Economic Growth In Uganda Research Articles

Exploring the Relationship Between Tax Revenue and Economic Growth in Uganda

Exploring the Relationship Between Tax Revenue and Economic Growth in Uganda

Modelling Renewable Energy Consumption and Economic Growth in Uganda

This study models renewable energy consumption and economic growth, with evidence from Uganda (1982-2018). The hypothesis that explains causality between renewable energy consumption and economic growth follows the growth, conservation, feedback and neutral. The study uses vector error correction model (VECM) and structural vector auto regression (VAR), within a multivariate data framework. The Pairwise Granger test was specifically used to establish the direction of causality between variables of study. The Johansen co-integration test was carried out to ascertain if there exists a long run relationship between renewable, domestic investment, foreign direct investment and real GDP. The results support the neutral hypothesis between renewable energy consumption and economic growth. The conclusion therefore is a unidirectional relationship running from of renewable energy consumption to economic growth.This paper provides insights into how renewable energy consumption drives economic growth and sustainable development.

The Effects of Climate Variability on Economic Growth in Uganda

A key criticism of Uganda’s macroeconomic modelling frameworks is the lack of accounting for the effects of climate change. As a result, the demand for sustainable climate change evidence-based policy actions is higher than ever, making this a key issue in policy discussions. However, climate change research in Uganda has been piecemeal, with a few using case studies of agricultural commodities, regions, or agriculture. Thus, using the endogenous economic growth framework, this study estimated the long-term and short-term direct and indirect-sectoral effects of climate change on Uganda’s economic growth using the vector error correction model and Johansen cointegration econometric analysis methods. The results show that climate change (precipitation) affects agriculture and industry sectoral output growth in a positive direction, and service sectoral output growth in a negative direction. Further, climate change (temperature) affects agriculture and industry sectoral output growth in a negative direction, and service sectoral output growth in a positive direction. The study’s main conclusion is that an increase in temperature by 1.0 degrees Celsius accounts for a reduction in economic growth by approximately 2.5 percentage points, keeping all other factors constant. The study recommends accounting for climate change effects in macroeconomic growth frameworks, and implementing key sectoral specific climate sustainability measures. JEL Classification: C22, 250, 047, Q54

THE IMPACT OF FINANCIAL INCLUSION ON ECONOMIC GROWTH IN UGANDA: A CASE STUDY OF SELECTED DISTRICTS IN CENTRAL UGANDA

The study was conducted to establish the impact of financial inclusion on economic growth in Uganda basing on selected districtsfrom Central Uganda which was the main objective. The other objectives of the study included; to establish a relationship between financial access and income inequality and to examine the role of quality financial services in poverty reduction in Uganda. A cross-sectional survey design was adopted,both quantitative and qualitativeapproaches were used in data collection and analysis. The study used purposive samplingtechniques to select a total of 194 respondents. Findings revealed that there is growing financial inclusion in Uganda and it has had an impact on economic growth, access to affordable financial services has promoted equitable distribution of income and growth benefits andquality financial services has led to poverty reduction in Uganda.The study recommends that more efforts should be geared towards expanding the coverage of financial services especially in the rural areas in order to shield the households from being exposed to income inequality and poverty. For financial services to reach scale, distribution networks have to be built in rural areas where there is a critical mass of customers needed for financial inclusion.

International Trade and Economic Growth Nexus. Empirical Evidence from Uganda

Exports, imports, and foreign direct investment were used as proxies in this study to examine the relationship between global trade and economic growth in Uganda from 1988 to 2018. Exports, imports, and foreign direct investment all strongly positively and significantly correlated with economic growth, according to empirical evidence. Unit root tests were performed using the Augmented Dickey Fuller test, and the results showed that all variables started out nonstationary but subsequently became constant. Due of the long-term correlations between the variables, cointegration was established using the Engle Granger Cointegration test. The variables' rate of adaptation to the long run within a one-year lag was 57%. Collectively, foreign investment, imports, and exports contribute for 77% of changes in the country's GDP. 23% of the variations in the growing size of the economy were caused by extra factors in the error term that were not included in the model. Because the F statistic was considered statistically significant, exports, imports, and foreign direct investment all have a significant impact on economic growth in the short run. For the sake of making policy suggestions, it is encouraged to use export marketing strategies to grow Uganda's exports and to give domestic businesses tax breaks to improve the way they perform. A welcoming investment atmosphere must also be provided for Uganda to attract foreign direct investment.

