An empirical analysis of the nexus between agriculture, employment, and economic growth in Tanzania

This study examines the nexus between agriculture, employment, and economic growth in Tanzania, focusing on both the short and long run. For developing countries like Tanzania, agriculture is a crucial sector of the economy, employing approximately 70% of Tanzania's workforce and accounts for more than 25% of the country's GDP. However, there is a limited understanding of the joint connection of agriculture, employment, and economic growth in Tanzania. To address this gap, the study analyzes this nexus from 1991 to 2021, using the autoregressive distributed lag (ARDL) model and the Granger causality approach. The findings reveal the presence of a long-run cointegration among the variables of this study. The Granger causality results show a unidirectional causal relationship running from economic growth to agriculture in both the short and long run. Additionally, the short-run results indicate a bi-directional causality between employment and economic growth. However, there is no significant evidence linking agricultural growth to employment and economic growth, suggesting that Tanzania has not yet fully leveraged the potential of its agricultural sector. Therefore, it is recommended that Tanzania implement policies aimed at fostering economic growth and enhancing agriculture to create employment opportunities and promote economic development in the country.