PHD-Department of Economic Theory

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Entrepreneurial Orientation and Access to New Markets by Small-Scale Earthenware Manufacturers in Kenya
(2011-08-03) Matanda, Otenyo Margaret
Accessing new markets remains a major challenge to MSEs in Kenya. While factors that influence access to new markets continue to attract much literal attention, the role of entrepreneurial is not clear. This study examined the effects of entrepreneurial orientation on access to new markets among small-scale earthenware manufacturers in Kenya. This was an explanatory study that adopted a survey approach. The study was conducted in three districts: Kakamega, Bungoma and Kisumu. A sampling list of small-scale earthenware manufacturers was constructed from lists provided by district cultural officers in the three study sites. From this sampling frame, a stratified random sampling procedure was used to select the study sample. Entrepreneurial orientation, the mindset of firms engaged in the pursuit of new ventures was assessed using a modified version of the Covin and Slevin (1989) scale. This scale is made up of 14 items that assess innovativeness, risk-taking, proactiveness, competitive aggressiveness and autonomy. A pre-tested questionnaire was used to collect data. This questionnaire was administered through interviews by the researcher with the help of two trained research assistants. Three Focus Group Discussions (FGDs) were conducted to establish the process of entry into new markets. The researcher moderated the FGDs using a pre-tested topical guide. Descriptive statistics (frequencies, percent, mean, standard deviation and charts) were used to present and summarize data. Bivariate data analysis such as contingency tables, correlation, x2 and t-tests were used to assess relationships between sociodemographic factors, entrepreneurial orientation and access to new markets. A logic model was used to identify the critical factors that influence access to new markets. Qualitative data were content analyzed. Three hundred and eighty four enterprises responded to this survey. Four percent of the study respondents had accessed new markets in the last twelve months. A majority of the respondents (53 percent) claimed that the opportunity to access new markets had just occurred. Bivariate data analysis indicated that young married males were more likely to access new markets. Higher levels of education, membership into business associations and attending trainings were also associated with access to new markets. Entrepreneurial orientation was also found to be associated with the entry into new markets. The results of the Logic model indicated that training and innovation influence access into new markets. The 1 - GDs established that the process of new market entry is complex and is made up of initiation and negotiation.
Households' saving decisions in Kenya
(2012-03-29) Mbuthia, Aflonia Nyambura
Household's financial Savings form an integral part of a nation's savings level. Financial institutions mobilize the households' savings and allocate them to the most efficient investments. Studies conducted in developing countries, Kenya included, indicate that most households save in informal financial institutions. Low savings in formal financial institutions limit the amount of funds available for long term investments. This study sought to examine the underlying factors determining a household's choice of saving in formal, semi-formal and informal financial institutions using a separate bivariate logistic model for each of the institutions. In addition, the study examined the determinants of households' level of financial savings using weighted ordinary least squares method. Correlation between decision to save in formal, semi-formal and informal financial institutions was identified through pair wise correlations. Major hindrances to ownership of bank accounts were also identified. The study utilized secondary data collected from a sample of 6598 Kenyan households. In each of the three forms of financial institutions, the level of financial information held about the financial institution, credit availability in the financial institution and the level of a household income were the most significant variables, in a household's decision to save in a particular financial institution. The level of household income, perceptions of high interest rates on savings held in financial institutions and the main financial service provider being a formal financial institution significantly increased the level of household financial savings. Positive correlations were found between savings in all the financial institutions although they were stronger between savings in formal and semiformal financial institutions. Resource constraints in a household were the major hindrance to ownership of a bank account. The ministry of finance should collaborate with the banking sector to introduce financial education programmes to enlighten the public on the benefits of saving in formal and semi-formal financial institutions to enhance long-term finance. In addition, the government, through the relevant ministries, need to introduce measures to enhance incomes especially among households who derive most of their income from the informal sector. The increased incomes would not only increase the probability of households saving in formal and semi-formal financial institutions but would also increase the households' level of financial savings. The ministry of finance should encourage the growth of the microfinance industry which has strong positive correlations with the formal financial institutions. Informal financial institutions, especially women groups, should be encouraged to open bank accounts and join semi-formal financial institutions either individually or as groups. This would strengthen the linkage between savings in informal and semi-formal and formal financial institutions and boost overall household savings.
Households' saving decisions in Kenya
(2013-03-26) Mburugu, Hellen N.
