Masters Degree Dissertations

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Savings-economic growth nexus in east African community
(Kyambogo University [unpublished work], 2023-08) Sirikye, Samuel
The study investigated the saving-economic growth nexus in East African Community (Uganda, Kenya and Tanzania) for the period 1990-2019 using time series panel secondary data extracted from World Development Indicator database. Specifically the study was to investigate the direction of causality concerning savings and economic growth, examine the impact of gross national savings and other macroeconomic variable on economic growth. The study employed Fisher ADF and Fisher PP to test for stationarity of the variables. The unit root test results showed, lending rate (LRATE) foreign direct investment (FDI) and gross domestic product (GDP) were stationary in level, gross national savings(GNS), gross fixed capital formation (GFCF),exchange rate(EXRATE) and trade openness (TRADE) were stationary after first differencing and inflation (INF) become stationary after second differencing. The Vector Autoregressive (VAR) model was used to establish the causal direction between economic growth (GDP) and gross national savings (GNS) and panel least square used to determine the impact of savings and other macroeconomic variables on economic growth. The VAR estimate shows one way causal direction concerning savings and economic growth. The panel least square fixed effect results revealed that gross national savings has a negative but insignificant effect on economic growth which contradicts the priori expectations that savings positively and significantly affect economic growth, foreign direct investment (FDI) and gross fixed capital formation (GFCF) positively and significantly affect economic growth while trade openness (TRADE) and lending rate (LRATE) negatively and significantly affect economic growth. The study recommended adoption of policies that boost investment (GFCFC), policies that reduce lending rate to encourage borrowing for investment, increase foreign direct investment in productive sectors of the economy and export valve added products. Keyword: Vector Autoregressive model, Panel least square fixed effect, Gross national savings, and Economic growth.
Levels, economic savings and determinants of technical efficiency in public health centre III facilities in south western Uganda
(Kyambogo University [unpublished work], 2023-08) Mugisha, Innocent
Basic to human welfare is good health and it is fundamental for socioeconomic development of any economy. Faced with resource constraints especially in the health sector, technical efficiency among the healthcare agents is a global concern to ensure proper utilization of the scarce resources to deliver good healthcare services to people. About 20 to 40 percent of the 7.5trillion US dollars spent on health sector globally is wasted to inefficiency (Xu et al., 2018). The general objective was to investigate the determinants of Technical Efficiency in public Health center (HCIII) facilities in South Western Uganda. The study was guided by three specific objectives namely (i) to estimate the TE scores among HCIII facilities, (ii) to establish the level of economic savings that can be achieved when technically inefficient facilities achieved technical efficiency and finally (iii) to examine the socioeconomic determinants of technical efficiency in HCIII facilities in South Western Uganda. The study uses a cross sectional descriptive research design with a sample of 30 public HCIII facilities in South Western Uganda. A Constant Returns to Scale (CRS) output-oriented Data Envelopment Analysis (DEA) technique was adopted to estimate TE and slack values for economic savings while a Tobit regression second stage model was applied for the socioeconomic determinants of TE among various public HCIII facilities. Secondary data was obtained from Uganda Bureau of Statistics (UBOS), District Health Information System (DHIS) and District Planning Units for health inputs and outputs as well as socioeconomic characteristics of the population in South Western Uganda for the financial year 2020/21. The findings of the study reveal that 47 percent of the public HCIII facilities were technically efficient and the average TE score was 72 percent implying that the facilities need to improve resource utilization by 28 percent to become technically efficient. The study concludes that unemployment rate, infectious diseases patients, catchment population, patient population below 5 and above 65 years, urban location and competition were the significant determinants of TE for HCIII facilities in South Western Uganda. The study finally recommends reallocation of resources within facilities, increasing resources for facilities and improving social services facilities to improve on the technical efficiency levels for HCIII facilities in South Western Uganda.