Effects of Technological Progress and Productivity on Economic Growth in Uganda: A Generalized Least Squares Approach

Effects of Technological Progress and Productivity on Economic Growth in Uganda: A Generalized Least Squares Approach

Inter-sectoral linkages and economic growth in Uganda: A SAM-based multiplier model analysis

Inter-sectoral linkages and economic growth in Uganda: A SAM-based multiplier model analysis

Investigating the Effect of Infrastructural Development on Economic Growth in Uganda

Aim: The study used quarterly time series data to investigate the effect of infrastructural development on Economic Growth in Uganda.
 Place and Duration of Study: the study utilized data for the period between 2005-2020 obtained from the 2022 World Bank’s World Development Indicators (WDI) and the African Development Bank for African Infrastructure Development Index (AIDI).
 Methodology: The study used the Autoregressive Distributed Lag (ARDL) model to analyze the relationship between infrastructure development and Economic Growth in Uganda.
 Results: The findings from the study indicated a positive relationship between AIDI and Economic growth in Uganda. Overall improvement in AIDI considering the four infrastructure components creates an enabling environment for other factors of production to operate effectively and efficiently hence spurring economic growth in the country.
 Conclusion: The findings therefore implies that investment in infrastructure should consider all the four infrastructure components that comprise the AIDI namely, Transport, Electricity, ICT and Water and Sanitation for Uganda to be able to fully benefit from its investment in infrastructure in both the short and long run.

Analysis of the Drivers of Service Sector Growth in Uganda

The service sector in Uganda emerged prematurely as the leading driver of economic growth. This was before the country fully industrialised as described under the dual economic development model. Despite the enormous contribution of the service sector to economic growth in Uganda, an empirical analysis of its drivers is still in shortage. The main objective of this study is to examine the drivers of rapid growth in Uganda’s service sector using an Autoregressive Distributed Lag (ARDL) model and a long annual time series spanning the period 1980-2020. The results of this study showed that the past level of service performance determines how the sector performs at present. Also, the Human Capital Index (HCI), Foreign Direct Investment (FDI) and Gross National Expenditure (GNE) significantly improve service sector growth in both the short run and long run. Also, if the service sector experiences a shock, the sector will adjust to its long-run equilibrium at an adjustment speed of 24.2%. The findings of this study, therefore, highlight the need for government to increase funding for human capital development through investing in the education and healthcare sectors. Further, the government should implement favourable trade policies aimed at attracting more FDI. Foreign investors should be provided free land and tax holidays. Given the important role that the service sector plays in Uganda’s economy, a large share of GNE should be directed to the service sector to stimulate its performance.

Statistical Analysis of Effect of Population on Economic Growth in Uganda (2000-2020)

Statistical Analysis of Effect of Population on Economic Growth in Uganda (2000-2020)

Renewable and non-renewable energy consumption and economic growth in Uganda

Renewable and non-renewable energy consumption and economic growth in Uganda

Renewable Energy Consumption and Economic Growth in Uganda

This paper concerns itself with the relationship of renewable energy consumption on economic growth in Uganda using data of 1988-2018. Uganda is gifted with renewable energy resources and should be exploring the possibility of meeting the Sustainable Development Goal 7. This paper uses vector error correction model, the augmented Dickey Fuller test for stationarity while for cointegration the Johansen test were used. The Granger test was used to test for causality between the variables of interest. The findings indicate a negative relationship between renewable energy and economic growth. While a positive relationship exist between Gross Domestic Product and gross capita formation, electricity trade, carbon dioxide emissions and Trade Openness that are taken as controls of this model. In conclusion therefore, Uganda need to pursue clean energy policies, while expanding its electricity trade in the East African community in order to absorb the excess electricity supply over peak domestic consumption. This paper will also increase the understanding on the need to integrate energy markets with in the region for greater benefits.