Household's financial Savings form an integral part of a nation's savings level. Financial institutions mobilize the households' savings and allocate them to the most efficient investments. Studies conducted in developing countries, Kenya included, indicate that most households save in informal financial institutions. Low savings in formal financial institutions limit the amount of funds available for long term investments. This study sought to examine the underlying factors determining a household's choice of saving in formal, semi-formal and informal financial institutions using a separate bivariate logistic model for each of the institutions. In addition, the study examined the determinants of households' level of financial savings using weighted ordinary least squares method. Correlation between decision to save in formal, semi-formal and informal financial institutions was identified through pair wise correlations. Major hindrances to ownership of bank accounts were also identified. The study utilized secondary data collected from a sample of 6598 Kenyan households. In each of the three forms of financial institutions, the level of financial information held about the financial institution, credit availability in the financial institution and the level of a household income were the most significant variables, in a household's decision to save in a particular financial institution. The level of household income, perceptions of high interest rates on savings held in financial institutions and the main financial service provider being a formal financial institution significantly increased the level of household financial savings. Positive correlations were found between savings in all the financial institutions although they were stronger between savings in formal and semiformal financial institutions. Resource constraints in a household were the major hindrance to ownership of a bank account. The ministry of finance should collaborate with the banking sector to introduce financial education programmes to enlighten the public on the benefits of saving in formal and semi-formal financial institutions to enhance long-term finance. In addition, the government, through the relevant ministries, need to introduce measures to enhance incomes especially among households who derive most of their income from the informal sector. The increased incomes would not only increase the probability of households saving in formal and semi-formal financial institutions but would also increase the households' level of financial savings. The ministry of finance should encourage the growth of the microfinance industry which has strong positive correlations with the formal financial institutions. Informal financial institutions, especially women groups, should be encouraged to open bank accounts and join semi-formal financial institutions either individually or as groups. This would strengthen the linkage between savings in informal and semi-formal and formal financial institutions and boost overall household savings.
Effects of foreign aid predictability on investment and economic growth in Kenya
(2013-08-14) Ojiambo, Elphas Victor
Foreign aid forms one of the largest components of foreign capital flows to low-income countries. Since attaining political independence in 1963, Kenya has been dependent on foreign aid for capital and social investments. The Paris declaration of 2005 commits donors to provide reliable, indicative commitments of aid over a multi-year framework and also disburse aid in a timely and predictive manner in line with the agreed schedules. Studies have also argued that stable macroeconomic policy environment is a requisite for aid effectiveness. However, foreign aid flows in Kenya have been unpredictable and the macroeconomic policy environment unstable. The general objective of this study, therefore, was to examine the effects of foreign aid predictability on investment and economic growth in Kenya. Specifically, the study sought to examine the effect of foreign aid on investment and economic growth; examine the effect of macroeconomic policy environment on foreign aid, investment and economic growth; analyse the effect of aid unpredictability on investment and economic growth; and suggest policy implications. The study drew from the Samuelson model and used time series data for the period 1966-2010. The data was collected from published sources. It employed the autoregressive distributed lag estimation technique. Results of the bound tests indicated that there was a long-run relationship between the variables. The study found that foreign aid had a positive effect on Kenya’s economic growth and public investment. The lagged effects of foreign debt positively affected economic growth and public investment after one year and negatively thereafter. The empirical findings show that private investment positively affected economic growth and public investment. It was found that there was a complementary relationship between private investment and public investment. Kenya’s macroeconomic policy environment was found to be unstable over the study period thus negatively affected economic growth and public investment. This was despite the macroeconomic policy reforms that the Government of Kenya had undertaken and the push for such reforms by the development partners. Foreign aid flows to Kenya were found to be unpredictable and negatively affecting economic growth and public investment despite Kenya and her development partners having committed to work towards predictable foreign aid. In light of the foregoing, this study recommended among other things, the need to review Kenya's Joint Assistance Strategy, ensuring sustained economic growth of over 10 per cent while keeping inflation low. Additionally, there is need to encourage private investment in the country and that development partners have a role to play in this respect as part of their commitments in Busan in 2011.
Inter-organizational information systems adoption by universities in Kenya
(2013-10-15) Waithaka, Stephen Titus
Inter-organizational information systems (IOISs) are internet based information systems that electronically link organizations together to automate information flows and coordinate inter-organization activities between them. Kenya government, in collaborationwith other stakeholders involved in enhancing teaching and research in the learninginstitutions have constructed a terrestrial fiber-optic network that connects most institutions of higher learning to enable them integrate their facilities for the purpose of sharing resources. Despite these efforts, adoption of Inter-Organization Information Systems (JOIS) by universities in Kenya is far from being realized. This begs the question as to what determines lOrS adoption in the universities. This study fiIIed this gap by analyzing determinants of Jors adopting in the universities in Kenya, given the mixed results from empirical evidence on JOrS adoption generally. A broad understanding of these factors is important to the policy makers who can embrace the motivating factors to enhance the adoption of the Jors and suppress the barriers of its adoption.A cross-sectional descriptive survey was carried out using both qualitative and quantitativemethods and a census done on 68 universities in Kenya. Data were coIIected usingboth questionnaires and semi-structured interview guide. University managers providedthe required data. A logit regression procedure was used to analyze the collected data.The study revealed that the lors adoption is low adoption in the universities in Kenya, which was attributed to various factors. The public universities were found to have a higher level of rors adoption compared to the private universities. Factors that were found to influencing rors adoption were top management support, number of personnel with rors skills, availability of internet infrastructure, number of satellite campuses,perceived strategic ben~fits of the lors technology and perceived transactional benefit of the lors technology. The study recommended that: top management in the universitiesin Kenya should be educated on the strategic and transactional benefits of IOIS in the universities, universities should have skilled personnel on lOTS technology, universities should establish satellite campuses, universities should allocate more resourcesnecessary for the improvement of the internet infrastructure and that the governmentof Kenya should put strategies in place to stimulate universities in Kenya to adoptthe rors.
