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  • Item
    Policies towards external debt sustainability in Uganda(1980-2004)
    (Makerere University, 1998-08) Muvawala, Joseph
    Uganda's external debt has been steadily increasing since the 1970s and has been largely attributed to excessive financing of the 1990s. this has consequently raised questions tn relation to external to external debt sustainability given the low levels of external earnings. The aim of this study is to ascertain whether Uganda's external debt is sustainable over the period of 1980- 2004. using a simple Interpol deterministic model of debt sustainability developed by Cohen (1985), empirical results from the study indicate that Uganda's external debt was unsustainable for most of 1980s and 1990s with exception of external debt is sustainable for the years 1988- 2004 mainly because of the positive projected export growth rate and low interest rates generated. the result also suggest that from 1993 to 2004 Uganda can afford to run trade deficit on the current account This study on the basis of empirical findings recommends that for Uganda to maintain sustainability of external debt it has to continue borrowing at a highly concessional interest rate and increase export earnings through massive investment in export sector. these recommendations will improve Uganda's solvency conditions
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    Determinants of poverty in Uganda : a case study of Nakaseke sub-county in Luwero district
    (Makerere University, 2002) Sengonzi, Edward Damulira
    In order to understand the determinants of poverty in general, it is important to identify the characteristics which influence poverty at the household level. This study employed a logit model to investigate the determinants of poverty at the household level in Uganda, using Nakaseke sub-county in Luwero district, as a case study. The results indicate that household size and credit accessibility increase the probability of a given household being poor. On the other hand, education level of the household head, increased household expenditure on health, and increased household expenditure reduced the likelihood of a given household being poor. It is observed that the terms of credit need to be beneficial to both the lender and the borrower if credit accessibility is to help alleviate poverty. The study recommends that people should be availed with post-primary education opportunities since lack of basic (primary education) is a significant cause of poverty. Regulation of the activities of the informal credit sector, and provision of affordable and good quality medical care are crucial in the fight against poverty. Individual households need to allocate more time to income generating activities, such as farming, in order to complement efforts by government and non-governmental organisations to alleviate poverty.
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    Technical effeciency and total factor productivity growth in Uganda's District Referral hospitals
    ( 2006-09) Yawe, Bruno Lule
    The study measures the technical efficiency and total factor productivity growtth of 25 district referral hospitals from three regions of Uganda over the 1993-2003 period.This study is motivated by a desire to evaluate the ongoing health sector reforms in Uganda which in part are seeking to improve the efficiency of health services.Nonparametric Data Envelopment Analysis (DEA) is used in the measurement of hospital technical efficiency whilst the DEA-Malmquist index is used in the measurement of hospital total factor productivity change. The results indicate the existence of different degrees of technical and scale inefficiencies in Uganda's district referral hospitals over the sample period.
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    Decentralization, participation and poverty reduction in local government : the case of Entebbe Municipality (1993 - 2002)
    (Makerere University, 2007) Nakimu, Rose
    This study investigated the relationship between participation of the poor people and poverty reduction under decentralized governance, based on Entebbe Municipality). The motivation was drawn from public concerns, research publications, and observations on the state of people's capacity to meet their basic needs, against a legal background defined under the 1995 Constitution of the Republic of Uganda. and the Local Government Act of 1997. The study objective was to establish the extent of the influence of decentralization in the promotion of participation of poor people especially in the decision-making process. And how this impacted on improving the quality of life of the poor people and reducing poverty. The study used a three-pronged methodology involving interviewing key informants and selected groups of the poor; self-administered questionnaires on a sample of 100 poor people respondents; and reviewing of public documents and relevant case studies. Two analytical techniques, correlation and regression, were used to test the relationship between poor people's participation in governance processes and positive outcomes for people's well-being. Moderate correlation was found between participation and service delivery (r .5-19). And between participation and identification of priorities (r=.53 9); but participation and efficiency correlated weakly (r=.1 79). Regression of individual dependent variables against sets of independent variables helped to test the hypothesis. It was established that although decentralization had provided some favorable opportunities for participation, the poor people's participation level was below 50%, which was not effective. The study recommends that the participation level of the poor be raised and to do so requires amending the Local Government Act to guarantee direct participation of the poor at the municipal level. The poor people need to be trained and given skills that will enable them to effectively participate in decision-making. The government also needs to improve budgeting by earmarking specific sectoral fund allocations to promote participation by the poor. The municipal local governments would then be facilitated to priorities according to the peculiar local needs.