Energy consumption and Uganda's economic growth
(Makerere University, 2023-12) Mutumba, Geoffrey Ssebabi
This study investigates the relationship between Energy Consumption and Uganda's Economic Growth (1982 to 2018). Specifically, the study investigates the short and the long run causal relationship between Energy Consumption and Uganda's Economic growth. Secondly, the study investigates the pass-through effect of shocks from Renewable Energy Consumption to Uganda's Economic Growth. Finally, the study investigates the pass-through effect of shocks from Non-Renewable Energy Consumption to Uganda's Economic growth in the period under the review. The study uses Granger Causality Test and Vector Error Correction Model (VECM) to estimate the short run and the long run causal relationship between Energy Consumption and Uganda's Economic Growth. Secondly, the study uses the Structural Vector Autoregression to estimate the pass-through effect of shocks from both Renewable and Non-Renewable Energy Consumption to Uganda's Economic Growth in the period under the review. The analyses in this study presents mixed results. The Granger causality test results show a causal relationship running from renewable energy consumption and non-renewable energy consumption to Economic growth. The VECM results indicate a negative relationship running from renewable energy consumption and non-renewable energy consumption and economic growth in the short run, while appositive relationship running from renewable and non-renewable energy consumption to Economic Growth in the long run. Although the results from Granger Causality Test and VECM indicate that Energy Consumption promotes Uganda's Economic Growth, there is no pass-through effect of shocks from both Renewable and Non-Renewable Energy Consumption to Uganda's Economic Growth in the period under the review. This study makes a contribution to energy economics literature by making an extension to the endogenous growth theory by adding Energy Consumption which is primarily endogenous to the growth process. It also contributes to exogenous growth theory by establishing Energy consumption as a key input to the growth process. The policy implications in this study includes the following; Energy Transition from Traditional Biomass to Modem Energy sources should be encouraged as this can promoted the use of Clean Energy in the country. Secondly, Public Private Investments in the Energy Sector should also be encouraged in order to promote more supply of energy in the country. Finally, Energy Policy and Governance should be streamlined in order to promote Clean Energy Development in the country and thus encouraging faster Economic Growth.
Economic integration and private investment : a case Study of the East African Community (EAC)
(Kyambogo University (Unpublished work), 2024-03) Tibihika, Amon
Economic integration necessitates the removal of trade barriers within the union, as well as the imposition of common trade barriers. All this has been linked to potential GDP growth and growth in private investment (Martin-Mayoral et al., 2016). Therefore, this study conducts an empirical examination of the impact of Economic integration on Private investment in the East African Community in 5 selected partner countries. Additionally, it aims to examine the effect of some selected macroeconomic variables, such as taxes, inflation, domestic credit, and real interest rate on Private Investment in the EAC member states. The research utilizes panel data obtained from secondary sources covering a period of 1990 to 2021 in five partner nations of the East African Community. The primary source of data for this study was the World Bank Development Indicators database. The study extends the investment model by Jorgenson (1967) which is based on the assumption that firms aim to maximize their profits by choosing the optimal level of investment that balances the expected returns on investment with the cost of capital. And Regional economic integration theory by (Viner, 2014) argues that the drive for regional integration goes beyond just the elimination of tariff barriers. Analytically, the panel data technique of fixed effects is used for the empirical analysis as guided by the Hausman Test. Economic integration was found to have a positive and significant effect on private investment at 1 percent level of significance in the EAC region. The coefficient of Economic integration means that when Countries join EAC, they are predicted to register higher private investments of about 13 percent more than before joining keeping other factors constant. In addition, Inflation had a positive and significant effect on private investment. In contrast, real interest rates had a negative effect, though significant effect on Private investment. However, credit and taxes had no significant effect on private investment. Based on these facts, the report suggests that East African Community (EAC) members should encourage more member Countries to join the (EAC). If Countries join resources, they are able to have a conducive environment for private investment. EAC Members should also establish a united East African Development Bank that can provide credit to private investors at very low-interest rates as is the case with developed Countries. Central Banks should adopt appropriate monetary policies to keep inflation moderate.
