School of Economics (SE) Collections

Permanent URI for this collection

https://makir.mak.ac.ug/handle/10570/173

Browse

Recent Submissions

Now showing 1 - 5 of 569
  • Item
    Foreign aid dependency and sustainability of art service delivery in Uganda’s PNFP sector: a panel analysis (2020–2024)
    (Makerere University, 2026) Akinyi, Sandra. Erica
    This study examined the relationship between foreign aid dependence and antiretroviral therapy (ART) service delivery outcomes in Uganda’s Private Not-for-Profit (PNFP) health sector over the period 2020–2024. The study was motivated by growing concerns regarding the sustainability of HIV/AIDS programs in the context of fluctuating donor funding. The specific objectives were to assess the effect of foreign aid dependence on ART service quality, examine its influence on service continuity, and evaluate the implications of sustained donor reliance for long-term sustainability. A quantitative panel data approach was adopted, utilizing a structured dataset comprising 600 observations. Fixed-effects regression models were used to analyze ART service quality outcomes, while a logit model was employed to examine service continuity indicators. Key variables included foreign aid dependence, viral suppression, patient retention, attrition rates, stock-out days, and service disruption. The findings indicate that foreign aid dependence is positively associated with improvements in ART service delivery. Higher levels of donor funding were associated with increased viral suppression and retention, alongside reductions in attrition, stock-outs, and service disruptions. However, the results also reveal persistently high dependence on external financing, exceeding 80% on average, which poses significant risks to long-term sustainability. The study concludes that while foreign aid remains critical in supporting ART service delivery within the PNFP sector, a gradual transition toward stronger domestic financing mechanisms is necessary to ensure resilience. These findings highlight the importance of balancing donor support with increased domestic resource mobilization to sustain HIV/AIDS service delivery in Uganda.
  • Item
    Private investment and economic growth in Uganda: an empirical investigation: 1985 -2015.
    (Makerere University, 2018) Mubenawe, James
    Private investment in Uganda has been identified to be moving on a downward trend since the 1980’s and the main goal of the study was to utilize time series data to analyze the extent to which private investment contributed to growth in the period between 1985 and the year 2015. Other objectives of the study were to empirically investigate the factors that affected private investment during the period under review and whether there was any relationship between growth and private investment and the impact this had on the growth of the economy. The data used in the study was obtained from various sources like the World Bank and Statistical Abstracts and the International Financial Statistics (IFS). Various tests were conducted to arrive at reliable results. These included unit root and cointegration, autocorrelation and heteroskedasticity tests. The results show that private investment in Uganda was affected by various factors with public investment and changes in domestic credit having a very strong relationship with private investment. The results also show that although changes in the Gross Domestic Product had a positive significant effect on the level of private investment, there was no causality between the two variables. Most of the other variables considered in the analysis conformed to economic theory on the relationship between them and private investment. This been the case, what is required is for the concerned authorities to look for ways of improving the current scenario in order to promote private investment and hence economic growth. This partly can be achieved through maintaining a stable investment environment and a favourable political climate.
  • Item
    Determinants of exchange rate volatility in Uganda
    (Makerere University, 2025) Nakijoba, Valeria
    This study examined the determinants of exchange rate volatility in Uganda using monthly data spanning the period January 2000 to June 2025. Employing the Autoregressive Conditional Heteroskedasticity (ARCH) family model with multiplicative heteroskedasticity, the study analyzed both the mean and variance equations to capture the dynamic behavior of the Ugandan shilling against the U.S. dollar. The results from the mean equation revealed that interest rates exert a statistically significant negative effect on the exchange rate, implying that a 1% increase in interest rates leads to an approximate 0.13% appreciation of the Ugandan shilling. This finding underscores the critical role of monetary policy in influencing exchange rate movements in Uganda. In the variance equation, the results demonstrated that inflation and the trade balance significantly reduce exchange rate volatility. Specifically, higher inflation rates were associated with lower levels of volatility, suggesting that price stability contributes to currency stability when supported by consistent policy frameworks. Similarly, an improved trade balance was found to stabilize the exchange rate by reducing external sector imbalances. The ARCH component indicated that recent exchange rate shocks have a strong and immediate effect on current volatility, while the GARCH term showed that such volatility tends to dissipate relatively quickly thus short lived nature of market disturbances. The findings overall suggest that Uganda’s exchange rate dynamics are largely influenced by interest rate policy, inflation management, and trade performance. Several policy implications emerge. The Bank of Uganda should strengthen its monetary policy stance through strategic interest rate adjustments to mitigate exchange rate fluctuations during periods of depreciation pressure. The government should also sustain price stability by maintaining credible inflation targeting frameworks, stabilizing food and fuel prices, and controlling cost-push inflation sources. Enhancing the trade balance through export promotion, diversification into high-value sectors, and investment in trade infrastructure can further stabilize the currency. Finally, coordination between fiscal and monetary policies is critical to ensure policy consistency, promote macroeconomic stability, and prevent conflicting outcomes.
