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This collections contains bibliographic information and abstracts of Master theses and dissertation in the School of Economics held in Kenyatta University Library

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Adopted Technology and the Performance of Micro and Small Enterprises in Nairobi
(Kenyatta University, 2024-07) Kiprono, Michael Kirui
Micro and small enterprises around the world play an important role in spurring economic growth. In Kenya, the government introduced numerous policy approaches that targeted the development and promotion of Micro and Small Enterprises, most notably the Micro and Small Enterprises Act of 2012, which established the Micro and Small Enterprises Authority and introduced the Kenya Industrial Estate. Despite the efforts by mandated organizations and the government, studies indicate that 70 percent of Micro and Small Enterprises fail within three years, rendering their survival in the market space low. This was despite the efforts put in by the government of Kenya and other stakeholders to promote Micro and Small Enterprises in the country. Micro and Small Enterprises faced many challenges, including inadequate funding, low skill levels, infrastructure, political instability, and operating expenses. Technology and innovations were directly proportional to improvements in micro and small enterprises. Therefore, the study focused on adopted technology that businesses have employed, including the various technological tools, systems, and innovations that these enterprises have integrated into their operations to improve efficiency, productivity, and overall performance. The study was conducted in the Nairobi's City County. Various studies have been done on technology. However, these studies focused on market entry and technology adoption, with limited attention to the effect of technology on MSE performance. This study aimed to fill this gap by examining the effect of adopted technology use on the performance of MSEs in Nairobi City County. The study sought to ascertain the effect of marketing innovation, process and service innovation, product distribution innovation, and payment technology on the performance of micro and small businesses in Nairobi's Central Business District. The study's empirical model was based on the Cobb-Douglas production function. 270 Micro and Small Enterprises were selected from a target population of 752 in Nairobi's Central Business District, and the entrepreneurs were given a self-administered questionnaire. The questionnaire's reliability was established using Cronbach's alpha, which was 0.72. The collected data was analyzed, and diagnostic tests were performed to assess heteroskedasticity, multicollinearity, and normality. Some moderator variables, such as business management skills, gender, education, and number of years in operation were included in the model. Data analysis results revealed that marketing technology, process and service innovation, distribution technology, and payment methods innovation had a positive influence on the performance of Micro and Small Enterprises in Nairobi City County. Therefore, Policymakers were encouraged to push Micro and Small Enterprises to adopt technology-enabled marketing strategies. Providing incentives, training programs, and resources to help them establish and maintain an online presence.
Adoption of Green Energy and Testing the Presence of Environmental Kuznets Curve in Kenya
(Kenyatta University, 2024-05) Kibet,Geofrey Kiprono
Energy is a determinant of economic growth in any economy, but due to different sources of energy which are categorized into green and non-green energy, there is a need for the economy to reduce the use of fossil fuels and consider using more green energy resources. This is because the use of fossil fuels leads to environmental pollution due to Carbon dioxide emissions into the atmosphere. Reduction of fossil fuel consumption leads to reduction of Carbon dioxide emission into the atmosphere, hence leading to global warming mitigation. The use of Non-green energy sources causes environmental pollution which results in the reduction of social welfare. Since little is known about the relationship between economic growth and environmental pollution in Kenya, and also there was clear policy on rates of substitution between green energy and non-green energy in Kenya. This research project intended to estimate the Marginal rate of Technical Substitution between green energy and non-green energy in Kenya and to ascertain whether the Environmental Kuznets Curve on Carbon dioxide emission is present in Kenya. The study used the Instrumental Variable (IV) approach to estimate elasticities and finally determine the MRTS. The objectives of the study included; first, to test the presence of the EKC hypothesis in Kenya. Secondly, it was to determine the Marginal rate of technical substitution between green and non-green energy in Kenya. The study used secondary time-series data from the year 1964 to 2021 from various sources and adopted the VECM model for analysis. Empirical results revealed that the EKC hypothesis on Carbon dioxide emission exist in Kenya in the long-run and not in the short-run. In the long-run, as per capita GDP grows, the environmental degradation continues to decrease. The study also concluded that Kenya requires more investment in green energy infrastructure in order to replace non-green energy infrastructure without affecting GDP growth. Investing in green energy to promote the use of clean energy, in the long run, leads to sustainable economic development.
