School of Economics (SE) Collections

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    Non-farm household enterprises in Uganda: participation, survival and effect on agriculture commercialization
    (Makerere University, 2026-01) Mugisa, Masereka. Godfrey
    Non-farm household enterprises constitute an important source of income for many households in Uganda, yet they remain underrepresented in development policy and empirical research. This is despite their relevance to poverty reduction and structural transformation, particularly in a context where agricultural households are expected to transition from subsistence to commercial production. In recent years, government interventions have increasingly targeted household enterprises, but evidence on participation, enterprise survival, and the implications of non-farm income for agricultural commercialisation remains limited. This dissertation examines these issues using nationally representative household survey data. The first two empirical analyses draw on cross-sectional household data, while the final analysis uses panel data (a “wave”) on agricultural households. The first empirical analysis investigates the determinants of household participation in non-farm enterprises using a logit model. The results indicate that participation is associated with household characteristics such as marital status, education, region, and access to finance. Participation is lower in the eastern and western regions relative to the central region, and individuals with higher levels of formal education are less likely to engage in non-farm enterprises. This highlights the importance of financial access and regional disparities in shaping livelihood choices. The second empirical analysis examines the factors responsible for survival of non-farm household enterprises using survival analysis methods. The findings show that enterprise exit is most pronounced in the early years of operation, after which survival rates stabilise. Enterprises owned by women and those engaged in agriculture-related activities face a higher risk of exit, suggesting gender- and sector-specific constraints that affect enterprise longevity. The final empirical analysis assesses the relationship between non-farm household enterprise income and agricultural commercialisation among farming households using a logit model. The results show that households earning non-farm enterprise income are less likely to commercialise agricultural production. This finding is consistent with the income-effect hypothesis, which posits the effect of specialization in non-farm household enterprises. Therefore, an increase in off-farm income may negatively affect market supply by increasing household demand for their products. Overall, the dissertation provides empirical evidence on the role of non-farm household enterprises, highlighting critical trade-offs between income diversification and agricultural commercialisation. The findings have implications for the design of enterprise support and agricultural development policies. Subject keywwords; Agriculture commercialization, Non-farm household enterprises, Uganda
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    The impact of agricultural credit on small holder household farmers’ income in Uganda
    (Makerere University, 2025-12) Ssenkungu, Marvin
    Smallholder farmers are vital to Uganda’s agriculture, but limited access to credit limits their productivity and household income. This study examines how agricultural credit affects household income among 2,245 smallholder households across Uganda’s Central, Eastern, Northern, and Western regions, testing the hypothesis that access to credit has a positive impact on income. Using nationally representative cross-sectional data from the 2015 CGAP Smallholder Household Survey, a multiple linear regression model was used to analyze the relationship between credit, socioeconomic factors, and household income. The results indicate that agricultural credit has a positive but only marginally significant impact on income, with credit users earning approximately 28% higher than non-users. Marital status is strongly and positively linked to income, highlighting the benefits of shared labor and decision-making. Education also plays an important role, as farmers with higher levels of schooling tend to earn more, emphasizing the value of human capital in enhancing farm management and technology adoption. Age has a negative and significant effect on income, indicating that older farmers tend to earn less, likely due to decreased physical productivity and lower adoption of new technologies. Regional differences are evident, with farmers in the Eastern and Western regions earning more than twice as much as those in Central Uganda. Membership in a farmer group also has a positive and significant effect, emphasizing the benefits of collective action. The study finds that credit increases income, but its impact is greater when combined with education, collective action through forming and joining farmer groups, and regional-specific support. Therefore, the study recommends expanding affordable and farmer-friendly credit options, strengthening farmer groups to improve access to finance and information, enhancing adult education and training for better farm management, and implementing targeted regional interventions to reduce income disparities and maximize the benefits of agricultural credit. Subject keywords: Agricultural credit, household income, smallholder farmers
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    East African community's foreign direct investment landscape: a study of macroeconomic factors
    (Makerere University, 2025) Bukirwa, Leonia
    This study examines the impact of macroeconomic factors on foreign direct investment (FDI) in the East African Community (EAC) from 2000 to 2021. Specifically, Pooled Panel Ordinary Least Squares (OLS) was employed to examine the impact of the exchange rate on FDI, while the Instrumental Variable (IV) method and Control Function Approach (CFA) were used to investigate the potential endogeneity between the exchange rate, GDP, and FDI. The study focused on exchange rate and GDP as the key macroeconomic factors, controlling for infrastructure development, trade openness, inflation, resource endowment, and ease of doing business. The study findings reveal that the ease of doing business, trade openness, GDP, resource endowment, and infrastructure development positively impact FDI in the EAC, while the Exchange rate volatility negatively impacts FDI. The study also found evidence of a bidirectional relationship or endogeneity between the exchange rate and GDP in their impact on foreign direct investment (FDI). This means that exchange rate and GDP influence FDI while also being influenced by FDI, suggesting a complex interrelationship between these variables. To attract more foreign direct investment (FDI) and promote economic development, policymakers in the East African Community (EAC) should: Implement policies that stimulate economic development, reduce bureaucratic hurdles and regulatory burdens and enhance the ease of doing business to make the region more attractive to investors. Policymakers should also prioritize macroeconomic stability to stabilize exchange rates and attract investment.
