Financial Analysis as a Consideration for Stock Exchange Investment Decisions in Tanzania: Recent Trends | Chapter 10 | Emerging Issues and Development in Economics and Trade Vol. 4

Stock exchange investment in Tanzania is growing fast, and many people of different varieties of income are participating in the purchase of shares commonly known as stock exchange. However, there is seemingly little concern on the use of financial analysis on the part of local individual investors when purchasing the shares. Hence, this chapter presents the findings of the study on financial analysis as a consideration for stock exchange investment decision making in Tanzania. The study was originally conducted for four months from July to October 2006. Perhaps it is true that knowledge is vital in all essence, hence we have amalgamated some resent knowledges to make our book more current and understandable. As it is indicated that this chapter is a study which incorporates six brokers, indeed yes but the current situation has seen an increase of brokers to 13. In that regard, we have talked to them in order to amplify this study, and all have cemented the earlier study, and had few new comments. It adopted a survey study incorporating all thirteen registered brokers in Tanzania located in Dar es Salaam. First, the introduction was given, which provided the essentials and the need for financial statements analysis as far as decisions regarding investment is concerned, after which the literature review was done. This was followed by a presentation of the role of Dares salaam stock exchange. Subsequently, the methodology of the study was given, followed by data analysis and discussion of findings. Finally, conclusions and recommendations were given. The chapter concludes that most of investors in Tanzania do not depend on the financial statements analysis of the firms when investing mainly because most of these investors have not acquired knowledge on the importance of financial statements in making decisions regarding the investment. However, big investors such as financial institutions and firms do consider financial statement analysis when investing. This calls for the people and education institution to verge the training of the students on how it is worthy understanding the use of financial information. This should e done through education provided by the people who work with Dar es salaam Stock Exchange and the affiliated institutions. Colleges must understand that purchasing of stocks and affiliated ventures are worthy and should not be considered as a mere business, it is a real business.

Author (s) Details

Norman A. S King
Department of Business Management, Faculty of Business and Economics, University of Iringa, Tanzania.

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Public Debt and Economic Growth: Evidence from Tanzania | Chapter 08 | Emerging Issues and Development in Economics and Trade Vol. 1

External debts can have either positive or negative effects on the economic growth of country’s economy. If external debts are used for development expenditure then the country may benefit because development expenditure like infrastructure may have a multiplier effect on boosting economic growth. This paper examines the impact of public debt on economic growth in Tanzania for the period 1970 to 2015. The study utilized co-integration and Vector Error Correction Mechanism (VECM) Approach to test the relationship between public debt and economic growth and granger causality test to examine the causal relationship between variable. The unit root tests showed that all variables were integrated after taking the first difference, the Johansen co-integration result showed that the variables were co-integrated. The VECM estimate showed that there is a negative relationship between public debt and economic growth in Tanzania over the study period. In addition, granger causality test revealed that there is no causal relationship between public debt and economic growth. Based on these findings, this study recommended that Government and policy makers should stop the accumulation of external debt stock overtime and prevent concealing of the motive behind external debt; external debts should be used only for productive investment of highest priorities that would help in yielding returns for economic reasons (productive purposes) and not for social or political reasons.

Author(s) Details

Dr. Salama Yusuf
Department of Finance, Faculty of Business Administration, Zanzibar University, Tanzania.

Aziza Omar Said
Ministry of Trade and Industry, Zanzibar, Tanzania.

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