  • Item
    Impact of monetary policy on the economic growth of Uganda
    (Makerere University, 2025) Tumukunde, Susan
    Monetary policy tools such as interest rates and money supply play a vital role in maintaining economic stability and promoting growth. This study examines the impact of monetary policy on economic growth in Uganda, focusing on the period from 1993 to 2023. The specific objectives of the study were: (i) to investigate the trend of monetary policy and economic growth during the study period, (ii) to examine the long-run impact of interest rate changes on Uganda's economic growth, and (iii) to analyze the short-run impact of money supply on economic growth. Data for the study were obtained from the Bank of Uganda and the World Bank. The research applied three levels of analysis: univariate, bivariate, and multivariate. Univariate analysis involved descriptive statistics to summarize key variables, while bivariate analysis used Pearson correlation to evaluate the relationships between pairs of variables, including GDP, interest rates, and money supply. At the multivariate level, the study employed the Augmented Dickey-Fuller and Phillips-Perron tests to ensure the stationarity of the time series data. Johansen cointegration tests were conducted to identify long-term equilibrium relationships, and Granger causality tests explored causal links between monetary policy and economic growth. The Autoregressive Distributive Lag model was then used to analyze both long-run and short-run dynamics. Descriptive statistics showed that GDP growth and money supply were near-symmetrically distributed, but GDP growth deviated from normality, requiring robust analytical methods. Pairwise correlations revealed a strong positive link between money supply and GDP growth, while the relationship with interest rates was weak and negative. Stationarity tests confirmed non-stationarity, necessitating advanced models like ARDL, which found money supply to have a significant long-term positive impact on GDP growth. Cointegration analysis showed no evidence of a long-run equilibrium among the variables, emphasizing short-term dynamics. Granger causality indicated a mutual influence between GDP growth and money supply, with interest rates playing a limited role. Overall, the study concluded that money supply is a critical driver of GDP growth, while interest rates had minimal influence, suggesting monetary policy should prioritize money supply management to stimulate economic growth.
  • Item
    The impact of informal sector taxation on domestic revenue mobilization in Uganda: a case study of Kikuubo business area in Kampala
    (Makerere University, 2025) Muziransa, Mutaki
    Uganda’s informal sector constitutes more than three-quarters of national economic activity, yet contributes minimally to domestic revenue. This study examines how informal sector taxation influences domestic revenue mobilization in Uganda, using Kikuubo Business Area in Kampala as a micro-level case study. A mixed-methods design was employed, combining primary data from 200 informal traders with secondary macroeconomic data from URA, UBOS, IMF, and World Bank covering 2000–2024. Logistic and Probit models were used to estimate determinants of tax compliance at the trader level, while Heteroskedasticity and Autocorrelation Consistent (HAC-OLS) and Two-Stage Least Squares (2SLS) models assessed the impact of informality, enforcement, digitalization, and formalization on Uganda’s tax-to-GDP ratio. Results show that trader compliance averages 54% and is significantly influenced by awareness, perceived fairness, tax morale, EFRIS usage, formal registration, and turnover. Digital adoption increases the likelihood of compliance more than twofold, while fairness and awareness play critical behavioral roles. At the macro level, enforcement intensity, formality rates, and digitalization positively and significantly improve tax performance, whereas the informal sector’s size exerts a strong negative effect. The 2SLS results confirm that enforcement has a causal impact on revenue mobilization when supported by institutional capacity. Scenario simulations demonstrate that increasing awareness, fairness perception, digital adoption, and formalization could raise compliance to 73%, generating approximately UGX 0.1 trillion in additional annual revenue and increasing the tax-to-GDP ratio by 0.01 percentage points. The study concludes that sustainable revenue mobilization requires a balanced approach, strengthening enforcement, enhancing institutional capacity, improving digital inclusion, and building taxpayer trust. It recommends reforms in presumptive taxation, continuous taxpayer education, transparent service delivery, digital training, and harmonized enforcement across local and national authorities. These measures would significantly improve compliance, broaden the tax base, and enhance Uganda’s fiscal sustainability.