Public investment in infrastructure and its impact on economic growth in Uganda

Abstract

Public investment in infrastructure remains critical in Uganda‘s development trajectory as population and urbanisation expand. A vast stock of infrastructure is believed to fuel economic growth by reducing the cost of production, increasing the productivity of input factor inputs, and creating positive externalities. The objective of the study was to examine the effect of Public investment in infrastructure on economic growth in Uganda. Specifically, the study assessed whether boosting public investment in infrastructure like Roads, Energy and Mineral development and Education enhances economic growth. The study implemented the Autoregressive Distributed Lag model (ARDL) model to analyse the secondary data from the Ministry of Finance and World Bank database for the period 1990 to 2021. The study concluded that in the long run public investment in Roads, public investment in Energy and Mineral development and Gross Capital Formation has significant positive effects on economic growth in Uganda. The empirical results are comparable with the research findings in similar studies worldwide. The study recommends that government should increase investment in Road infrastructure in order to facilitate transportation of goods and services to the market. The government should also increase investment in the Energy Sector in order to reduce the cost of doing business through affordable power tariffs and hence enable factories to run machines and produce more goods and services all leading to economic growth in Uganda.