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    The effects of foreign direct investment on economic growth in Uganda
    (Makerere University, 2025-10) Walusimbi, Joseph
    Foreign direct investment (FDI) is a critical ingredient in the economic growth of a country. However, despite rising FDI inflows, GDP growth remains below the target envisaged by the national development agenda, raising concerns about its effectiveness. The key objective of this study was to examine the effect of FDI on economic growth in Uganda. The specific objectives of the study were to examine the short-run and long-run effects of FDI on economic growth in Uganda. The study is grounded in endogenous growth theory and builds on Casadio et al. (2012) by employing a neoclassical production function where output is determined by labor and capital, as described in Solow’s (1956) growth model. Accordingly, the Autoregressive Distributed Lag (ARDL) model was employed as the estimation method using annual data (1992–2022) from the World Bank, given that the Augmented Dickey-Fuller (ADF) test confirmed the variables to be integrated of order I(0) and I(1), with no I(2), and cointegration among the variables was established using the ARDL bounds testing approach. Empirical results showed that; In the short run, current FDI had a positive but insignificant effect (elasticity 0.373), In the long run, FDI showed a negative but statistically insignificant effect on economic growth. The study recommends prioritizing quality FDI in key sectors aligned with national goals. This includes FDI with a strong skill component that promotes technology transfer, skills development, productive employment, and sustainable practices. Additionally, emphasis should be placed on encouraging the reinvestment of profits within the host economy rather than full repatriation. Reinvested profits enhance domestic capital formation, strengthen linkages with local enterprises, and support the expansion of productive capacity. Subject keywords; Economic growth, Foreign direct investment, Uganda
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    Determinants of Public Debt in Africa and Selected Economic Blocs
    (Makerere University, 2026) Emusoit, Ali
    The continuous expansion of public debt across Africa and its economic blocs necessitates an in-depth understanding of its determinants. Existing studies largely adopt a homogeneous approach to examining public debt on the continent and empirical evidence in economic blocs is quite limited. Employing fixed effects and one-step Generalized Method of Moments (GMM) estimators on data from 46 African countries over the period 2000–2023, the study analyses the heterogeneity of the determinants of gross public debt. The three major economic blocs included are; the East African Community (EAC), the Economic Community of West African States (ECOWAS), and the Southern African Development Community (SADC). The findings reveal both homogeneous and heterogeneous effects. Real GDP growth and primary balance exhibit a significant negative relationship with public debt across the entire continent and within the blocs. In contrast, the effects of other determinants are highly bloc-specific. The real interest rate is a significant positive driver only in SADC, while exchange rate depreciation positively affects public debt at the continental level but not within any economic blocs. Furthermore, foreign direct investment displays opposing effects on public debt; positive in ECOWAS but negative in EAC. Similarly, inflation, military expenditure and population growth show divergent, bloc-specific impacts. The study concludes that while certain core fiscal and growth variables have uniform effects, the homogeneous one-size-fits-all approach to public debt management is inappropriate for Africa. Effective policy must be tailored to the distinct economic designs, realities, and vulnerabilities of the major economic blocs on the continent. Subject keywords: Public Debt; Africa; Economic blocs; one-step GMM