Determinants of tax-to-GDP growth in Uganda: 2008 – 2023
(Kyambogo University (Unpublised work), 2024-03) Katwesige, Derick Innocent
Uganda is among the countries that implemented tax policy and administration reforms with the aim of increasing performance of revenue. Much as these tax reforms yielded some success and improved the tax revenue performance, early tax revenue performances have not been maintained. It is acknowledged that tax revenue is one of the resources needed to finance expenditure in several economies, Uganda inclusive, fail to mobilize sufficient revenue, necessitating borrowing. The study empirically examined the factors that determine the growth of Tax-To-GDP in Uganda, utilizing quarterly data spanning from 2008/2009 to 2022/2023. Data for the study was obtained from MoFPED, URA, UBOS and BoU. The study objectives were to; determine the impact of agriculture, industry and services on growth of Tax-To-GDP in Uganda; examine the impact of trade openness on growth of Tax-To-GDP in Uganda and examine the impact of exchange rate and inflation on growth of Tax-To-GDP in Uganda. The study was based on the Laffer Curve Theory, the Cobb Douglas Theory and the Marshall Lerner Theory. An ARDL-ECM model augmented by the bounds test were estimated. The findings demonstrated that Agriculture, Industry and Services negatively and significantly affect the growth of Tax-To-GDP in the long-term while Trade Openness and Exchange Rate positively and significantly affected Tax-To-GDP growth. The study recommends linking agriculture to value addition through agro-processing and trade in manufactured products which will result in high income. From the findings, services sector indicated that it had a negative and significant coefficient of -1.998022. Therefore, the study recommends the need to direct policy towards addressing the difficulty of taxing the sector with focus on strengthening tax administration capacity in Uganda, the need to enhance trade openness through further economic integration, more trade facilitation, removing trade barriers to ensure that there is increase in the volume of goods crossing borders.
Determinants of balance of payments among countries in eastern Africa
(Kyambogo University (Unpublished work), 2024-05) Mutale, Robert
Balance of Payments plays a crucial role as an economic indicator, giving valuable perspectives on economic exchanges of a nation on the global stage. Despite its significance, numerous African nations consistently grapple with deficits in their BOP, lacking clear explanations for such shortfalls. This dissertation employs fixed effects and random effects estimations to investigate the determinants of BOP, focusing specifically on Eastern African countries. Drawing upon data from World Bank development indicators spanning from 1991 to 2021, the study utilizes various econometric techniques to discern underlying trends. Key findings reveal that foreign direct investments exert a positive influence on BOP, while money supply, gross domestic product and trade openness exhibit negative impacts. Specifically, foreign direct investments emerge as statistically significant drivers, suggesting the need for policies that encourage and facilitate their inflow. In light of these results, fostering an environment conducive to foreign direct investment through incentives, infrastructure investment, and the establishment of favorable legal frameworks are recommended. Additionally, certain variables were found to have negligible impact on BOP, underscoring the importance of focusing efforts on factors proven to be statistically significant.
Determinants of import demand for rice in Uganda
(Kyambogo University (Unpublised work), 2024-05) Kamugasha, Ian
This study uses a Vector Error Correction Model (VECM) framework to analyze the factors influencing Uganda's import demand for rice. The study focuses on the causal effects of the average price of imported rice, GDP, domestic rice production, real effective exchange rate, domestic consumption of rice, and domestic production of maize on the demand for imported rice in both the short-run and long-run. The findings reveal a significant relationship between GDP and demand for imported rice both in the short and long run and also indicate that the average price of imported rice and domestic rice production have significant long-run effects on import demand for rice. These findings offer valuable insights that can guide policymakers and stakeholders in shaping strategies to reduce reliance on imported rice by promoting domestic rice production. Results shed light on the need to put in place measures to promote domestic rice production by supporting domestic rice producers through providing support to farmers, such as access to improved seeds, subsidies, improved access to credit, fertilizers, and agricultural technologies, as well as training programs to increase productivity and competitiveness of the domestic rice industry.
