A Dissertation Submitted in Partial Fulfilment of the Requirements for Award of
the Degree of Master of Science in Accounting and Finance (Msc A&F) of
Mzumbe University
The role of monetary policy and economic growth in Zanzibar is not clear and there is
dearth information pertaining with the impact of monetary policy on Zanzibar economic
growth. The purpose of the study was therefore to investigate the impacts of the
monetary policy instruments and economic growth of Zanzibar. The study focused on
identifying the contribution of monetary policy in Zanzibar economic growth, determine
the relationship between monetary policy instruments and economic growth, identify
challenges encountered during the implementation of monetary policy objectives and
also the study tested the null hypothesis which is „ the monetary policy instrument
significantly influences the economic growth of Zanzibar‟.
The study investigated the impact of monetary policy in Zanzibar economic growth on
selected macroeconomic variables between 2000 and 2013. Both empirical and
theoretical techniques used to investigate the impacts of monetary policy instruments
and economic growth of Zanzibar and concluded that according to questionnaires
returned from the respondents the result showed that not only there is great impacts and
contribution of monetary policy instruments and economic growth of Zanzibar but also
accepted the null hypothesis which is „monetary policy instruments significantly
influences the economic growth of Zanzibar’. However on the other hand, from the
empirical evidence we conclude that there is a little impact and contribution of monetary
policy instruments and economic growth of Zanzibar and also rejected the null
hypothesis of the study.
The study also described the different challenges that affect the monetary policy
authority in implementation of their activities and suggest the ways of solving that
challenges in order to solve those challenges as the result may contribute a lot in
Zanzibar economic activities for poverty reduction and sustainable development.