The Impact of Port Infrastructure and Economic Growth in Tanzania: Adopting a Structural Equation Modeling Approach

Abstract

Tanzania port sector performs an essential function in the development of the economy and transportation of goods and services. The raised question is, what is the impact level of a seaport infrastructure on the Tanzania economy? To respond to this question, we assess the impact of seaport infrastructure on promoting economic growth in low-income country, Tanzania. A Structural Equation Modeling (SEM) approach employed to analyze the rapport of variables, using statistical data from 2005 to 2017. The results demonstrate a direct relationship between seaport infrastructure and economy. In addition, the relationship between seaport infrastructure and international trade were determined. The results also, shows a significant relation between international trade and economic growth. It is recommended in this study that, seaport infrastructure need to be improved alongside with the international trade so as to maximize its potential in promoting the growth of Tanzania’s economy, because transporting of goods through maritime is cheaper compared to other mode of transportation. Likewise the existing transportation and port policies should be maintained and implemented for improving transport infrastructure for promoting the growth of Tanzanian economy.