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    Factors limiting the demand for stocks on the Uganda securities exchange: A case study of banking employees in Kampala District.
    (Makerere University, 2007-01) Kakooza, Victoria
    The benefits of a well- functioning stock market to economies in spurring economic growth are undisputed. In Uganda, the Uganda Securities Exchange can be an avenue to mobilize domestic savings thereby bringing about reallocation of financial services from dormant to active agents, making long-term investments liquid as transfer of securities between shareholders is facilitated, and give opportunity to Ugandans to invest in Shares and earn dividends. However, those with the financial ability to do so are yet reluctant to make full use of this facility. The study was set out to identify factors that limit the individual demand for stocks on the Uganda Securities Exchange. To achieve this objective, the study took on a cross-sectional field survey of 259 banking employees of major banking institutions in Kampala District. The study used mainly primary data, which was collected through questionnaires that were administered face-to-face and others mailed. A descriptive design was used in the analysis. The findings of the study indicate that the major limitations of demand for stocks are awareness (lack of information) and returns to stocks. Others include; Income levels, Preference for other investments, Preference for shorter term returns, Perceived rigidity of the buying process, perceived entry costs, education levels, lack of sufficient number of products to attract the public, and inadequate marketing for the products. Basing on the findings, the study proposes some improvements and policies to increase the individual demand for stocks. These include increasing awareness campaigns about the activities, prices, returns, some forecasts on stock returns, and the stocks available at the stock market. In addition the USE should increase on marketing of its products plus adoption of intensive advertising in order to attract the public.
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    The level of Influence of the Eucharistic celebration on the Catholic Family Social Life in Busuubizi Catholic Parish.
    (Makerere University, 2007-04) Kyagambiddwa, Simon Peter ; Kyagambidwa, Simon Peter
    The Catholic Church has always considered the Eucharist as the source and the summit of Christian life. Without it the Church cannot stand by her own. The Church puts a lot of importance on the clear understanding of the Eucharist in the life of the Church as a whole but also in the life of a faithful member of the Church. Since the early time of the Church those to receive the Eucharist had to be thoroughly examined and trained in matters regarding the importance of the Eucharist. Those found worthy were accepted to receive the Eucharist. Even in the present day the Church has maintained the same practice. The question that remains in mind whether people really do understand what they celebrate and later alone what they receive? Sometimes there is a big gap between what is expected of someone who receives the Eucharist. Some of those who receive the Eucharist live lives that are even worse those of the pagans. Some of them live in perpetual conflicts with others, some do attend witchcraft functions and so on. Pope Pious X invited all Catholics to say the Mass and live the Mass. It is that very gap between the expected and hat is experienced in practice that forced the researcher to go to the field to find out the cause for that.
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    Socioeconomic Determinants of Primary School Dropout: The Logistic Model Analysis
    (Economic Policy Research Centre (EPRC), 2008-02) Okumu, Ibrahim Mike ; Nakajjo, Alex ; Isoke, Doreen
    This paper describes the socioeconomic determinants of primary school dropout in Uganda with the aid of a logistic model analysis using the 2004 National Service Delivery Survey data. The Objectives were to establish the; household socioeconomic factors that influence dropout of pupils given free education and any possible policy alternatives to curb dropout of pupils. Various logistic regressions of primary school dropout were estimated and these took the following dimensions; rural-urban, gender, and age-cohort. After model estimation, marginal effects for each of the models were obtained. The analysis of the various coefficients was done across all models. The results showed the insignificance of distance to school, gender of pupil, gender of household head and total average amount of school dues paid by students in influencing dropout of pupils thus showing the profound impact Universal Primary Education has had on both access to primary education and pupil dropout. Also the results vindicated the importance of parental education, household size and proportion of economically active household members in influencing the chances of pupil dropout. The study finally calls for government to; keep a keen eye on non-school fees payments by parents to schools as these have the potential to increase to unsustainable levels by most households especially in rural areas; roll-out adult education across the entire country; and expand free universal education to secondary and vocational levels as it would allow some of those who cannot afford secondary education to continue with schooling. This has the effect of reducing the number of unproductive members in the household.
