL EXPORTS AND ECONOMIC GROWTH NEXUS IN TANZANIA

Abstract

Mineral exports have varied impact on economic growth among different mineral-rich countries. Some countries with abundant mineral resources have more sluggish economy than that without such resources. This study examined gold mineral exports and economic growth nexus by using time series data extracted from World Bank and Bank of Tanzania for the duration of 22 years from 1999 to 2020. The preliminary checks for unit root test show that economic growth and foreign direct investment are stationary at first difference while gold mineral export is stationary at level and first difference. Using autoregressive distributed lag (ARDL) and error correction model (ECM) estimation technique, the results show that in short run, gold mineral exports have negative insignificant impact on economic growth while economic growth has negative significant effect on gold mineral exports. The results imply that as economic growth improves, the need for domestic uses of gold in jewelry and financial investment increases, hence decreasing gold export magnitude. However, it should be investigated whether such inverse relationship between economic growth and gold exports is caused by an increasing gold smuggling or not.