The Costs of Splitting: Administrative Unit Proliferation and Economic Growth in Uganda

The Costs of Splitting: Administrative Unit Proliferation and Economic Growth in Uganda

The Relationship Between Foreign Direct Investment Oriented Economic Growth in Uganda: An Empirical Study Based on VAR Model

The purpose of this paper is to investigate the relationship between Foreign Direct Investment (FDI) and Economic growth as measured by Gross Domestic Product (GDP) over Uganda, from 1980-2018. Vector Autoregressive Model (VAR) and Granger Causality test were used. The results show thatlag 1 is the optimal lag hence bivariate VAR (1) model was used. GDP and FDI exhibits long-term equilibrium since the two-time series are cointegrated in long run. The causality test indicates that there exists a unilateral relationship between FDI and GDP, and FDI causes GDP growth and not vice versa. Understanding these causality links can help in future forecasting of Uganda's economic growth.

The Macroeconomic Determinants of Economic Growth in Uganda (1990–2019)

The study was based on Macroeconomic Determinants of Economic Growth in Uganda using cointegration approach. The researcher used statistical software of Eviews 11 student version for the analysis of the macroeconomic variables affecting Uganda’s economic growth. The main objective of this study was to examine the major macroeconomic determinants of economic growth in Uganda between the periods 1990 and 2019 applying the Johansen method of cointegration. All the variables are integrated at first order except real effective exchange rate as a result the Johansen's cointegration approach was used. The study found out that foreign direct investment (% of GDP), inflation (consumer prices) and real interest rate had a positive effect on growth in real gross domestic product per capita while real effective exchange rate has a negative effect on per capita growth in gross domestic product. In the long run, real effective exchange rate and real interest rate are the significant determinants of growth in real gross domestic product per capita in Uganda. In the short run, inflation (consumer prices) and real interest rate turned to be statistically significant determinants of growth in real gross domestic product per capita. Based on the findings, the following policy recommendations are made: The Bank of Uganda should make use of monetary policy to stimulate the economy through increased aggregate demand due to the positive relationship between inflation and gross domestic product per capita growth. Since there is a positive relationship between FDI and gross domestic product per capita growth, it is therefore recommendable that the government of Uganda continues to attract more international capital inflow through trade liberalization if it is to achieve its growth target of 8 percent growth rate per annum. However the most important policy implication from the findings of negative relationship between economic growth and exchange rate indicates that there is a need for exchange rate policy framework that compliments the existing inflation targeting regime in Uganda. Instead of completely liberalizing the exchange rate in the framework of inflation targeting strategy adopted, policymakers in Uganda have to prevent the upside movements in the exchange rate by taking into consideration its negative effect on economic growth.

Is informality a barrier to economic growth in Uganda? Empirical analysis

ABSTRACT We apply autoregressive distributed lag modeling approach to investigate the short- and long-run relationship between economic growth and informality in Uganda. We use annual time series data, covering the period from 1991 to 2017. We find evidence of short- and long-run relationship between economic growth and informality. The results indicate that an increase in informality significantly reduces the rate of economic growth in both the long- and short-run. This evidence seems to indicate that in low income countries where informality is high, a large size of the shadow economy is correlated with low rates of economic growth. This arises from the fact that informal businesses rarely pay taxes for their operations leading to low revenue collection by governments, which affects the provision of essential social services. We argue that the results of a negative relationship between economic growth and informality in both the long- and short-run are possible given the income level of the country under investigation. The practical policy implication from these results is that tackling low rates of economic growth requires also addressing the key drivers of informality in the country.