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    The effect of foreign capital inflows on domestic savings in Uganda (1987-2006)
    (Makerere University, 2009-01) Mbaga, Tuzinde
    There has been contention about the effect of foreign capital inflows on domestic savings in developing countries. Mixed results have been presented with some researchers showing a negative effect, whereas others have shown a positive effect. In Uganda particularly, there has not been a clear picture to show a negative or positive effect of foreign capital inflows on domestic savings. The study was undertaken to assess the effect of foreign capital inflows on domestic savings in Uganda. The objectives of the study were to find out the short and long-run effects of foreign capital inflows on domestic savings. Variables were transformed in order to improve the normality. In order to address the first objective, the error correction model was constructed to provide dynamics of the short that lead to long-term equilibrium effects of foreign capital inflows on domestic savings in Uganda. The variables were further put to the unit root test to identify the order of integration. Cointegration was then undertaken to find out the long run effect of foreign capital inflows on domestic savings It was found out that there is a negative relationship between foreign capital inflows and domestic savings in the long run. The error correction model also confirmed the short run movements gradually converge to equilibrium in the long run. The study recommends caution in allowing in foreign capital inflows as too much inflow of capital may discourage savings, though the type of inflows should also be considered since they have a different degree of effect on the domestic savings.
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    Estimating farm-level technical efficiency of sunflower in Lango Sub-region in Northern Uganda: A stochastic frontier approach
    (Makerere University, 2009-08) Okwir, Graceline Akongo
    Information on efficiency in sunflower is severely constraints and this in turn has limited the ability to devise promising policy initiatives in sunflower industry. This study was therefore motivated by the desire to ensure that policy makers and planners make informed policy on how to increase sunflower productivity with the existing resources and available technologies. The general objective was to assess the possibilities for productivity gains that can be made from the current resources by sunflower farmers in Lango in view of guiding policy makers. The specific objectives were to; estimate technical efficiency of sunflower farmers in Lango Sub-region. And identify factors which influence technical efficiency among sunflower farmers. Using cross-sectional data from 196 households from the four districts of Lango Sub-region, data was collected to measure farm level technical efficiency in sunflower production. The study employed stochastic frontier approach where the results of C-D functional form showed that the coefficient of inputs had positive value of 1.1136 indicating increasing returns to scale. The observed technical efficiency ranged from 16.76% to 96.20% with a mean of 81.2%, indicating a wide variation among the different farmers. Further inquiry indicates that education of household head, experience, extension contact, contract farming and access to credit had significant influence on technical inefficiency. The study therefore calls for attention of the policy-makers and the planners to give top priority to strengthening of rural and agricultural supporting institutions in order to enhance agricultural productivity. Such policies inclusion promoting commercialization of sunflower production, increased utilization of conventional inputs as well as extension contacts. The study also recommends the need for further research to look into allocative efficiency in the crop. Additional study can be conducted by employing stochastic cost function model to explore input-cost minimization or data envelop analysis. There is also a need for further research to look into value addition and marketing of sunflower if the country is to pursue its goal of transforming agriculture as stipulated in the PMA
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    Determinants of fiscal deficits in Uganda (1990-2006).
    (Makerere University, 2009-11) Tweheyo, Gregory K.
