THE INFLUENCE OF MARCOECONOMIC VARIABLES ON THE GROWTH OF FISHING SECTOR IN ZANZIBAR

Abstract

Zanzibar has a good potential for foreign investment in offshore marine capture fisheries, in aquaculture and in fisheries infrastructure. There is Deep Sea fishing, under Deep Sea Fishing Authority which is organized and monitored jointly by The Government of United Republic of Tanzania and The Revolutionary Government of Zanzibar for the one side, and for the second side the territorial waters. The study sought to analyses the influence of macroeconomic variables on the growth of fishing sector in Zanzibar. Specific objectives of this study were, to examine the influence of foreign direct investment on the growth of fishing sector in Zanzibar, to evaluate the influence of exchange rate on the growth of fishing sector in Zanzibar and to determine the influence of inflation on the growth of fishing sector in Zanzibar. Kojima Hypothesis, Foreign Exchange Exposure Theory and International Fisher Effect were adopted in this study. This study applied a casual research design. The study collected only secondary data from the National Bureau of Statistics, Bank of Tanzania, Ministry of Agriculture and livestock Tanzania and the World Data Indicators from 1990 to 2020. Data were analyzed using descriptive and inferential statistics with the aid of practical analysis of financial data (STATA) as the research tool for data collected. Findings depicted a medium and negative correlation coefficient was established between fishing sector growth and foreign direct investment. Also, findings of this study revealed a strong and negative relationship was also established between fishing sector growth and exchange rate. Moreover, finding portrayed a strong and positive relationship was established between fishing sector growth and inflation rate. This study recommends that another study be conducted with more independent variables that affect growth of fishing sector in Zanzibar such as domestic transport infrastructure and the macroeconomic environment as these could influence the results obtained from such a similar study.