Determinants of Economic Growth: An Empirical Evaluation of the Ugandan Economy

Abstract

This paper investigated the determinants of economic growth in Uganda for the period 1982–2015 using the autoregressive distributed lag (ARDL) mode. The paper was motivated by the impressive economic performance of Uganda since 1986 that made her graduate from a “failed state” to a “mature reformer” in a short time. The paper established that while the initial level of GDP growth, government consumption and investment positively affected Uganda’s economic growth in the short run, inflation, foreign aid and a policy dummy variable representing structural adjustment programmes negatively impacted GDP growth. The results revealed that in the long run, trade openness, population growth, government consumption and investment positively influenced GDP growth in Uganda. The results failed to show a significant relationship between trade openness, population growth and human capital accumulation and economic growth in the short run. The study also failed to show a significant relationship between inflation, human capital and foreign aid and economic growth in the long run. The paper recommends policies that enhances sound macroeconomic fundamentals such as price stability, investment promotion, trade openness, increased government consumption, increased population growth and effective foreign aid.

Macroeconomic Determinants of Economic Growth in South Africa (1994-2016): Cointegration Approach

“…Fischer (1993) discovered that inflation rate has an impact on the growth rate of the country. Ibrahim and Morad (2020) and Odo et al (2016) found a positive relationship between economic growth and inflation, while Sendi et al (2022); Ismaila and Imoughele (2015) and Thaddeus et al (2021) found a negative relationship. It is, therefore, necessary to undertake the current study because the earlier empirical findings discussed above were not conclusive.…”