    Uganda has adopted a wide range of policy reforms aiming at fiscal deficit reduction. The major ones are expenditure management reforms (introduction of cash budgeting, fiscal consolidation, Medium Term Expenditure Framework) and revenue management reforms (introduction of new taxes, general rationalization and harmonization of tax rates, reduction in exceptions and tax administration reforms). Despite all the above reforms fiscal deficits excluding grants have remained significant, averaged at 7.9 percent of GDP for the last ten years. The study investigated the determinants of fiscal deficits in Uganda during 1990 to 2006. The study adopted a model used by Kouassy and Bohoun (1993) which was used on Cote d’Ivoire economy with some few adjustments which include: exclusion of receipts from parastatals, tax revenue and government. Wage bill was approximated by the public administration expenditure and the inclusion of donor budget support since it was highlighted by Mugume and Obwona (1998). Regression analysis (Ordinary Least Squares (OLS) technique) was used to estimate the model and quarterly data was used. Both Long run and Short run regression results indicated that there is positive relationship between fiscal deficit and inflation rate. GDP per capita was found to be negatively related to fiscal deficits. Public administration was found to positively related to fiscal deficits. And donor budget support was found to be negatively related to fiscal deficits. This sign is divergent from what was expected due to the fact that since 2000, donors no longer fund projects directly but it is done under basket funding (fiscal consolidation). The policy implications from the results are; to reduce persistent fiscal deficit, the government has to reduce on public administration expenditure by halting the expansion of administrative units such as districts, town councils and Ministries. Donor budget support should be encouraged in form basket funding (fiscal consolidation) not project support. GDP per capita should be increased by locating public expenditure into more productive areas. While inflation should be reduced by tackling the supply side constraints to increase production especially food.
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    Effects of public-private partnership on efficiency of health services delivery in Uganda: A case study of Kagando Hospital in Kasese District
    (Makerere University, 2009-11) Mugisa, Masereka Godfrey
    The extent to which public private partnership (PPP) strategy has enhanced efficiency in the health service delivery at Kagando Hospital is not well understood. This study was therefore undertaken to assess the extent to which of financial and human resources support through the PPP affect Kagando hospital’s delivery of healthcare service; and determine the Standard Unit of Output for Kagando hospital and its relationship to human resource, cost of medicine, total costs and user fees. The study used a time series study design with quantitative and qualitative techniques. The study used secondary data from hospital documents for the fiscal years between 1996/7 and 2006/7, a period for the existence of PPP in Uganda. Efficiency was determined using Standard Unit of Output (SUO) based on the health economics model developed by Giutsi (2002). Tables, charts, ratios and correlation coefficients were used to determine relationship of government financial and human resource support on hospital efficiency. Results show that there was a general increase in government funding to the hospital over the eleven year period. Seconded staff also increased over the five year period and the main staff seconded by government to the hospital are medical doctors. Admissions, deliveries and surgical operations show an increasing trend while Immunisations, Antenatal Care (ANC) and Outpatient Department (OPD) attendances reveal a declining trend. Some outputs increased due to increase in financial and human resource support to the hospital and other outputs reduced due to reduction in financial and human resource support to the hospital. The overall trend of SUO for the hospital reveals a declining trend while the overall trend of SUO per staff reveals an increasing trend. The study found out that Government of Uganda through PPPH extended grants amounting to 18.4 % of the hospital budget over the eleven years. Government seconded staff to the hospital accounted for 9-14 % of the staff establishment. The trend of Standard Unit of Output reveals a reduction in access to health services while the trend of SUO per staff reveals efficiency. The study recommends maintenance of government grants to the hospital and increase in the grants where possible and government should continue secondment of staff to Kagando hospital focusing on seconding more doctors.