Factors affecting domestic tourism in Uganda : insights from the Uganda national household survey 2019/2020
(Kyambogo University (Unpublished work), 2024-06) Esule, Joseph
This study investigates the effects of individual, socioeconomic and technological factors on domestic tourism in Uganda. The aim of the study was to fill the gap on domestic tourism literature and provide information on key variables that affect domestic tourism in Uganda. The study estimated a logit model to establish and quantify the effect of individual characteristics, socio economic factors and technological factors on domestic tourism participation in Uganda. The source of data for this study was the Uganda National Household survey 2019/20. Results of the study showed that education level, household size, employment status, access to internet, access to mobile phones, and disability status positively and significantly affected participation in domestic tourism. Further, residence in urban area negatively and significantly affected participation in domestic tourism. As a key recommendation based on this study findings, Government should continue to invest in education for all which will in turn enhance appreciation for domestic tourism. The Government should also consider incorporation of tourism education in the National curriculum. Further, the Government should invest more in Information Communication and Technology (ICT) infrastructure as this would enhance participation in domestic tourism.
Factors affecting domestic tourism in Uganda : insights from the Uganda national household survey 2019/2020
(Kyambogo University (Unpublished work), 2024-07) Esule, Joseph
This study investigates the effects of individual, socioeconomic and technological factors on domestic tourism in Uganda. The aim of the study was to fill the gap on domestic tourism literature and provide information on key variables that affect domestic tourism in Uganda. The study estimated a logit model to establish and quantify the effect of individual characteristics, socio economic factors and technological factors on domestic tourism participation in Uganda. The source of data for this study was the Uganda National Household survey 2019/20. Results of the study showed that education level, household size, employment status, access to internet, access to mobile phones, and disability status positively and significantly affected participation in domestic tourism. Further, residence in urban area negatively and significantly affected participation in domestic tourism. As a key recommendation based on this study findings, Government should continue to invest in education for all which will in turn enhance appreciation for domestic tourism. The Government should also consider incorporation of tourism education in the National curriculum. Further, the Government should invest more in Information Communication and Technology (ICT) infrastructure as this would enhance participation in domestic tourism.
Modeling predictors of poverty in agricultural households in Uganda: application of multilevel and interaction methods
(Kyambogo University (Unpublished work), 2024-07) Habimana, Robert
This study aimed to model predictors of poverty in agricultural households in Uganda using a multilevel and interaction regression model. The research utilized data from the Uganda National Household survey (UNHS 2019/20) data from Uganda Bureau of Statistics. A logit model was used in the estimation and estimates were provided using Multilevel methods approach. Key findings suggest that poverty in agricultural households was positively and significantly influenced by gender of the household head, marital status of the household head, income stability of the household, age of the household head and livestock ownership. Additionally, regional differences accounted for 17.9 % of the variations in poverty levels in Uganda and understanding such regional differences and their influence on poverty levels can assist policymakers and organizations in designing targeted interventions and policies. Such measures can address the specific challenges faced by different regions and promote more equitable development across Uganda. However, poverty in agricultural households was negatively and significantly influenced by residence status, saving accounts ownership and household size. Based on the study's findings, the key policy recommendations were; government should continue implementing gender-focused interventions to address gender disparities especially women empowerment programs such as access to resources including land, equal access to employment opportunities and equal access to education to reduce poverty among women. Regarding income instabilities in agricultural households due to price fluctuations, government should empower famers to form farmer groups where they can collectively increase their bargaining power to avoid price fluctuations.