Household health expenditure and health outcomes in Kenya
(2013-10-15) Kimalu, Paul Kieti
This study's aim was to examine household health expenditure, health financing inequities and health outcomes in Kenya. To analyze the determinants of household health expenditure in Kenya, the study used a twopart model. To analyze the determinants of catastrophic health expenditure, this study used bivariate probit with sample selection. The extent of household financing inequities was analyzed using Kakwani and concentration indices. To analyze the determinants of health outcomes in Kenya, the study constructed a pseudo-panel data model, which was estimated using Generalized Methods of . Moments. This study used household data from Welfare Monitoring Surveys (WMS) and the Kenya Integrated Household Budgetary Survey data sets. The Welfare Monitoring Surveys were conducted in 1992, 1994 and in 1997. The Kenya Integrated Household Budget Survey was carried out in 200512006. Data on county population, number of health facilities, literacy rates and public health budget allocation were obtained from various Government sources. The findings on the determinants of household health expenditure established that higher household income was associated with higher household health expenditure, while higher public health budget allocation to the counties was associated with lower household health expenditure. Visiting public health providers was associated "Yith lower household health expenditure compared to private and mission health. providers. On the determinants of catastrophic health expenditure, the study findings indicated that household members . visiting private and mission health providers were more likely to incur catastrophic health expenditure compared to those visiting public health providers. Households with lower probability of incurring catastrophic health expenditure were those in rich income quintiles, in urban areas, and with household heads having at least primary education. The study findings show evidence of inequities in health financing. The study findings show household health expenditure concentration index of 0.45,0.53 and 0.75 in 1992, 1994 and 1997, respectively, indicating that the rich households were contributing more than the poor households in financing health care. With regard to key determinants of household health outcomes, the study found that higher household income, larger proportion of households with safe water source, literacy rate and progressivity in household health care financing measured through Kakwani indices were associated with improved health outcomes. However, larger household size worsened health outcomes. The study recommends that the Government considers increasing health budget allocation. The study also recommends that the Government considers strengthening and enforcing her policy of provision, accessibility and affordability of health care services by further investing in public health facilities and improving their distribution. Finally, the Government could consider designing and developing health financing mechanisms to protect the poor and the vulnerable from catastrophic health expenditure
Foreign direct investment spillovers and productivity of domestic firms in Kenya
(2014-09) Mugendi, Charles Ndegwa
During the recent years, it has been observed that countries compete with each other to attract foreign investment. Countries have gone further than simply removing barriers to inward foreign investment and have taken a more pro active approach towards attracting FDI through the use of fiscal and financial incentives. This has been done owing to the notion that when foreign companies invest in a host country, productivity gains are assumed to accrue to domestic producers from spillovers generated by foreign affiliates. Despite this being hugely important to public policy choices, there is no conclusive evidence that domestic firms benefit from foreign firms. Empirical studies have shown that spillovers from foreign to domestic firms depend mainly on the country and host firms characteristics. Therefore, this study attempted to empirically examine if in Kenya, domestic firms have benefited from foreign firms using a panel data for the period 2009 to 2011. The study looked at the transmission mechanism, that is, both horizontal and vertical linkages. The study has gone beyond the existing studies in Kenya by capturing firm’s characteristics that determine the spillovers from foreign to domestic firms. To achieve these objectives primary data was collected from various firms in Kenya; this was from a sample of 204 firms from Nairobi, Nakuru, Mombasa and Kisumu cities. The data was captured using a structured questionnaire which was administered to various firms. A fact sheet was used to summarize the data collected before it was cleaned, coded and edited for completeness and accuracy. Thereafter analysis was done using Feasible Generalized Least Square method (FGLS).The study found that foreign firms influenced domestic firm’s productivity through both vertical and horizontal spillovers. Foreign firms were found to channel horizontal spillovers through competition effect, demonstration effect and labour turnover effects. On vertical spillovers small firms were found to benefit most from selling of goods and services to foreign firms. Skills, Gender and size of firms were some of the variables that were found to have a major influence on firms’ productivity in Kenya. Additionally, other variables like technological gap, research and development had an influence on firms’ productivity. The study also found that firms’ ownership characteristics were a major determinant of productivity whereby foreign firms were found to be more productive than domestic firms in the two sectors; manufacturing and agriculture but productivity in the service sector was the same. Finally skills, technological gap, size, research and development were major factors that determined horizontal and vertical spillovers from foreign to domestic firms, other factors like ethnicity and gender were insignificant.
