The Influence of Telecommunication Industry Evolution on Economic Growth in Tanzania.

Abstract

This study looked at how Tanzania's economic growth was affected by the development of telecommunications, particularly the spread of the internet, mobile money services, and smartphone adoption. It was intended to evaluate the short-run and long-run effects of innovations in the telecommunications industry on the growth of gross domestic product (GDP). The study applied a quantitative time series approach utilizing secondary data obtained from the Tanzania Communications Regulatory Authority (TCRA) and the National Bureau of Statistics (NBS) quarterly reports for the period of 2021 to 2024. 3 Background y Using the inflation rate as the control variable, the study applied the Following econometric techniques: Autoregressive Distributed Lag (ARDL) model Error Correction Models (ECMs) and ADF unit root tests employing EViews software to analyze the short run and long run relationships among the variables. Economic growth is positively and significantly influenced by both the urbanization and technological progress. The ECM showed that the industry constantly contributed to the national economy by establishing a long-run equilibrium relationship between the telecommunications variables and economic growth. These findings, emphasizing the role of technology innovation, digital financial inclusion and connectivity in driving sustainable economic performance, are in line with the Endogenous Growth Theory. The study provides evidence that regulators, industry players, and policy makers need to focus on digital infrastructure and adoption strategies for driving economic growth. Politicians are advised to prioritise provision of affordable internet access, expansion of broadband infrastructure, and fostering forward-looking regulatory environments. To facilitate adoption and usage, telecom providers should sponsor digital literacy programs, increase access to affordable smartphones, and develop mobile money infrastructure. Further research should also consider other digital technologies and their macroeconomic impacts in order to inform growth strategies for Tanzania.