Determinants of interest rate spread in Uganda’s banking sector
(Kyambogo University (Unpublished work), 2024-07) Kutosi, Demas Lukoye
Interest rate spreads are one of the main indicators for banking sector efficiency and financial sector development. Interest rate margins or spread are a key determinant of financial intermediation and access as well as economic growth. Uganda has one of the highest interest rate spreads in Sub-Saharan Africa. However, there is limited understanding of the underlying causes of bank spreads in Uganda. A puzzling question in banking and finance literature that endures is what are the key drivers of high bank spreads in Uganda? This study examined the sources of interest rate spreads in Uganda. It analyzed the bank, non-consumer and macroeconomic factors influencing bank spread in Uganda, spanning the period from Quarter 4 2008 to Quarter 4 2022 using ARDL modelling approach. The findings indicate liquidity risk and bank rate have a significant positive long run influence on spread whereas credit risk, Return on Assets, Operational Efficiency, GDP growth and Financial Sector Development had a significant negative long run impact on spread. However, Reserve Requirement and Inflation had an insignificant impact on spread in Uganda’s banking sector. The study suggests that commercial banks and policy makers in Uganda should consider the internal, industry and macroeconomic environment in coming up with measures to enhance the sector’s efficiency. This research did not include all the factors influencing interest rate spread such as leverage ratio, market concentration, public sector domestic borrowing thus future studies are recommended to examine their effect on interest rate spread.
Determinants of access to bank credit by smallholder agricultural households in Uganda: evidence from UNHS 2019/2020
(Kyambogo university (Unpublished work), 2024-07) Areebahoona, Anthoney
The purpose of this research was to investigate the determinants that affect smallholder farmer’s access to bank credit in Uganda. The study used data from the Uganda National Household Survey 2019/2020 (UNHS). The study utilized a logit regression model for the data analysis. The findings from the logit model showed that farmer’s access to bank credit in Uganda was positively and significantly influenced by sex of the household head, income level of the household head, marital status of the household head, age of the household head and ownership of a bank savings account. The study’s conclusions led to the development of key policy recommendations. These include promoting a savings culture through various initiatives, providing incentives such as special savings accounts or matching deposit programs, creating customized banking products to carter to farmers needs and offering free tertiary education to graduates of Universal Primary Education (UPE), Universal Secondary Education (USE), and Universal Post O level Education and Training (UPOLET).
Determinants of access to informal credit among households in Uganda
(Kyambogo University (Unpublised work), 2024-07) Kyombo, Moses
Uganda’s credit system is divided into two that is; informal credit and formal credit. Informal credit system happens to be the dominant one. Informal credit involves loans provided by informal financial institutions not under the control of government or bank of Uganda. This dissertation examines the determinants of access to informal credit among households in Uganda. A logit model was used to establish the extent to which independent variables could explain access to informal credit among households in Uganda. Uganda National House hold survey (UNHS) data (2019/2020) was used. The results revealed that informal credit was positively and significantly influenced by; region, education, income, sector of employment and marital status. However, access to informal credit in Uganda was negatively and significantly influenced by residence as well as gender of the household head. The key policy recommendations; evidence showed that education had a positive association with access to informal credit therefore, for better access and utilization of informal credit, government should widen and strengthen its financial literacy programs and preferably translate financial literacy materials to the local languages for better understanding. Government can as well use community based and multimedia platforms like radios, newspapers as well as televisions for promoting financial literacy. On the sector of employment, evidence indicated that informal credit was accessed mostly by people employed in the production sector. In Uganda the production sector is composed of mainly small and medium enterprises (SMEs) Given that SMEs play an important role in production and generation of employment, government should provide tailor made credit specifically for SMEs to boost production. Government can also promote value addition in the small and medium enterprises so that they can generate more income to pay back the credit. Additionally, evidence from the results also revealed that informal credit was accessed more by women. The policy recommendation is that government should widen and strengthen gender friendly policies and programs in support of informal financial sector directed to women financial needs in the economy. Concerning variable income, findings indicated that income had a positive association with access to informal credit. The policy recommendation therefore is that government should strengthen its socio-economic empowerment and livelihood programs to enhance household incomes so that households are able to invest and pay back the loans.
