Evaluation of the Determinants of Capital Flight in Tanzania, 2001 – 2024

Author(s)	Dr. Mutahyoba Deusdedith Baisi
Country	Tanzania
Abstract	This study evaluated the determinants of capital flight in Tanzania for the period of 25 years from 2001 to 2024. The study has critically analyzed the applicability of the portfolio diversification theory in determining capital flight and concluded that the theory may not necessarily be the only underlying basis or reason for capital flight, but other factors may also be at play including macroeconomic indicators and structural nature of the economy. Secondary data from the World Bank Data Bank was applied in the regression analysis; the results have proved that external debt, inflation and GDP growth rate are significant determinants of capital flight while governance is not a significant determinant however with an important contribution to the overall relationship between the determinants and capital flight. The study concludes that mismanagement of macroeconomic fundamentals especially external debt is a key determinant of capital flight in Tanzania which may also be applicable to other developing countries.
Keywords	Capital flight, external debt, highly indebted countries, hot money, inflation
Field	Business Administration
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-01-13
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.61535

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