BBSE Research Projects (2018)

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Browsing BBSE Research Projects (2018) by Subject "East Africa Community"

Now showing 1 - 3 of 3
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    An Analysis of regional integration in a developing economy.
    (Strathmore University, 2018) Oketch, Bruce Otieno
    The purpose of this study is to find the effect of regional integration in the Kenyan economy with a particular emphasis of dete1mining whether the regional integration has resulted to trade creation or trade diversion. The study adopts an augmented gravity model to determine the effects of the regional integration and the resulting effects either being trade creation or trade diversion. Time series data was used for the period 1980-2015. Using a panel data analysis the results show that there was some trade creation within EAC and COMESA.
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    Impact of private sector credit on economic growth in the East African Community
    (Strathmore University, 2018) Okoth, Mercy Anyango
    The levels of credit extended to the private sector by banks is considered as an important factor when measuring the extent of financial development of a country. Credit extended to the private sector by banks is considered more efficient approach to support the development of economies compared to extension of credit to the public sector. In countries where the government through the public sector dominates in terms of receipt of credit, the private sector experiences challenges funding its investments though credit. In this study, vector error correction model has been applied, on annual panel data from 1988 to 2015 to investigate the relationship between credit extended to the private sector by commercial banks and economic growth in the EAC member states. This study focused only on Kenya, Uganda and Tanzania due to data availability. Other control variables used were; government expenditure, inflation and interest rates. The results show that bank credit to the private sector has a positive impact on the economic growth in the EAC in the long run. Interest rates, inflation and government expenditure also have a significant impact of the gross domestic product of Kenya, Uganda and Tanzania. The EAC member countries have implemented reforms aiming to achieve macroeconomic convergence before the on-coming East African Monetary Union, thus the expected empirical results show that policy makers in the EAC should focus on long run policies to promote economic growth such as innovations in the banking and financial markets in order to increase the private sector credit and maximize on the benefits of regional integration.
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    The Relationship between fiscal policy and elections in the East African Community
    (Strathmore University, 2018) Wachira, Muthoni
    Incumbent leaders may manipulate fiscal policy in terms of increasing recurrent or capital expenditure to convince voters of their competence in running the government. Financing of the increased expenditure is what leads to fiscal balances since the expenditure exceeds the revenue a country generates. This study aims to find out whether fiscal policy is affected by election years for the East African Community member countries which include Kenya, Uganda, Tanzania, Rwanda and Burundi. The main variables of interest are pre-election, election, post-election years and the fiscal balance to capture the fiscal policy manipulation. Control variables are also included such as inflation, the logarithm of the exchange rate and the growth rate in real GDP. Arellano and Bond Generalized Method of Moments estimator was applied to the dynamic panel data model for the time span 1990-2015. The study concludes that the fiscal balance is not affected by the incumbent leaders. This is so because the fiscal balance was insignificant during the election years for the EAC member countries. However, there is a significant relationship between fiscal balance and the growth rate in real GDP indicating that the fiscal balance in East African member countries is affected more by economic variables as compared to opportunistic incumbents. Despite the fact that fiscal balance is not affected by elections, there is still need for strong institutions which translate to better governance, better allocation of public goods, which leads to sustained growth that will lead to a reduction in the fiscal balance