Factors affecting establishment of household enterprises in Uganda
(Kyambogo University (Unpublised work), 2024-07) Owere, Andrew
The study investigated the factors affecting the establishment of household enterprises in Uganda. The specific objectives of the study were to examine the effect of Socio-demographic and Socio-economic characteristics on establishment of household enterprises in Uganda. The study used data from the Uganda National Household Survey 2019/2020. The study estimated the logit model that was identified as the most appropriate model. The key findings from the study were establishment of household enterprises in Uganda was positively and significantly influenced by Rural/Urban location of household head, Access to informal financial services, and household income while on the other hand, household enterprise establishment was negatively and significantly influenced by Post secondary education, Senior Citizen Grant (SCG) and Age of household head. The policy recommendations from the study were that government should integrate conditional elements into the Senior Citizen Grant, that can harness the positive behavioural incentives as identified by Blattman et al. (2014) of requiring recipients to participate in business training or use the funds for specific entrepreneurial activities. This approach will aim at encouraging beneficiaries to reduce their reliance on the grants, thereby promoting sustainable economic growth among senior citizens. Secondly increase funding of informal financial institutions like Rotating Savings and Credit Associations (ROSCA’s), Accumulative Savings and Credit Associations (ASCA’s), Village Savings and Loans Associations (VSLA’s) that would provide financial resources to aspiring entrepreneurs at household level.
Foreign direct investment- economic growth Nexus in Uganda
(Kyambogo University (Unpublished work), 2024-08) Akweise, Moreen
The research examined the causal interaction between Foreign Direct Investment (FDI) and Economic Growth using annual time series data spanning from 1983 to 2021. Data was obtained from the Ministry of Finance Planning and Economic Development (MoFPED), Bank of Uganda (BoU), Uganda Revenue Authority (URA), and the World Bank. The research employed a VAR test, where FDI causes economic growth in Uganda. Furthermore, ARDL approach was used to investigate the factors influencing economic growth in Uganda. In the long-run, inflation and trade openness have a positive and statistically significant effect on GDP at 5% level of significance. In addition, the lending interest rate and exchange rate were found to have a negative and statistically significant effect on GDP. In the short run, economic growth is positively influenced by FDI and the exchange rate at 5% level of significance, while it is negatively influenced by inflation and the lending interest rate. The study recommends the need to channel foreign direct investments in strategic economic sectors like energy, oil and gas and transportation that have stronger economic growth multipliers by offering a range of tax incentives, holidays/ concessions and breaks, the need for Bank of Uganda to control the high lending interest rates offered by commercial banks, and the need to promote trade openness by reducing barriers to trade such as quotas, tariffs and non-tariff barriers to create a more open and predictable trade environment.
Adoption of information communication technology (ICT) and determinants of performance of SACCOs’ in Uganda
(Kyambogo University (Unpublished work), 2024-10) Kabugo, Robert
The study focused on adoption of ICT and determinants of performance of SACCOs’ in Uganda. The three specific objectives included: to investigate the effects of ICT on SACCOs’ performance, to determine other factors that determine SACCOs’ performance in Uganda. Further, the study investigated the determinants of ICT adoption among SACCOs in Uganda. The study used primary data collected from different SACCOs that had embraced the use of ICT in their operations in Uganda. A population of 420 reflecting sample size of 201 SACCOs was interviewed. The study employed a multiple logistic regression model to analyze the effect of ICT on SACCOs’ performance and other factors that determined SACCOs’ performance in Uganda. The study also used an ordered logistic regression model to explore the different factors that determine SACCOs’ ICT adoption levels in Uganda based on three levels that is low, medium and high. The study results revealed that ICT expenditure and number of functional computers were positive and statistically significant at 0.04 percent with ICT adoption and 7.6 percent respectively holding other factors in the model constant in influencing profitability. The study further found out that total accumulated savings and total loan portfolio amount of the SACCO were positive and statistically significant at 0.256 percent and approximately 0.2 percent respectively holding other factors constant in the model and membership size was positive though non-significant in influencing the performance of the SACCO. The ordered logistic model results revealed that number of ICT trained staff, internet access, number of ICT training and age of the SACCO were factors that positively and significantly determines the probability of SACCO ICT adoption levels at 1% and 10% respectively. The study therefore, recommended that SACCOs should earmark more funds for ICT adoption and use, increase the availability of functional computers since they had significant effect, encourage and motivate members to save more and also continuously train their staff in ICT related tools among others to improve SACCOs performance and also adopt ICT in their operations.