Agricultural Education, Training, and Smallholder Dairy Farmers’ Productivity in Kiambu County, Kenya
(Kenyatta University, 2024-04) Kabuga,Danson Muthendu
Dairy farming is a feasible investment for many small-scale dairy farmers in Kenya. However, the sector is far from reaching its full potential due to various factors that limit both participation and production. More than 80% of Kiambu County’s population depends on agriculture as its main economic activity. The sector is a key contributor to the welfare of the majority of the county’s population, having employed more than 1.28 million people either directly or indirectly. Notwithstanding, only 17.4 percent of the County’s revenue is contributed by the sector. There is, therefore, disproportionality between the number of people employed in the agricultural sector and the amount of income the sector contributed to the County's income. Despite the fact that agricultural sector is faced with numerous challenges, well trained and educated farmers may have efficiency advantage as well as be better prepared to cope with uncertainties that affects the sector (Asfaw and Admassie,2004). The existing literature generally fails to distinguish between effects of general education and effects of specific agricultural education and training towards smallholder dairy productivity. This study investigated the effects of specific agricultural education and training on smallholder dairy farmer productivity in Kiambu Sub-County, Kiambu County. The objectives of the study were to establish the effects of agricultural education and training on smallholder’s dairy farmers’ productivity in Kiambu Sub-County, Kiambu County. This study adopted a non-experimental research design and a human capital theory. Quantitative and qualitative data were collected. Primary data was acquired by administering structured questionnaires to the sampled smallholder dairy farmers. Purposive and convenient sampling was employed to select the sample of respondents. In addition to the Yamane (1967) equation, the sampling technique produced a sample size of 338 smallholder dairy farmers from four wards: Riabai, Tinganga, Ndumberi, and Kiambu Township. Quantitative descriptive and regression analysis techniques were utilized to analyze the data. The research findings established that agricultural training had a positive effect on smallholder dairy farmers’ productivity in Kiambu Sub-County. However, the study found no significant differences in milk productivity between those who studied agriculture in school and those who did not study agriculture. The lack of significant differences in average daily milk production between the two groups was attributed to the predominance of respondents with basic and secondary agricultural education levels, suggesting insufficient specific education on agricultural practices. The study concluded that agricultural training positively influences productivity of small scale dairy farmers in Kiambu County. This study recommends that small scale dairy farmers should seek agricultural training specific to dairy farming to enhance their dairy productivity. In addition, the county government and dairy farmers’ cooperation’s should prioritize training small scale dairy farmers to enhance their agricultural knowledge and competencies to increase milk production and optimally operate their dairy farms. On the other hand, the Ministry of Education should permit early specialization at the secondary level allowing secondary level students to specialize in crop farming or livestock farming, thus gaining intensive knowledge of agricultural practices such as dairying, which could result in higher milk productivity and better dairy farming practices.
Analysis of Buoyancy and Elasticity of Income Taxes in Kenya
(Kenyatta University, 2020) Ambale, Caren Akumu
Kenya, just like many developing countries is currently confronted by huge fiscal deficits, declining external assistance and huge debt service charges that are adversely affecting the country’s development process. The tax revenue in Kenya keeps performing poorly and unsteadily. The revenue collected from tax does not match the target which creates budget deficits. Increased spending needs and weakening revenue-raising capacities have together created structural budget deficits that have in turn brought about fiscal crises whenever a recession hits. Therefore, of concern to policymakers is how Kenya can attain revenue stability and be able to sustain public expenditures. To do this, there was need to determine buoyancy and elasticity of income tax revenue. It analyzed the buoyancy and elasticity of corporate and personal income tax in Kenya. The study utilizeddata1963 to 2018.The study used ordinary least square regression model to estimate the coefficients. Adjusting data for discretionary changes determined the elasticity estimates. Specifically, the study established that, corporate income taxes are highly buoyant to changes in the national income. This being the position, it is important to understand this relationship as it has a potential of contributing significantly to government revenue. Also, the study noted that buoyancy of personal income taxes were less than one implying that these taxes are inelastic. It is necessary for the government to put in place guidelines that would widen the tax base. The government should for instance put up measures that can be implemented to ensure that all corporations pay taxes due to them without tax evasion. The government should also create an environment conducive enough to facilitate Gross Domestic Product growth. This way, it will be possible to raise more tax revenue.