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    Foreign direct investments, exports and economic growth in COMESA countries: a heterogeneous panel causality approach
    (Makerere University, 2009-12) Ndoricimpa, Arcade
    This study examines the interrelationship between Foreign Direct Investment, exports and economic growth in COMESA Countries so as to assess the validity of “FDI-led exports”, “Export-led growth” and “FDI-led growth” hypotheses in that region. The study uses annual data for a panel of 16 COMESA Countries: Burundi, Comoros, DRC, Egypt, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe for the period 1983-2007. The following variables are involved; the Ratio of Inward FDI (percentage of GDP), the Ratio of exports of goods and services (percentage of GDP) and the Growth rate of Real GDP. We test for Granger causality in heterogeneous panels by testing first for Homogeneous Non-Causality and Homogeneous Causality hypotheses as proposed by Hurlin and Venet (2001, 2003) and Hurlin (2004, 2007, 2008). We further use the Pooled Mean Group (PMG) estimation for Heterogeneous Causality tests, method suitable for non-stationary panels, proposed by Pesaran et al. (1999). The findings suggest strong support for the “FDI-led exports” hypothesis, the “Export-led growth” hypothesis as well as the “FDI-led growth” hypothesis. Hence, in general, policies promoting exports and attracting FDI in COMESA Countries are to be encouraged so as to promote and sustain economic growth in the region
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    Determinants of labour force earnings in Uganda's manufacturing sector: An extended Mincerrian analysis of Kakira Sugar works (1985) Ltd
    (Makerere University, 2009-12) Wabiga, Paul
    This study investigates the determinants of labor force earnings in Uganda’s manufacturing sector using Kakira Sugar Works as a case study. It applies the well known Mincerian frame work but in an extended form. Using Ordinary Least Squares method of econometric estimation, it presents evidence regarding the significance of education and experience in determining an individual’s productivity, as measured by the monthly wage rate. The data was collected by a structured questionnaire on sampled workers. The results indicate that education and labor market experience still are important determinants of labor force earning. Moreover, those with post secondary education further stand to earn more than their counterparts with lower levels of education. This implies that efforts to avail training opportunities for the country’s potential labor force are needed if incomes of sections of the society are to be improved. Investments in vocational and higher institutions of learning remain crucial for individual’s earnings. It is important to note that the findings of this study ought to be interpreted with caution, given some limitations. First, the sample consists of only wage earners. Thus, all results should be interpreted as conditional on having a wage earning job, and extrapolations to other economic activities should be avoided like self employment. Second, following the standard Mincerian frame work, education and experience are taken as given.
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    The impact of external debt on economic growth in Sub Saharan Africa: A panel data analysis
    (Makerere University, 2009-12) Oryema, John Bosco
    The effects of external debt on economic growth have been a subject of debate in the academic and policy circles. The debates arouse from poor economic performance in many developing countries amidst accumulation of external debt. However, there are competing hypotheses about the effect of external debt on economic growth as it can boost or reduce growth. This study examined the impact of external debt on economic growth in SSA over the period 1990-2005. A theoretical framework was built based on a neoclassical growth model. The main data source used is the World Development Indicator 2008 CD ROM published by the World Bank. Panel data estimation techniques were applied and results shows that external debt stock to GDP ratio had statistically significant negative effect on economic growth meanwhile the external debt service to GDP ratio was statistically insignificant. It is concluded that debt overhang was the main channel through which external debt negatively affected economic growth in SSA between 1990 and 2005. This is contrary to common view that external debt servicing led to decline in economic growth in Sub Saharan Africa. In terms of policy implications, it is recommended that SSA countries should reduce on taking huge loans in order to avoid debt overhang effect. The negative and statistically significant coefficient of INSTITUTION-a variable measuring political and civil liberties indicates that the governments in Sub Saharan Africa should improve on civil and political freedom in order to boost investor’s confidence on the enforcement of private property rights.
