Sustainable Economic Growth and Employment Opportunities in Tanzania: Evaluating Progress Toward Achieving SDG 8 Targets

Abstract

Tanzania’s moderate GDP growth over the past decade has not effectively translated into sustained improvements in per capita income and productive employment, challenging the achievement of Sustainable Development Goal (SDG) 8. This study aims to evaluate Tanzania’s progress toward SDG 8 by examining the influence of GDP growth rate and employment-to-population ratio on sustained per capita GDP growth from 2014 to 2023. Using a quantitative time-series design, secondary macroeconomic data from reputable sources such as the World Bank, WDI, UNDP, and Tanzania National Bureau of Statistics were analyzed to ensure data validity and comprehensiveness. Econometric methods including Augmented Dickey-Fuller tests for stationarity, Johansen cointegration for long-run relationships, Vector Error Correction Models for dynamic analysis, and Ordinary Least Squares regression for impact assessment were applied to capture both short- and long-term effects. Results show an average GDP growth rate of 5.69%, employment ratio of 82.38%, and per capita GDP growth of 1.95%. A strong positive correlation between GDP growth and per capita income (r = 0.98, p < 0.01) was observed, while employment ratio showed a positive but statistically insignificant effect on GDP growth (β = 0.12, p = 0.165). The study concludes that improving per capita income is essential for sustained economic growth. It recommends prioritizing labor market formalization, investing in human capital, promoting economic diversification, supporting structural reforms and innovation, and strengthening data collection and monitoring systems to accelerate Tanzania’s progress toward SDG 8.1.