Agricultural export supply response to price and non-price Variables: a case of horticultural sub-sector in Kenya
(Kenyatta University, 2015) Njenga, Peter Miring'u
ABSTRACT Kenya has a long history of growing horticultural crops for both domestic and export markets. The climatic conditions are highly varied supporting the growth of a wide range of horticultural crops. The horticultural sector currently ranks as one of the economy's fastest growing sectors and is ranked as the second leading foreign exchange earner after tea. The sub-sector is a major source of livelihood to smallholder farmers and has been identified as a key 'driver' towards the realization of "Vision 2030" which envisages Kenya as a middle income economy and a semiindustrialized country by the year 2030. Although horticultural exports have been contributing to increased rural incomes and reduction of rural poverty in Kenya, horticultural exports remain a small fraction of Kenya's overall export sector. This produce is far from saturating world demand. The understanding of the responsiveness of horticultural export supply to changes in price and non-price factors is crucial for formulating a sound horticultural export specific policy package. The key issue is how urgently Kenya should increase horticultural exports supply and make such an increment sustainable. This study investigated the effect of price and non-price variables on horticultural export supply in Kenya and also drew policy implications from the findings. Time series secondary data for the period between 1973 and 2010 was used. The study used the autoregressive distributed lag (ARDL) estimation procedure which tested for the existence of a non-spurious long-run relationship between price and non-price factors and horticultural export supply response. Diagnostic tests were also carried out. The Error Correction Term lagged once was negative and statistically significant indicating high speed of adjustment. In the long-run, the empirical findings show that horticultural export supply responds positively to agricultural credit, classified road network, foreign direct investment, trade openness and EurepGap. The horticultural exports had elastic response on all factors apart from that of foreign direct investment which was inelastic, otherwise all were statistically significant. Coefficients for relative producer price and income per capita were statistically significant and had negative effect on horticultural export supply. This study recommends that more data and information on prices and market connections should be made available so as to make horticultural export suppliers to be well informed on any price fluctuation. There should be construction and maintenance of rural access roads. Embassies abroad and private companies should carry out promotions through trade fairs and exhibitions so as to maintain and improve on this low horticultural export supply response with respect to relative producer price. The study further recommends provision of appropriate credit packages for horticultural producers and dissemination of information on available sources of funding. Work permits should be provided to genuine foreign investors who are interested in horticultural export business. Government should also enhance the capacity of public research institutions. Monitoring and evaluation of trade flows should be encouraged. Where feasible, private sector players should be facilitated to undertake self-regulation and conform to international market requirements.
Out-of-pocket expenditures, equity in maternal health care utilisation and health outcomes in Nigeria
(Kenyatta University, 2016-11) Salewa, Adetsav Asen Omonike
Health is a highly valued asset and a prerequisite for productive activities. This is because poor health limits the production capacities of the affected person and their ability to enjoy the good things of life. To achieve desirable and sustainable health outcomes, health care expenditure must focus on promoting health service delivery and improving health service utilisation. Despite Nigeria's commitment to international and regional agreements, her health sector has been continually underfunded by successive governments. Public health expenditure as a percentage of government expenditure stood at 3.2 per cent in 2001, increased to 9.4 per cent in 2007 but fell consistently to 5.2 per cent in 2013. This is low compared to the Abuja Declaration target of 15 per cent. Also, a greater proportion of the country's total health expenditures are borne by households through out-of-pocket expenditures. Out-of-pocket expenditure as a percentage of total health expenditure was 67.9 per cent in 1995 but dropped to 61.7 per cent in 2000 after which it increased to 69.4 per cent in 2013. This fell short of the Millennium Development Goals target of 30-40 per cent. It is also considerably below the 2015 Sustainable Development Goal target of zero per cent. The health sector in Nigeria also suffers low prevalence of risk-pooling arrangements and inequity in maternal health care utilisation. This makes Nigeria to be one of the countries with the highest rate of infant and maternal mortality in the world. India and Nigeria together account for more than a third of all under-five deaths and second highest maternal mortality rate globally at 14 per cent after China's 20 per cent. This study aimed at examining out-of-pocket expenditure, equity in maternal health care utilisation and health outcomes in Nigeria. The study adopted a cross-sectional research design. Data was obtained from the 2013 General Household Survey as well as 2008 and 2013 Demographic and Health Surveys. Two-part, Logistic Regression and Recursive Bivariate Probit models were estimated. The study found that the major determinants of out-of-pocket expenditure in Nigeria were: region of residence, sex, age, insurance coverage, household size, reported illness, admission in hospitals and occupation. In addition, the differences in equity gaps in skilled birth attendant and delivery in health facility for rural-urban and poor-rich gaps, widened but antenatal visits improved greatly with the richest wealth quintile being favoured. However, along regional divides, the differences in equity gaps in delivery in health facility widened while equity gaps for skilled birth attendant and antenatal visits improved with the South West zone being favoured. Lastly, increased utilisation of skilled birth attendant improved health outcomes significantly in Nigeria. This study, therefore, recommended that: greater consideration should be given to increasing the level of government budget for health, efforts on sensitising citizens on good health seeking behaviours should be intensified, Primary Health Care should be strengthened by government, health insurance coverage should be scaled up and policy makers at all levels should put in place effective and efficient monitoring mechanism to ensure accountability and enforcement of best practices.
