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| Title: | The impact of liberalised interest rate regimes on investment in the manufacturing sector in Uganda,1990-2003 |
| Authors: | Maate, Robert |
| Keywords: | Interest rates
Manufacturing
Investments |
| Issue Date: | 15-Dec-2008 |
| Abstract: | Uganda's economy has been liberalized since 1993 in a bid for accelerated economic
growth. The government has tirelessly tried to attract investors and turn the country into an investment center. Despite the different policy alternatives to achieve the above, the lending rates have remained high resulting into high costs of investment capital. This study investigated using an econometric approach, the extent to which lending rates are a major factor influencing investment levels in the manufacturing sector in Uganda. The
magnitude of lending rates, as a major contributing factor was found highly positively significant. The study further found out that appreciation of the foreign currency against the local currency will stimulate demand for our exports resulting into increased investment in the manufacturing sector and inflation will raise the prices of the products hampering demand. Given the rationale for capital in investment, policy alternatives targeting stabilizing and controlling the cost of capital (proxed by lending rates) below
appropriate rates that will not discourage productive investment should be put in place by govemment. This will make capital affordable to private investors since Uganda is targeting a private sector led economy. Deliberate government policies to encourage diversification to other sub sectors as mining other than concentrating on few sub sectors such as cigarettes, soft drinks are required. Modest interest rates, though desirable for increasing financial mobilization, is not enough in itself and supplementary effort is required in the area of developing the capital market to absorb the likely increased demand for investible funds. However, other macro economic variables identified under this study should also be under the desirable levels. |
| URI: | http://hdl.handle.net/123456789/266 |
| Appears in Collections: | Theses & Dissertations (Science)
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Files in This Item:
| File |
Description |
Size | Format |
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| maate-statistics-masters.pdf | Investment in the manufacturing sector | 3544Kb | Adobe PDF | View/Open |
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