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    Determinants of local revenue collection in Mpigi District
    (Makerere University, 2010-08) Kirabira, Paul
    This study was carried out in Mpigi District to investigate the determinants of local revenue collection in the district. Local revenue is among the sources of revenue used by the district to deliver services to the masses. Other sources are Central government transfers and donor funds. Low local revenue collection is a major challenge to the decentralization policy and this study was carried out to investigate the determinants of local revenue collection and to provide suggestions for improved methods of revenue collection and management. The study covered a total of 170 respondents whereby 150 taxpayers and 20 tax administrators constituted the sample drawn from two subcounties (Mpenja and Mpigi town council). The methods used for data collection included questionnaires, personal interviews, focus group discussions and review of financial documents. Data derived from questionnaires was analyzed using SPSS (Statistical Package for Social Scientists). The findings are presented in frequency distribution tables and figures. The findings reveal that the factors determining local revenue collection in Mpigi district are; inefficiencies in tax enumeration and assessment, poor management of tax registers, lack of awareness on tax regulations and obligations among taxpayers, low incomes of taxpayers, political interference in tax administration exercises and bribery. These factors were ranked using the pair-wise ranking method and results revealed that political interference ranked highest and inefficiencies in tax enumeration and assessment ranked lowest. Results from testing of hypotheses also confirmed that inefficiencies in tax enumeration and assessment and lack of awareness on tax regulations and obligations among taxpayers affected local revenue collection. Based on the findings it is recommended that to improve local revenue collection the district should improve tax administration by improving its tax registration process, strengthening tax assessment mechanism, step up the sensitization efforts account for taxes collected and strengthen incomes of the citizens. The district should also institute mechanisms for raising awareness of political leaders on revenue collection systems.
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    Road infrastructure and economic growth in Uganda 1980-2010
    (Makerere University, 2011) Mukiibi, Paul
    Uganda is a land-locked country with road infrastructure constituting the main mode of transport. However, by 2010 road coverage both paved and unpaved remains low (3112 km and 16888 km respectively), with all-weather paved roads accounting for just 16 percent of entire national road coverage in the country. The low road coverage constrains economic growth in terms of transportation of goods and services but the effect of road infrastructure on GDP has not been empirically investigated. This study fills this gap in knowledge by examining the effect of government spending on road infrastructure development on the economic growth of Uganda for the period 1980-2010. The study employed a Cobb-Douglas production model specifying the functional relationship between government spending on infrastructure development and economic growth. Road coverage in kilometers (sub-divided into paved and unpaved roads) was used as a proxy for government expenditure on roads. Ordinary Least Square (OLS) method was used for the analysis. Error correction mechanism was used to establish short term equilibrium between road infrastructure and economic growth. Granger causality was also conducted and established a unidirectional causality from GDP to unpaved road infrastructure (using secondary data obtained from various issues of statistical abstracts, Background to the budget from UNRA, UBOS, MFPED as well as World Bank data base). The results indicated that in the long-run a 1 percent increase in the number of kilometers of paved roads lead to 2.8 percent increase in GDP. Similarly, a 1 percent increase in the unpaved roads leads to 0.4 percent increase in GDP. Basing on the findings of the study government should commit more resources to increase provision of roads especially paved since they are relatively durable as well as making efforts for the unpaved roads to reach all parts including the rural areas to further stimulate economic growth through the multiplier effect. Also, both public and private sectors should increase on the directly productive capital in order to enhance sustainable economic growth in the country.
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    Determinants of failure of savings and credit co-operative societies: A case of Jinja District
    (Makerere University, 2011) Murana, Justine
    The study was on determinants of failure of Savings and Credit Co-operative Societies in Uganda using Jinja District as a case study. Three Societies namely: Mpala, Kakira and Jinja Municipal were sampled. This empirical study (n=135) was conducted in March 2010. The determinants of failure were measured using the questionnaire whose reliability as estimated by cronbach alpha was 93%. Based on an extensive in-depth interview and closed ended questionnaire with the ordinary and the executive committee members, the findings show a significant interaction between Management, Financial and Human resource Constraints (β=0.427, 0.351& 0.216 sig= 0.000, 0.000, 0.000<0.005.) respectively and SCCS failure, while the relationship between members‟ participation and SCCS failure was not significant (β=-097, sig= 0.225>0.005) despite a higher R2 value of 78.8%. The presence of organisational culture as a moderator variable has a strong effect in accounting for variability in SCC failure in Jinja. The study concludes that whilst membership participation, financial and human resources constraints affects SCCS performance, there were management aspects of the crisis which aggravated the situation and the SCCS problems. The study recommends that for effective and successful performance of the SCCS, strategic planning, capacity building of staff and performance evaluation should be practiced and considered very imperative for sustainable operations.