Analysis of Fertility and its effects on Health among Mothers and Children in Tanzania.
(2016-11) Lihawa, Robert Michael
ABSTRACT Health is an important socioeconomic component as it promotes the national welfare and fosters economic prosperity. Tanzania has made significant strides with regards to investments in its health sector by developing major health policies meant to enhance sustainability of the health status of its populace. , Significant efforts have been directed towards reduction of disability, morbidity and mortality, further nutritional status and improving life expectancy. However, despite the government's effort to improve access to health services across Tanzania, poor maternal and child nutritional health statuses are still a challenge to date. On the other hand, fertility rate in Tanzania is higher than the global average that poses serious challenges for sustainable development. The core objective of this study was to examine the relationship between fertility, maternal health and child health outcomes in Tanzania. Specifically, the study examined the effects of socioeconomic factors on fertility in Tanzania. Subsequently, the study sought to examine the effect of fertility on child health outcomes using height-for-age Z-score (HAZ) and the probability of a child being stunted as dependent variables. The study also examined the effect of fertility on maternal health status using Body Mass Index (BMI) and the probability of a mother being underweight as dependent variables. Cross-sectional data from Tanzania Demographic Health Surveys for 2010 was used for the analysis. The study used Zero Inflated Poisson regression model to estimate the effect of socioeconomic factors on fertility. Subsequently, Ordinary Least Square (OLS), Probit, Instrumental Variable IVProbit and IVregression models and the Control Function Approach (CFA) were employed for the analysis of the effect of fertility on maternal and child health outcomes while controlling for the endogeneity and heterogeneity problems. Based on the study's findings, the age of the mother and marital status significantly affect the number of children in Tanzania. On the other hand, maternal education, mother's employment, contraceptive use, awareness of family planning, access to media and place of residence were associated with significant changes in fertility. Again, fertility significantly lowered the height-for-age z-score (HAZ) and increased the probability of a child being stunted. On the maternal health status, high fertility reduces the women's welfare by reducing the Body Mass Index (BMI) and consequently increasing the probability of a mother being underweight. Results further indicate a presence of heterogeneity arising in the maternal health model. Based on the finding of this study, promotion of family planning is recommended. The study also recommends investing in women's education as a way of rooting out illiteracy on matters related to family planning. There is also a need for the government to increase the proportion of women in the labor force and boost their participation in the same as a means of enhancing their well-being as well as that of their families.
