Contributions of East African Common Market Protocol to Economic Growth: The Case of Tanzania, 2010 - 2017

The purpose of the study was to examine the contributions of the East Africa Community Common Market Protocol to Tanzania’s economic growth. The study was guided bythree objectives, namely; toevaluate contributions of intra-EAC trade liberalization to Tanzania’s economy,to find out the contribution of the movement of labor and persons to Tanzania’s economy, andto examine the contribution of the movement of capital to the economic growth of Tanzania.A descriptive research design was used for examining and portraying an accurate or precise profile of Tanzania’s economic development, the EAC CMP especially the four freedoms and most importantly how each of the four freedoms have in particular affected Tanzania’s economic growth. This study was essentially a qualitative desktop review. The study relied exclusively on secondary data. The researcher utilized a background approach (or historical technique) for collecting data from qualitative or secondary sources of information. A combination of thematic (implying theme) and content analysis techniques of qualitative data analysis was used in this study. This study found that the EAC CMP by encouraging intra-EAC trade liberalization has contributed to the economic growth of Tanzania. It has found that since the entry into force of the EAC CMP, Tanzania intra-EAC trade has increased constantly and has surpassed the total trade value that the country had realized prior to the establishment of the EAC CMP. The study has found that the intra-EAC free movement of people and labor facilitated economic growth for Tanzania. The free movement of labor has contributed to Tanzania's economic development through various ways especially skills transfer; addressing skills challenges in some key sectors in the country's economy as well as information exchange, and foreign remittance inflows. The study found that the EAC CMP through free movement of capital has contributed to the economic growth of Tanzania. It has found that free movement of capital has resulted in significant positive impact on the country's growth in many ways including increase in FDI, Stock market development and bank development. It concludes by arguing that the enhancement or improvement of intra-EAC trade was one of the primary goals of the EAC and EAC CMP. Tanzania has experience an increase in its trade with the rest of the EAC since the introduction of the EAC CMP. Tanzania has continued to be indifferent with the idea of greater integration with the rest of the EAC partner states for several reasons, the main one being that it will expose its citizens and domestic companies to intense competition from partner states. Free movement of capital is essential for economic growth. With free capital inflows, a country can experience not only financial sector, equities market development and FDI increases, but it can also experience poverty reductions, job creation and sector development. The study recommends that the leadership of Tanzania needs to change their indifferent attitude towardsthe EAC CMP and enhance their level of compliance with the protocol in order for Tanzania to harness the benefits of intra-EAC trade. It also recommends thatthat the leadership and policymakers in Tanzania need to reverse Tanzania's immigration policy that affects the EAC immigrants to the country. Further, the leadership needs to take specific steps to encourage capital inflow be it through FDI, remittance or investment in securities at the DSE. The leaderships should most importantly appreciate the link between the EAC CMP-enabled capital inflows and job creation and funding of public budget. This study also recommends that future researchers need to conduct more research on the EAC CMP particularly on its economic growth benefits to partner states.