Economic effects of Globalization


On economic point of view, globalization as a phenomenon has both positive and negative effects on developing countries like Tanzania. Positive effects


Effective utilization of natural resources

Through trade liberalization and free market economy, globalization has stimulated much utilization of natural resources. There are many companies which are investing in natural resources such as mining like that at Mwadui. Bulyankulu, Geita and Nzega. Presence of these foreign companies enables Tanzania to utilize her resources for development of her people. This has been possible. This has been possible due, to the technology brought in Tanzania by the investing foreign companies.


Increase free trade

Globalization has made production and transportation of goods easier and faster than ever before. Therefore it enables Tanzania to get different varieties of goods of various quality and quantity from any corner of the world. These goods include electronic devices (computer, mobile phones etc) food, medicine, automobiles and chemicals.


Opens doors for employment opportunities

In some instances, globalization creates employment opportunities to many people. For example foreign companies like Vodacom, Celtel (currently Airtel) and Tigo have created thousands or employment to Tanzanians.


It helps to raise national income

Through privatization of public sectors and investment by foreign investors the national income has increased through taxes paid to the government

Improvement of quality of goods and services

This has been due to the competition created by the foreign investors who use new technology from outside. Negative effects

For developing countries like Tanzania free trade causes the decline and under development of industrial sector and local technology. The decline of industrial sector and local technology is caused by influx of goods from outside whose prices are low, yet with higher quality than local goods

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Presence of multinational companies in Tanzania if not well controlled may acquire super profit through exploiting citizens and leaving them poor. Some companies tend to exploit the citizens by paying low salaries to local employees as compared to the foreigners. Also some companies evade paying tax to the government hence deny it of revenue.


Globalization sometimes creates unemployment

With growth of technology machines have greatly replaced human labor. For example, the introduction of electronic devices like computer technology and its programmes have led to eviction of many unskilled Tanzanians from their jobs


It leads to unequal exchange

Through privatization and capital mobility, Northern countries ( Europe, North America) undermine Southern countries ( Africa, Asia, South America) through unequal exchange. Most of potential natural resources in developing countries are owned by companies from developed countries hence undermining local communities


Increase in people’s expenditure

Globalization has made Tanzanians spend much of their resources in recreation activities instead of investing into productive programme. As an adaptation from western many Tanzania spend their money for wedding, buying luxurious items such as cars expensive clothes ect.

Melkisedeck Leon Shine

Development Expert, Web Designer, Entrepreneur, and Technology Enthusiast.

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