An Analysis of Crowding-Out of Private Sector by Government Borrowing in Kenya
(2022) Kinyua, Luke Wahome; Charles Nzai
The government of Kenya has been running budget deficits every year of its national accounting. The government has therefore been forced to borrow either from the domestic or external financial markets to bridge those deficits to offer its citizens services. Government borrowing creates other macroeconomic problems in the economy. The objectives of the research were to evaluate the determinants of government borrowing and the effects of that borrowing on private sector credit, the crowding out impact of state loans. Two models for each objective with clear variables based on economic theory were constructed for estimation where variables included government borrowing or domestic debt, budget deficits, lending rates, efficiency of tax agency, private sector credit and political factors. Data was collected from reports published by government agencies for period 1990-2021 and data analysis techniques included the Auto Regressive Distributed Lag model. Co-integration and unit root tests were done prior to analysis. Domestic government borrowing is determined by the level of budget deficit, domestic savings, inflation rate in economy and lending rates. Budget deficit and inflation rate were both found to positively and significantly determine government borrowing in the long-run, while else domestic savings and lending rate were found to be negative and significant in determining domestic government borrowing. The research findings on the impact of loans acquired by government on free enterprise economy capital in Kenya showed that domestic government borrowing negatively and significantly affect the level of private sector capital. The crowding out effect is huge as a percentage rise in loans acquired by government causes six percent of private sector investors crowded out of investment. Interest and lending rates were found to negatively and significantly affect private sector capital level. Based on the study findings, budget deficit should be minimized as much as possible by reducing unnecessary government expenditure. Similarly, domestic savings should be encouraged as this stimulates domestic investment due to availability of stock of capital for investment. Inflation rate should be maintained as low as possible below 5 percent in order to stimulate government borrowing. Lending rates should be kept low by central banks to increase lending by commercial banks as this ensures enough money is in circulation to facilitate borrowing and investment by the government in key sectors. Domestic government borrowing should be discouraged as much as possible, other sources of funds should be sort to finance expenditure such as health, infrastructural development, education and manufacturing. The study has demonstrated that state loans from local sources causes crowding out of the private sector investment and has also recommended ways through which state loans from local sources can be reduced to ensure private sector investment and spur economic growth of the economy
Analysis of import demand elasticities for Kenya: 1970 to 2013
(2015-01-28) Kamau, Penina Waithira; Wawire, Nelson; Makori, Steve
There was continued increase in imports volume and shrinking of exports. Due to government preoccupation with mobilizing external financial assistance, debt increased tremendously. The problem of growing population in Kenya, heavy importing and borrowing has led to current account deficit. Information on import demand elasticities was key to informing the tax policies that were to guide the taxation of imports and deciding optimal imports. The specific objective of the study were to estimate price elasticity of demand for imports, income elasticity of demand for imports and foreign exchange reserve elasticity of demand for imports The study analyzed the import demand elasticities using time series data from 1970 to 2013. Secondary data was used in the study. Data was collected from Central Bank of Kenya and Kenya National Bureau of Statistics documents. A multiplicative import demand function was estimated from which import elasticities were determined. The results show that income, relative price and foreign exchange reserve affect imports value. Long run elasticities were estimated and the coefficients of the variables were statistically significant expect for relative price. All the long run elasticities were found to be inelastic. Value of imports, relative price, income and foreign exchange reserve were co integrated in long run. The Kenya Revenue Authority can increase revenue collection from import duties. This was because import income elasticity for Kenya in long run was inelastic implying that imports responds to income is less than proportional. Export promotion policies should be encouraged as they increase foreign exchange reserves. This is because the results show that import demand respond to foreign exchange reserve. Borrowing efforts should be discouraged given that foreign exchange reserves elasticity was inelastic. This would improve balance of payments due to reduction in debts. Government can utilize imports of the previous period to forecast levels of tax revenue and also determine import behavior. This was because the lagged value of imports highly influences the demand of imports in Kenya. Key words: Import demand elasticities, GDP
An analysis of Kenya's trade experience with regional cooperation and integration under comesa
(2012-10-19) Muniu, Dedan Mugo
Regional Cooperation and Integration is highly regarded by many countries in the world, both the developed and developing countries. However, much as many leaders in the world enthusiastically embrace the idea of regional cooperation, some studies have shown that there are countries that do not benefit from the arrangements put in place especially at the beginning of these regional blocks. Other studies show that economies that adopt complete trade liberalization develop faster than those that join a regional trade body. In view of these arguments there arises a need to evaluate the position of Kenya in the country's adoption of trade liberalization policies in general and their application to the Common Market for East and Southern Africa (COMESA). To undertake this study, data are obtained from International Financial Statistics, Statistical Abstracts and other publications. Tests were carried out on the data, and estimation of the relationship between variables was done using Generalized Least Square method. Since some variables were correlated, estimation was repeatedly done leading to the dropping of some variables, and choosing of the best model. The results show that Kenya's participation in regional trade arrangements, in particular reference to COMESA, results in growth in trade. The government should therefore promote and strengthen trade arrangements with COMESA countries in order to reap more benefits that would result into further growth in trade between Kenya and other members of COMESA. Further, the government should lead the manufacturing and services sectors into investing in research focused on identifying other trade opportunities that have to be taken advantage of
Analysis of private domestic investment in Kenya.