The determinants of child labor in Uganda : evidence from the Uganda national nousehold survey 2019/20
(Kyambogo University (Unpublished work), 2024-10) Atuheire, Ben
This research investigated the determinants of child labor in Uganda. The objectives of the study were to investigate the effect of the individual, household and community characteristics on child labor. The study used Uganda National Household survey (UNHS) 2019/2020. The study used a Logit model to estimate the determinants of child labor in Uganda. The key findings suggested that child labor was positively and significantly influenced by age of the child, sex of the child, size of the household, biological father dead, residence of the household, parents level of education, distance to the source of firewood and sector of employment. However, child labor was negatively and significantly influenced by household income, region of location and distance to the source of water. The key policy recommendations of the study were; on distance to fire wood, government should enhance awareness of the population on measures to reduce environmental degradation through afforestation, reforestation, agroforestry, and preservation of the natural forests; government promote household access to clean sources of energy such as solar energy, biogas and rural electrification; on distance to the water source, government of Uganda should put in place measures to reduce distances covered to access clean water by drilling boreholes, facilitating poor households to construct water harvesting tanks and improving on existing wells.
Government development expenditure and economic growth nexus in Uganda
(Kyambogo University (Unpublished work), 2024-10) Muhangi, Bernard
The study investigated the direction of causality as well as cause-effect relationship between development expenditure and Uganda’s economic growth using the Vector Autoregressive (VAR) model and the generalized method of movements (GMM) respectively. Quarterly data for the period 2008 quarter 3 to 2022 quarter 3 were used in the analysis. The data was sourced from Ministry of Finance, Planning and Economic Development and from Bank of Uganda. Findings from the VAR and the subsequent Granger Wald causality test results suggest that there is a uni-directional causality running from economic growth to development expenditure. Estimates from the GMM model indicate that whereas variations in development expenditure have no causal effect on Uganda’s economic growth, the variations in gross fixed capital formation and the variations in debt service had a significant influence on Uganda’s economic growth. On policy stance, we argue that Uganda’s economic growth could be enhanced from increased development expenditure if government could carefully scrutinize and prioritize public investment projects financed by development expenditure to avoid the “white-elephant” hypothesis. Additionally, Uganda’s economic growth can be enhanced through devising strategies that increase on gross fixed capital formation and strategies that enhance domestic tax revenue collection in order to cut on dent servicing.
Foreign direct investment inflows-economic growth nexus among the COMESA member states
(Kyambogo University (Unpublished work), 2024-10) Okello, Patrick
This dissertation examines the nexus between foreign direct investment inflows and economic growth among COMESA member states, while controlling for the effects of gross capital formation, domestic credit to the private sector, exports and inflation. Analysis was focused on two fronts: the causality relationship and cause-effect relationship. Panel data for the period 1994-2019 was utilized to examine the underlying relationships. The study employed the panel vector auto regression with exogenous regressors (PVARX) and the first difference generalized method of moments (D-GMM) analytical techniques to achieve the study objectives. Results from the study revealed a uni-directional causality, with causality running from economic growth to FDI net inflows. However, results indicated that FDI and gross capital formation had a joint causality on economic growth among the COMESA member states. The regression estimates from D-GMM estimation showed that the partial slope coefficient on the FDI variable was positive but statistical insignificant at 5 percent testing level, which suggested that FDI net inflows did not have a significant effect on economic growth among the COMESA member states. Among the control variables included in panel regression model, results showed that gross capital formation and domestic credit to the private sector had a significant positive causal effect on economic growth among the COMESA member states while the inflation variable had a negative but insignificant effect on economic growth among the COMESA member states. This study has been unique of its kind by employing PVARX and D-GMM analytical methods to uncover causality and cause-effect relationship between economic growth and FDI in the COMESA member states. Results suggest that FDI alone does not have ability to predict economic prosperity among the COMESA member states but FDI and gross capital formation can jointly help to predict economic growth in the COMESA member states. Key words: Causality, GDP, FDI, PVARX, D-GMM, COMESA.

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