Browsing by Author "Mugo, Bernard Githio"

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    Public Debt, Private Investments and Unemployment Rate in Kenya
    (Kenyatta University, 2024-11) Mugo, Bernard Githio
    The government of Kenya has put efforts to ensure that private investment in the country is boosted and hence reduce the unemployment rate. However, despite the government efforts in increasing the levels of private investment and lowering unemployment rates in the country, with increased government borrowing, private investment has continued to perform below expectations while the rate of unemployment continues to increase. While some researchers have attempted to assess the effect of public debt on private investment and unemployment the studies have found contradicting results. The major goal of this study was to ascertain how Kenya's state debt has affected both private investment and the unemployment. Assessing the impact of governmental debt on private investment and figuring out how it affects Kenya's unemployment rate were the specific objectives of the study. Longitudinal research approach was used where time series data from 2001 to 2021 was gathered. Secondary data was used. The World Bank, the Kenya National Bureau of Statistics, and the Central Bank of Kenya (CBK) provided the data for this report. To analyze the data, descriptive and inferential statistics were applied where ordinary least square method was adopted. The study established that domestic debt has a negative and significant relationship with private investment. However, the relationship between external debt and private investment was found to be positive and significant. Similarly, regarding the effect of public debt on unemployment rate, the study revealed that domestic debt has a negative and significant relationship with unemployment rate. External debt however was found to have a positive and significant relationship with unemployment rate. Based on the above findings the study concluded that public debt has a significant effect on private investment. For the second objective the study concluded that public debt has a significant effect on unemployment rate. Based on this, the government through its policy makers should come up with measures that would control the mount of borrowing by the government.