(Kenyatta University, 2015-05) Okotti, Samuel Matendechere
Private domestic investment is one of the major contributors to economic growth and development in both developed and developing countries. In Kenya the ratio of private domestic investment to GDP has substantial fluctuations. These fluctuations in investment ratio and levels pose a challenge in formulating policies that lead to attaining the desired level of private domestic investment. The Government has been implementing different strategies to boost private domestic investment but it is not clear to which extent each strategy has affected private domestic investment. Policy uncertainty proxied by political instability also undermines private domestic investment in Kenya. This project aimed at studying the determinants of private domestic investment in Kenya from 1970 to 2012 capturing the political instability such as electioneering periods, different economic policies (i.e. the import substitution policy and the export promotion policies), and their impact on the growth of private domestic investment. The effects of elections were captured using a dummy variable for the election years and one year before and after elections. The accelerator model was modified to capture various factors relevant to Kenya in determining the level of the growth of private domestic investment. The test for a unit root was done on the time series data using the conventional unit root tests known as Augmented Dickey Fuller [ADF] unit root test procedure. The unit root test reveals that broad money supply, public investment and previous domestic investment variables under investigation are 1(1) while growth in private investment, real interest, growth in GDP and growth in domestic saving are 1(0). The results further indicate that in the long run the growth in GDP, previous growth in GDP, growth in domestic investment, and election were significant determinants of growth of the private domestic investment. Whilst real rate of interest, broad money supply, growth in public investment, previous period growth in domestic investment and dummy variable of were not significant determinants of growth of private domestic investment
An analysis of the determinants of rural household savings in Bondo district
(2012-10-17) Oriaro, Hellen Adhiambo
This paper investigates the determinants of rural household savings in Bondo district, Kenya. The endogenous variables examined in this study include: age, bank distance, dependency, education level, employment status, income, interest rate, wealth and urbanization. The urbanization variable was later dropped as it gave conflicting results. A total of 120 househol heads were interviewed and both qualitative and quantitative results were obtained. The main empirical findings of the paper are:- i) The most significant factor determining household savings is income. The other variables that were found to be significant are wealth, interest rate, employment status and education level. ii) Dependency was found to have a positive coefficient in Rarieda division. Thus, high dependency was found to reduce savings only in urban areas but in the rural areas, a positive relationship was found to exist between savings and dependency. iii) Education motive was found to be the most important motivation for household savings in Bondo district. iv) Businesslike occupations contributed more to rural household savings than wage employment. v) Contrary to expectations, bank distance was found to have a positive coefficient, implying that the long distances to the saving institutions encouraged savings in the rural areas. vi) Wealth may not encourage savings in rural areas. Based on these findings, it was suggested that rural househols savings could be increased through:- i) Promotion of non-wage occupations in rural areas ii) Encouraging the wage earners to engage in businesses that would boost their income levels. iii) Implementation of savings policies at lower levels such as the divisional and locational level. iv) Promotion of public awareness programmes by financial institutions. This would lead to increased awareness by the rural folk on the advantages of financial savings.
