Impact of Financial Development on Human Development in Tanzania

This study examined the impact of financial development on human development in Tanzania and we adopted Vector error correction Model (VECM) was employed to examine the long run relationship between variables that remains significantly understudied in existing literature using the time series data for the period of 1990-2022 obtained from the World Development Indicators database (WDI) and United Nations Conference on Trade Development (UNCTAD). This study extended on analysis by examining the disaggregated of human development dimensions (income, education, and health) further enhances understanding of how financial depth and stability influence different facets of human welfare. We found satisfactory evidence that there is a positive and statistically significant relationship between financial development and human development in Tanzania. Based on the findings, this study recommends that the United Republic of Tanzania should strengthen its financial institutions and financial innovation lead contribute to more human development for promoting welfare, reduce poverty, and enhance macroeconomic stability.