Growth of housing prices in Kenya and its dynamic relationship with selected macroeconomic variables
(Kenyatta University, 2017) Njaramba, Stephen Githae
In Kenya housing prices are considered high and have still continued to rise. This has made housing affordability and access a preserve of the top income earners. Consequently, large population live in houses with reduced access to clean water, sanitation, unreliable and unhealthy energy sources, increased exposure to diseases and low levels of financial security. Arable land is also being converted to residential centers which is constraining on public goods provision and agricultural output. The government of Kenya has struggled to make housing affordable and also to encourage housing access and home ownership. This effort has not been quite successful since the housing prices continue to rise and also declining access to descent housing. The variables the housing prices respond towards and could inform the policies to manage the housing prices are not clear. Housing prices behavior have also been known to influence business cycle dynamics by affecting aggregate expenditure and also the performance of the financial system through their effect on the profitability and stability. The purpose of this study was therefore to analyze the variables the housing prices respond to both in short-run and in long-run. The study also examined the dynamic relationship between housing prices and selected macroeconomic variables. In doing this, the study used time series data for the period 1960 to 2015 and adopted an ARDL and VAR models. The ARDL and VAR models were selected since the housing prices behaves differently from other goods’ prices, and as such, previous values of housing prices and other variables used were required to explain current behaviors. The ARDL model is best suited for small sample size and has a capacity to estimate short run and long-run dynamics. The ARDL model also has no burden of establishing the order of integration and it distinguishes dependent and explanatory variables. With ARDL, it is possible to use differing optimal number of lags among the variables. For VAR, the study used Toda and Yamamoto (1995) methodology. This is a modified version of granger causality test based on augmented VAR modeling. The study findings show that the sources of housing prices growth include household consumption expenditure, construction cost and property taxes both in the short-run and long-run. Private capital inflows and households’ indebtedness have a positive transitory effect to the housing prices. Against the popular view, supply of housing have no effect on housing prices. For the dynamic relationship between housing prices and the selected macroeconomic variables, the results indicate that the housing prices dynamically relate with the selected macroeconomic variables. The study therefore concludes that housing prices have a positive contemporaneous impact on the selected macroeconomic variables indicating the existence of mutually reinforcing cycles between the housing prices and the selected macroeconomic variables. Therefore, there is need to observe the housing prices to avoid the cost that could result in case of instability in the housing market.
Effects of farm size and greenleaf marketing arrangements on smallholder tea production efficiency in selected counties in Kenya
(Kenyatta University, 2018) Ateka, Josiah Mwangi
The smallholder tea sub-sector makes an important contribution in the Kenyan economy. Although the subsector has enjoyed relative growth in terms of acreage, output and number of growers, productivity has remained low. The subsector is characterized by huge differentials between actual and potential yields, which imply existence of production inefficiencies. Studies on efficiency in the sector have focused on the regional differences in efficiency, but have not explicitly considered the effects of farm size on efficiency; despite rising concerns from stakeholders about subdivision of tea farms. Moreover, the influences of the alternative tea market channels (ATMCs) which are outcome of the tea market reforms have also not been accounted for in previous studies. This study estimated the level of technical efficiency (TE) and analysed the effects of farm size and marketing arrangements on efficiency in the smallholder tea subsector in Kenya. Using the multistage random sampling approach, data for the study was collected from a cross sectional survey of 525 tea farming households. The level of TE was estimated using the variable returns to scale DEA model, while the analysis of farm size effects was explored using the Fractional Regression (FR) model which accounts for the fractional nature of efficiency scores. The study further applied the Endogenous Switching Regression (ESR) and Propensity Score Matching (PSM) model to investigate the effect of marketing arrangements on TE. The study found that smallholder tea farms were technically inefficient and were operating below their optimal scale. The estimated mean of TE was 0.46 which implies that tea farmers can achieve their current tea output using only 46 percent of their inputs. The study further found that tea farmers in Nyamira County were technically less efficient than their counterparts in Bomet County. The effect of farm size on TE was found to be nonlinear with TE first falling and then rising with increase in farm size. Apart from contributing to literature on the relationship between farm size and efficiency, the study demonstrates that there exists a threshold of farm size (3.93 acres) beyond which increase in farm size leads to an increase TE. The other factors that were found to influence TE were participation in the Farmer Field School (FFS) extension program, the share of family labour applied in tea farming, the age of the farm and the education level of the household head. With regard to tea marketing, it was found that the ATMCs were used by 36.4 percent of the smallholders in the study area. From the ESR and PSM models the study found a consistent result that ATMC participation increases TE in tea production. The study recommends that Agriculture and Food Authority (AFA) and the respective county governments enact regulations that restrict farm subdivisions and implement policies that encourage consolidation of tea farms, support tea replanting to replace aging tea gardens and deepen market reforms in order to increase the farmers‟ access to ATMC. In addition, efforts should be directed towards promotion of the FFS extension, addressing labour market imperfections and ensuring that the policy formulation process in the tea sector accounts for regional specific heterogeneities that may impact on efficiency.