Analysis of the Relationship between Expenditure on Oil Imports and Public Spending on Selected Social Services in Kenya
(Kenyatta University, 2019-07) Imbogo, Zakayo Goddard N.
Since independence, oil imports in Kenya have been rising mainly to sustain the nascent transport, manufacturing, energy, agriculture and maritime sectors among other uses in the country. The growth in the country’s oil import bill has however been closely related to public spending in the health and education sectors which experienced shocks owing to the growth in expenditures apportioned to the rising volume of oil imports. Given the significance of the social pillar of the Kenya Vision 2030 and the inconsistency in the progress towards achieving the Sustainable Development Goals, which is inherent in the Kenya Vision 2030, understanding the linkages between the aforementioned trends in expenditures can help in explaining the progress towards attaining the education and health facets of the social pillar. The purpose of this study was to analyze the relationship between aggregate expenditure on oil imports and government expenditures on health and education. The specific objectives of this study were to: estimate the relationship between the aggregate expenditure on oil imports and government expenditure on health; and estimate the relationship between the aggregate expenditure on oil imports and government expenditure on education. The data used was annual aggregate expenditure on oil imports; government expenditure on health; government expenditure on education; exchange rate; and oil prices. The data was sourced from Kenya National Bureau of Statistics, Central Bank of Kenya and World Bank. The study employed granger causality and correlation analysis on the annual time series secondary data spanning 55 years from the year 1963 to 2017. The findings of the study revealed that there exists bi-directional causality between government expenditure on health and aggregate expenditure on oil imports on one hand; and a unidirectional causality running from government spending on education to aggregate expenditure on oil imports on the other hand. They are therefore not independent of each other. The findings were based on standard Chi-square tests and F-tests and revealed that there were causal relationships between the pairs of expenditure variables both in the long-run and short-run. The increase in government expenditure on health and education is however a measure to cushion the society from any education and health related adverse effect following an increase in expenditures on oil imports. On the other hand, education and health sectors are key in the upward surge of oil import demand which in turn increases expenditures on oil imports in the country. The increase in government spending on health and education is also attributed to oil price shocks and exchange rate variations in a situation that can not only lead to inflation but also the prices of imports in the country. The general increase in the prices of goods and services in the country forces the government to increase spending in the health and education sectors to prevent a social crisis. While the rise in the volume of imported oil seems indispensable, the government needs to focus on the increase in the prices of imports that is triggered by exchange rate fluctuations as well as the inflation that is triggered by global oil price shocks.
An analysis of the relevance of the monetary approach to Kenya's balance of payments (1969-2002)
(2012-10-17) Waweru, G. M.; Njuguna, A. E.; Obere, Almadi
Balance of payments deficits have been a common phenomenon in the Kenyan Economy from the 1960s. The government has over the years enacted various policy measures aimed at remedying the situation, however the balance of payments situation does not seem to have improved despite these policy measures. This study examines the relevance of the monetary approach to the balance of payments in Kenya using annual data covering the period 1969 to 2002. The monetary approach is one of five approaches to the balance of payments. The others are the Keynesian, elasticity, absorption and the portfolio balance approaches. According to the monetary approach, the balance of payments is essentially a monetary phenomenon. To carry out the study data, from the International Financial Statistics yearbooks and the May 2003 CDROM is used. The data is tested for unit root tests and co integration, among the variables established and thus a vector error correction (VEC) model is estimated. The results of the VEC estimation indicate that BOP is significantly affected by its own second and third lags, the first and second lags of exchange rate and the first lag of prices. Granger causality tests show no causality between balance of payments and the other five variables. However impulse response analysis indicates five years as the period within which balance of payments responds to innovations. Domestic credit and interest rate are the two important variables affecting Kenya's balance of payments. Exchange rate and prices are also significant. The study finds the monetary approach relevant in managing Kenya's balance of payments.
