Masters of Arts in Economics

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    The Impact of International Capital Flows on Poverty in Uganda:1985-2022
    (Kampala International University, 2023-06) Nowe Dorah
    The study investigated the impact of International Capital Flows on poverty in Uganda. The study was guided by three specific objective, to ascertain the impact of Foreign Direct Investments (FDI), Foreign Aid on poverty and Remittances on poverty in Uganda in the period between 1985-2022. This study followed a Correlational research design showing the extent to which the relationship between the study variables exists. Time series data for the period 1985 - 2022. Secondary data was used in this study. The data was obtained from the Bank of Uganda Statistical Bulletin, UBOS and Financial review for various years. The study followed the Juselius (1990) Co-integration technique and error correction models to estimate the long and short-run relationships in the variables. The first step in analyzing the time series data was to perform unit root testing using Augmented Dickey-Fuller (ADF) Test as suggested by Dickey and Fuller (1979). Further, to establish the short run effect of ICF on poverty, a vector error correction model (VECM) by Granger (1986) was used. On the study results, the Johansen co-integration trace shows that there was a long run relationship between ‘poverty-POVt, and other main variables included; GDP deflator (GDPDFt), Net Foreign Direct Investment (NFDIt), Net Remittances (NREMt), Net external debt (NEXDt), and Net official development assistance (NODAt). In the long run, the coefficient of foreign aid was negative and significant at 5 percent level. Another finding on the effect of remittances on Poverty in particular revealed that FA positively contributes to poverty reduction in an economy. In conclusion, the foreign aid had a significant negative and positive relationship with poverty levels respectively at 5 percent level; and a positive long run and positive effect relationship between International Capital Flows, labor force, capital formation, trade openness, foreign direct investment and poverty reduction. Therefore, the study recommends that BOU should continue its collaboration with relevant authorities to enhance quality of data on remittances and to assess the impact of remittances on Standard of living. Further, BOU should continue to develop its national payment systems and improve access to financial services. Policies should provide incentives that substantially reduce the price of using electronic payments.
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    External debt and economic growth in Tanzania: 1985-2019
    (Kampala International University, College of economics and management, 2023-07) Abdirashid, Abdalla; Sheikh, Ali
    This study empirically examined the impact of external debt on economic growth in Tanzania from 1985 to 2019. It was driven by three specific objectives; Long-term, short-term and direction of causality between external debt and economic growth in Tanzania. The study used time series data between 1985 and 2019 from the World Development Indicators Dataset. The study used ADF's unit root test procedure to examine the stationarity properties of the time series; The results of the unit root test suggested that only external debt is stationary at the level and exports at the second difference, while all other variables in the model are stationary at the first difference. Using Autoregressive Distribted Lag (ARDL), the study applied cointegration to the variables and estimated the long-run ARDL cointegration test, which indicated that there was cointegrating equations implying the existence of a long-run relationship between external debt and economic growth. The study also applied the variable test by Error Correction Model (ECM) to the variables and estimated the short-run relationship between external debt and economic growth. The ECT is statistically significant with the coefficient of -0.715301, indicating that the short-term regression, the delayed error correction term (ECT_1) included in the model to capture the long-term dynamics between cointegrating series is correctly signed (negative). This means that real GDP adjusts to equilibrium by almost 72 percent in one year. Using the Granger causality test, the study also found that GDP can be used to predict external debt, but the reverse is not true. This implies that the relationship between external debt and economic growth in Tanzania over the period 1985-2019 is a one-way or unidirectional relationship. Multiple regression analysis was used to capture the impact of external debt and economic growth. The result of the regression analysis shows the that external debt has a positive effect on economic growth, where an increase in external debt by 0.091715 units leads to an increase in economic growth (GDP) and is statistically significant. In conclusion, the study concludes that external debt is not a burden but a blessing for Tanzania and recommends that external financing should be used in the long-term as a complement rather than a substitute for internal savings.