Effect of Poverty on Healthcare Utilization, Choice of Healthcare Providers and Health Status in Kenya
(Kenyatta University, 2019-04) Musyoka, Peter Katundu
The importance of good health cannot be under estimated. However, presence of high poverty rates can lead to under utilization or lack of utilization of health care thus hindering achievement of good health. Thus, poverty reduction and improvement of health care utilization are important in ensuring enjoyment of good health. Despite Kenya‟s commitment to reduce poverty and improve health status of her citizens, between 1982 and 2014, poverty remained high above 40 per cent. However, in 2015/2016, poverty was estimated to have reduced to 36.1 per cent. This was against the Millennium Development Goals target of halving poverty by 2015 and the Sustainable Development Goals target of eradicating poverty by 2030. Kenya‟s health indicators have also not been impressive. Infant mortality rate, for instance, stood at 39 deaths per 1,000 live births in 2014 against Millennium Development Goals target of 22 by 2015. Maternal mortality rate remained high at 362 deaths per 100,000 live births in 2014 against Millennium Development Goals target of 147 by 2015. The Sustainable Development Goals target is to have less than 70 deaths per 100,000 live births by 2030. This poor performance in health indicates that the country needs to address the health challenges otherwise it will miss on the development goals by 2030. Health care utilization has also been low. Household members who reported illness and never sought health care stood at 22.8 per cent in 2003, before dropping to 16.7 per cent and 12.7 per cent in 2007 and 2013, respectively. Those who fell sick and reported lack of finances as the main reason for not seeking medical attention constituted 44 per cent in 2003, 38 per cent in 2007 and 21.4 per cent in 2013. These statistics point to poor health care utilization due to poverty. The aim of this study, therefore, was to investigate the effect of poverty on healthcare utilization, choice of healthcare providers and health status in Kenya. The study employed a non-experimental cross-sectional research design. The study used the Kenya Household Health Expenditure and Utilization Survey dataset of 2013. To achieve objective one, the study used Negative Binomial Regression Model, while Multinomial probit was used to address objective two. Objective three was addressed using Ordered probit model. In all the three objectives, Two Stage Residual Inclusion and Control Function models were used to control for possible endogeneity and unobserved heterogeneity. Study findings showed that increase in wealth increases health care utilization. Further, the results revealed that as wealth increased, the probability of visiting private hospitals increased while those of visiting government, mission and other health facilities declined. The results also revealed that, those with higher wealth index were more likely to report better health status compared to those with lower wealth index. The results, therefore, indicates that increase in wealth increases healthcare utilization, motivates individuals to seek healthcare from providers considered to offer high quality health services and improves health status. Thus, although Kenya missed some health related Millennium Development Goals, if poverty is addressed, the country can do better in its efforts to achieving the Sustainable Development Goals and the country‟s development plan, Kenyan Vision 2030.
Effect of Part-Time Employment and Skills Mismatch on Labor Productivity, Unemployment and Output Gap in Nigeria
(Kenyatta University, 2022) Bako, Wushibba; Samuel Muthoga; James Maingi
Skilled manpower development and its effective utilization in the production process is necessary for high economic growth and poverty reduction. This has been the goal of Nigeria which has not been achieved yet despite the establishment of the Industrial Training Fund and the National Directorate of Employment. The nation in 2015 had about 10.5 million children who were out of school, tertiary participation and completion rate of 15 and 13 percent respectively. The mean years of schooling was 5.4 and about 1 in 5 workers was a part-time employee. Labor productivity rate in the country was 57 percent less than the seven fastest developing countries and declined by 5.78 percent between 2015 and 2018 while the unemployment rate was 23 percent in 2018. Economic growth rate was 3.15 as against 6.22 percent policy target for the period 2011 to 2018. These have contributed to criminal activities such as drug abuse, kidnapping, insurgency in the North East, crude oil theft and other socio-economic vices. The purpose of this study is to examine the effect of part-time employment on labor productivity and also determine the effect of skills mismatch on unemployment and output gap in Nigeria for the period 2010 to 2018 using panel and time-series data. Random effects model was used to examine how part-time workers affect labor productivity while the ARDL model was used to determine the effect of skills mismatch on unemployment and output gap. An average increase in part-time workers by 1 percent contributed to labor productivity increase by an average of 0.47 percent while an average increase in capital importation and the number of workers by 1 percent reduced labor productivity by an average of 0.02 and 0.94 percent respectively. It was also found that an average increase of 1 percent in skills mismatch and the number of youths contributed to an increase in unemployment by 13.61 and 2.32 percent respectively but real GDP contributes to unemployment decline by 0.07percent when it increases by an average of 1 percent. The nation’s output gap was found to increase by an average of 0.59 percent with an average increase in skills mismatch by 1 percent but reduced by 0.07 and 0.04 percent due to an average increase of 1 percent in capital formation and oil prices. The country should set up a department in the federal ministry of labor and employment that will ensure regular training of part-time workers and improve on their wages. There should also be a committee of the federal government, private sector and institutions of learning at the federal, state and local governments that will review educational curriculum at regular intervals to make skills acquisition in the country relevant to industry demand at the domestic and international level.