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    Determinants of trade balance in Uganda, 1988-2007
    (Makerere University, 2011-01) Nahabwe, K. J. P.
    This study set out to examine the determinants of trade balance in Uganda for the period 1988 – 2007 using quarterly secondary data. The hypotheses tested were that; there is a positive relationship between trade balance and real effective exchange rate, foreign direct investment, GDP growth, and terms of trade. Cointegration and error correction techniques were employed, with results indicating that there was a relationship among the variables both in the long run and short run. Econometric results indicate that over the period, GDP growth and foreign direct investment had a positive and statistically significant relationship with trade balance. A ten percent increase in domestic GDP and foreign direct investment will lead to an improvement in trade balance by 5.12 and 0.99 percent respectively. Terms of trade was statistically significant and negative both in the short run and in the long run. A ten percent improvement in terms of trade leads to deterioration in trade balance by 6.03 percent. Based on these findings, it is recommended that government should reduce the price of exports and increase the price of imports. This could be done by reducing export taxes and increasing import taxes, infrastructure improvement, currency devaluation, and reduction of interest rates. Government should aim at achieving high GDP growth rates through improving allocative efficiency, technological improvement, and increase in savings and investments. Government should attract more foreign direct investments by improving investment climate, reducing state interference, improving economic efficiency, and the strengthening of trade liberalization policies.
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    The role of institutions in determining Foreign direct investment inflows to East Africa (Uganda, Kenya, Tanzania)
    (Makerere University, 2011-02) Basemera, Sandra
    The study analyses the role of institutions in determining foreign direct investment inflows to East Africa particulary; Uganda, Kenya and Tanzania between 1987 and 2008. Specifically the study examines the impact of institutional indexes on FDI inflows. Standard panel data techniques are employed to an eclectic model developed by Dunning (1981) but modified to include institutional variables in order to achieve the objective of this study. Analytically fixed effects (FE) and random effects (RE) models are used, and then Hausman’s specification test is used to determine the preferable model which in this case is the fixed effects model. The findings show that institutional variables such as economic risk rating (ERR) and political risk rating (PRR) significantly influenced FDI inflows to East Africa whereas governance and law and order did not. Apart from institutions other factors like inflation, GDP per capita and openness of the economy were found to be significant too. The study recommends increased attention to the role of institutions in attracting FDI inflows to East Africa; the need to maintain social and political stability and macro economic stability.
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    Determinants of export volumes of Uganda’s coffee, 1991-2007
    (Makerere University, 2011-02) Byanyima, Faustion Byanyima
    The study set out to investigate the determinants of export volumes of Uganda’s coffee in an export supply framework. The hypotheses tested were that; an appreciation of real exchange rate and an increase in real interest rate reduce coffee export volume and an increase in international coffee prices, gross domestic product, and gross capital formation increase coffee export volume. The study applied cointegration technique and error correction modeling to Ugandan quarterly data starting from 1991:1 to 2007:4. The results indicate the existence of long-run relationships. The econometric results show that the real effective exchange rate is negatively correlated with coffee export volumes with elasticity of -2.164. The international coffee price has a positive and statistically significant effect on coffee export volumes with price elasticity of 0.789. However, real interest rate, gross domestic product and gross capital formation have statistically insignificant effects in the short-run. From the results, it is concluded that an increase in international coffee price and gross domestic product increase coffee export volumes while real effective exchange rate depreciation and increase in real interest rate reduce the coffee export volumes. The study recommends the establishment of agreements with international coffee buyers to increase prices, prevent exchange rate depreciation, expansion in gross domestic product and reduction in interest rate on loans to producers and exporters thereby encouraging coffee production and increase in coffee exports.