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    Population growth and unemployment rate in Uganda (1991-2019)
    (Kampala International University, College of Economics and Management, 2022-04) Ali Farah, Isse Muse
    The purpose of this study was to investigate the relationship between population growth and the unemployment rate in Uganda from 1991-2019. It was driven by two specific objectives, which are to determine the short-run relationship between population growth the and unemployment rate in Uganda from 1991-2019. And to examine the long-run relationship between population growth and the unemployment rate in Uganda from 1991-2019. Time series data for Uganda covering the period from 1991-2019 was used for the analysis. The data was obtained from World Development Indicators (WDI). The employed variables in the study were: Unemployment rate (dependent variable), population growth rate, Gross domestic product, Foreign direct investment, Inflation rate, and Exchange rate. The Johansen Co-integration test was used to determine the long-run relationships, while the Error correction model was used to determine the short-run relationships between population growth and unemployment rate. ADF unit root test was used to establish the order of integration of the variables. The results of the study revealed that there was a long-run and short run relationship between population growth and unemployment. Furthermore, the estimated coefficient of population growth was 1.4287. This means that when one percent increase in population growth leads unemployment rate to rise by 1.4287%. The study recommended that to reduce acute unemployment in the country, the Government should ensure there is job creation, especially in the agricultural and manufacturing sectors. Private sector employers should be given subsidies to encourage them to employ more people. Family planning also should be highly emphasized and encouraged, the government could as well implement a child policy just like China, probably a 4-child policy. Such population control policy will ensure that population matches the available jobs.
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    Balance of payment and economic growth in Uganda (1985-2019)
    (Kampala International University,College Of Economics And Management, 2022-05) Abdisalan, Aden Mohamed
    This paper explores the impact of balance of payments on economic growth in Uganda. The objectives of the paper was to establish the connection between the balance of payments and economic growth in Uganda , to examine the effect of export on economic growth in Uganda and to find out the effect of import on economic growth in Uganda. Secondary data was gathered from the World Bank and international monetary fund (IMF) from 1985 to 2019. The Augmented Dickey-Fuller (ADF) test were used to test for stationarity, the results reveal that all the variables were statistically significant after first differencing also the study found that ther is cointegration using ARDL method. The study concludes that balance of payment and import are statistically significance while export is not significant. The study recommended that the imports of Uganda were high though significant in growth need to be checked through establishment of import substitutions industries to reduce imports, this is because the presence of imports lead to depreciation of the Ugandan currency hence imports substitution policy will strengthen the currency of Uganda. There is need for the development of the exports for the country, exports were insignificant and hence seem to be low. The quality of the exports needs to be enhanced and the functionality of the country export system need to be developed
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    Foreign exchange rate and economic growth of Kenya (1987 - 2019)
    (Kampala International University, College of Education and Management, 2022-05) Abdullahi, Dirie Ahmed
    The purpose of the study was to assess the effect of foreign exchange rate on economic growth of Kenya (1987 to 2019). The objectives were to determine the trend of foreign exchange rate and economic growth of Kenya, establish the short run relationship between foreign exchange rate and economic growth of Kenya and examine the long run relationship between foreign exchange rate and economic growth of Kenya. The study was an entirely time series analysis were data was analyzed for a period between 1987 to 2019, the study adopted an ex-post facto research design were the analysis was done based on descriptive statistics to measure the level of FER and economic growth and Autoregressive Distributed Lag (ARDL) to determine the long run relationship between the variables and error correction mechanisms to determine the short-run relationship between the variables. The study results reveal that there was a general increment in the exchange rate of Kenya. The results reveal that every year that passed; the foreign exchange rate for Kenya was generally increasing. The GDP for Kenya was also increasing, compared to the foreign exchange rate, the GDP was both increasing and reducing. Secondly there was a statistically significant relationship between foreign exchange rate and economic growth in the short run. Finally, in the long run still foreign exchange rate had a non-statistically significant relationship with the economic growth of Kenya. The study concludes that the exchange rate depreciation occurred though not so much as in the cases the Kenya currency strengthened. The study revealed that economic growth of Kenya was generally decreasing and increasing secondly concludes that in the short run, the economic growth of Kenya has not been positively affected by the foreign exchange rate changes. The study shows that the prevalence of foreign exchange rate induces the economic growth in the short run thirdly the study concludes that foreign exchange rate can be an avenue for the attainment of the economic growth in Kenya. The study recommends that there is need for development of mechanisms needed for the enhancement of the foreign exchange rate intended to reduce depreciation. Secondly objective reveal that in the short run, there exist a negative relationship between foreign exchange rate and economic growth of Kenya, the study recommend for appropriate mechanisms to enhance the exchange rate, thirdly robust currency stabilization framework aimed at mitigating high exchange rate fluctuations to promote exports in Kenya hence export earnings. The government needs to seek ways of reducing the volatility of the Kenyan shilling exchange rate.