Vulnerability of Smallholder Maize Production to Climate Change and Adaptation Choices in Laikipia and Kitui Counties in Kenya
(Kenyatta University, 2023) Kabara, Millicent Akinyi; Martin Etyang; Perez Onono
Maize is a staple food for majority of Kenyans. However, unpredictable timing, frequency, duration, character and distribution of rainfall especially during the growing season and increasing temperatures are contributing to declining yields hence increased incidence of food insecurity. Inappropriate selection or application of adaptation choices could further contribute to low maize yields. However, vulnerability of smallholder maize production and levels of efficacy of adaptation is unclear. For Kitui and Laikipia counties in Kenya, the study investigated the extent and determinants of vulnerability of smallholder maize production to climate change. The levels of efficacy of adaptation of smallholder maize production to climate change were evaluated and determinants of the levels of efficacy were estimated. Data on demographics and socio-economic characteristics and adaptation choices was collected from smallholder maize producers using a questionnaire. Temperature data in degree Celsius was obtained from the Global Historical Climatology Network monthly dataset gridded version 4 while monthly rainfall data in millimeters was obtained from Centennial Trends Greater Horn of Africa precipitation dataset version 1.0. Exposure, sensitivity and adaptive capacity indices were derived based on factor analysis and combined to obtain vulnerability index. Determinants of vulnerability of smallholder maize production to climate change was estimated based on Ordinary Least Squares. The level of efficacy of adaptation was evaluated based on the Multiple Criteria Evaluation while ordered probit model was used to estimate the determinants of level of efficacy of adaptation. Results showed that most of the smallholders were in the lowest tercile. However, most of the smallholders in Kitui County were in the highest tercile hence more vulnerable than smallholders in Laikipia County. Longer maize shortage, prevalence of climate related diseases, stored water lasting shorter period and being single increased vulnerability while receiving accurate climate information and eating alternatives to maize decreased vulnerability. In addition, majority of smallholders in the study reported low levels of efficacy of adaptation. Smallholders likely to report high levels of efficacy undertook soil analysis, had more farming experience, accessed extension services, produced maize in communally owned land and applied multiple adaptation choices. The study recommends support from state and non-state actors to facilitate provision of input subsidies, accurate and timely climate information; support towards water harvesting and construction of maize silos at Ward level to minimize vulnerability. In addition, build the capacity of smallholders to undertake frequent soil analysis; apply multiple adaptation choices and procure appropriate resources to enhance efficacy of adaptation.
Effects of Public Debt on Investments and Interest Rates in Selected East African Community Member States
(2023-11) Maugu, Lenity Kananu; Julius Korir; George Kosimbei
East African Community member states have embarked on various strategies to promote investment in the region to accelerate economic growth. The Community has, through the East African Community Development Strategy, set out the priority programmes for the region focusing on macroeconomic cooperation; trade liberalization and development; cooperation in infrastructure; the development of human resources, sciences and technology. Despite these efforts, the private investment as per cent of Gross Domestic Product for almost all member states is below the level between 15 per cent and 22 per cent required to spur economic growth. Moreover, these countries voted to keep their interest rates low to bolster their economies. However, despite the many reforms, the interest rates are far much higher than in other countries in Africa, which are more developed. In an attempt to bolster investment, these states have increased public debt rapidly, exceeding the debt ratio of 50 per cent of Gross Domestic Product as provided in their treaty. However, the borrowed funds have not targeted value-creative economic and social projects, which can potentially outweigh the adverse effects of heavy indebtedness. The main objective of this study was to examine the effects of public debt on investments and interest rates in selected East African Community member states. Specifically, the study aimed at determining the effect of public debt on public investment, private investment and interest rate in selected EAC member states. The study used three theoretical frameworks; the debt overhang model, the classical theory of investment model, and the loanable fund model. The study used a descriptive panel research design. The dataset were drawn from secondary sources: World Bank’s World Development Indicators, Penn World Tables, Economic Surveys and Statistical Abstracts for the period 1980 to 2020. A dynamic common correlated effects approach was utilized to analyze objectives one and two, while the Panel Autoregressive Distributed Lag method was used to analyze objective three. The study established no relationship between public debt and public investment in the East African Region as one, but there was a negative effect in Kenya and Burundi and a positive effect in Rwanda. These results suggested that borrowed funds were not fully dedicated to public investment. Therefore, East African Community states' governments should strive to improve on this situation by channelling more of the borrowings to fund investments. Furthermore, the results showed that public debt did not influence private investment in the short-run. However, in the long run, it had a negative effect on private investments in five East African Community countries combined. These findings suggested that public debt crowd out private investments in East African Community. Therefore, it is advisable for East African Community states’ governments to employ mechanisms geared towards debt reduction. Besides, the governments should consider increasing and sustaining spending in sectors that complement private investment to stimulate the economy, such as investment in infrastructure and human capital. Finally, public debt was shown to positively affected the long-term interest rate in the five countries combined. These governments need to take effective measures to pursue fiscal discipline Additionally, EAC states can use concessional loans which have more favourable terms like lower interest rates, deferred repayments and income-contingent repayments.

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