The Effect of Foreign Direct Investment on Poverty Alleviation in East Africa Countries

Abstract

Foreign Direct Investment (FDI) is crucial to support economic development for developed and developing countries. The aim of this paper is to examine the effect of Foreign Direct Investment (FDI) on poverty alleviation in East Africa Countries. The study adopted a time series data research design where by secondary data were used. The population applied on the financial records from 1987/88 - 2017/18 financial years (Annual Data). The sample size of the study was 31 annual observations. Tanzania was purposively sampled to be used as research location of this study. The data collected from various reliable sources which included the National Bureau of Statistics (NBS), Bank of Tanzania (BOT), Tanzania Investment Centre (TIC), World Bank (WB), International Monetary Fund (IMF) and United Nation Conference on Trade Development (UNCTAD). The results of the study revealed that FDI have statistical significant effects on poverty alleviation on East African countries with P- Value 0.008. The study recommends that policy makers in collaboration with the government have to pertain favorable and investment’s friendly strategies as well as commenced essential strategies transformation so as to solve the problems associated with investment sector in East Africa Countries which usually hinder the development and growth of the FDI