The short- and long-run relationship between trade openness and economic growth in Uganda

Using data covering the period from 1983 to 2019, we apply the autoregressive distributed lag (ARDL) bound testing approach to investigate whether trade openness has spurred economic growth in Ugan...

Financial Development and Economic Growth in Uganda: A Multivariate Causal Linkage

ABSTRACT In this study, we have explored the dynamic causal relationship between financial development and economic growth in Uganda during the period from 1980 to 2015. Although the finance-growth nexus debate has been raging for decades, Uganda, similar to many other low-income sub-Saharan African countries, has not yet received adequate coverage on the subject. To eliminate the variable omission bias associated with some previous studies, two intermittent variables, namely savings and inflation, have been included alongside financial development and economic growth in a multivariate Granger-causality setting. In addition, five proxies of financial sector development have been used in the current study, namely money supply to GDP, deposit money bank assets as a percentage of bank assets, liquid liabilities to GDP, private credit by deposit money banks to GDP, and bank deposits to GDP. Using the ARDL approach, the findings of the study reveal that the direction of causality between financial development and economic growth in Uganda is not clear-cut. It varies from one model to the other, depending on the proxy used for financial development. When financial development is proxied by liquid liabilities to GDP and bank deposits to GDP, a unidirectional causal flow from financial development to economic growth is found to prevail. When deposit money bank assets to bank assets ratio is considered a proxy of financial development, astrong bi-directional causal relationship between financial development and economic growth is found to predominate. However, when money supply to GDP and private credit by deposit money banks to GDP are used as proxies, no causality is found to exist between financial development and economic growth in either direction. Based on these results, it is recommended that when drafting policies aimed at boosting economic growth, policymakers should target growth-led financial development proxies as policy implementation outcomes may vary depending on the targeted financial development proxy.

Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL)

Uganda has always relied on foreign assistance to enhance its economic development and has been a recipient of foreign assistance from individual countries and from multilateral organizations. The study aims at establishing the effects of foreign aid on the economic growth of Uganda. It used annual time series data for the period 1970-2017. The hypothesis that foreign aid can promote growth was explored. This hypothesis was tested using time series data for foreign aid. An empirical model is estimated using the Autoregressive Distributed Lag (ARDL) approach to cointegration proposed by Pesaran and Shin [59]. Results show that foreign aid inflow significantly reduced economic growth in Uganda in the short run and long run. The domestic investment was significant and had a positive sign in the short run while exports increased output in the short and long run. Dummy variable for insecurity increase output in the short run and increased it in the long run. The study identified previous periods of democracy index and effective labor to have negatively affected output in the short run. In the long run, effective Labour force, exports, Dummy variable for insecurity and democratic index was found to increase output in the long run. This study contributes to the literature on foreign aid and economic growth by providing the theoretical and empirical evidence for Uganda.

Inflation Thresholds, Economic Growth and Investment Planning In Uganda

<p><em>Economic Planners, monetary policy custodians and civil society in Uganda often disagree on the target for inflation when their development objectives are not harmonised. When development economists argue for increased deficit spending in support of infrastructure development and capital accumulation, they are challenged in regards how much pressure the development budget should put on likely macroeconomic stability, particularly where inflation could rise above the inflation target. This paper examined the effect of inflation on economic growth in Uganda and evaluates the equilibrium rate of inflation in the country, given the macroeconomic environment.</em><em></em></p><p><em>Using the threshold model</em><em> </em><em>and data for the period 1991-2017 it is established that</em><em>:</em><em> a) below 7.3</em><em> </em><em>percent inflation level, the relationship between inflation and economic growth is positive and inflation is not harmful to growth, while at levels above 7.3 percent, inflation was detrimental to economic growth and the relationship become negative; b) at economic growth rates above 7.8 percent, inflation was an incentive for further growth, yet at economic growth rates below 7.8 percent per annum, increases in inflation served as a dis-incentive to economic growth. Therefore Uganda in the current conditions is better off maintaining inflation below 7.3 percent as long as the anticipated economic growth is 7.8 percent.</em></p>