Analysis of the Value Added Tax and Household Final Consumption Expenditure in Kenya for the Period 1990 - 2014
(Kenyatta University, 2017-07) Kathure, Imaana Finnian
Household final consumption expenditure (HFCE) is the largest constituent of Kenya’s Gross domestic product, representing overall around 60 per centof Gross domestic product.Moreover, consumption is a major impelling cause of Kenya’s economic growth. HFCE growth has been increasing with increasing growth of value added tax (VAT) revenue for most years.Moreover, growth of value added tax revenue hasbeen increasing more rapidly between financial years 2012/2013 and 2014/2015 due to the introduction of the new VAT Act 2013 which saw the list of exempt and zero rated goods and services reduce. With the rising growth of VAT revenue, growth of private consumption expenditure is likely to reduce in the future leading to reduced economic growth. The motive of this study was to investigate the impact of VAT on household final consumption expenditure in Kenya from 1990 to 2014. The study employed Vector Error Correction (VEC) technique to investigate the dynamic response of household final consumption expenditure growth in Kenya due to shocks in growth of VAT revenue, growth of disposable income and growth of inflation rate.Granger causality test was done to enlighten on the relationship between value added tax revenue and household final consumption expenditure in Kenya. The study used quarterly time series data from 1990 to 2014. The analysis revealed that value added tax revenue growthmoderately affects HFCE growthin Kenya. The study also found that increasing VAT revenuegrowth curtailed household final consumption expenditure growthin the shortrun but stimulated household final consumption expenditure growth before stabilizing itin thelong-run. These effects was statistically significant. Additionally, growth in household final consumption expenditure and growth in value added tax revenue do not granger cause each other. The study concluded that the government should look for other ways of raising VAT revenue instead of increasing the tax base. For instance, KRA should fully institutionalize ETR machines into its system and that the government should focus on ensuring that all traders have the machines and are well trained on how to use them to help seal loopholes of remitting VAT revenue by the traders.
Applicability of lintner's dividend policy to companies qouted on the Nairobi stock exchange
(2011-08-25) Ikame, Raphael Muigai; Khakame, E. W.; Wawire, N. H. W.
Distribution of profit through dividends is a problem unique to companies due to segregation of management from the ownership. In 1956, John Lintner laid the foundation for modern understanding of dividend policy a model that has been used over the years to explain companies' dividend policies. Researches done in the developed world provide insights into the dividend policy of companies based on Lintner's earlier findings. In the developing world however, few studies on the dividend policies of companies exist. More research is therefore required to understand the dividend policy of companies in the developing world and in particular, Kenya. This study examined whether companies quoted on the Nairobi Stock Exchange follow Lintner's model in their dividend policies and planning as is the case in the developed world. In which data from the 48 Nairobi Stock Exchange (NSE) quoted companies for the period 1998 to 2004 was used giving a 336 firm-year data. The data was analyzed to ascertain applicability of the model. The research indicated that on average, NSE companies paid 59.4 percent of their net earnings as dividends and had a dividend yield of 6.1 percent. Also, it emerged that the NSE companies while declaring dividends to be paid in any particular period did not apply the Lintner's dividend model
Budget Deficit Financing and Exchange Rate Volatility in Kenya
(2014-03-10) Kirui, Benard Kipyegon; Kimani, Tom Mburu; Wawire, N. H. W.
This study was motivated by over a quarter of a century of exchange rate volatility, the persistent problem of budget deficit in Kenya, and the importance of the two in the economy, which explains their inclusions in the convergence criteria for the East Africa Community. Exchange rate volatility exposes the participants of international markets to the risk of loss and thus disturbs the optimal allocation of resources. Despite effort made by past studies to explain exchange rate volatility, there exists controversy in their findings, with a counterargument being provided for each assertion. This study attempted to improve on the modelling of volatility in exchange rate in order to best explain its movement. This was done by analysing the effects of using the financing composition of budget deficit instead of budget deficit in modelling of exchange rate volatility. Thereafter, the model that provided the best fit and forecast were applied to determine the effects of budget deficit financing and macroeconomic fundamentals on exchange rate volatility under different exchange rate regimes. Monthly data spanning the period 1973:01 to 2005:12 for the following variables: exchange rate volatility, interest rate differential, inflation rate differential, domestic nominal interest rate, money supply differential, net foreign assets and productivity differential were used to achieve these objectives. The study tested for structural breaks and aggregation of variables problem then applied the VAR estimation technique to the model which offered the best fit. VAR results were used to explain the effects of macroeconomic fundamentals on exchange rate volatility. The results of impulse response functions and variance decomposition revealed that shocks to productivity differential, inflation rate differential, and to a lesser extent, the interest rate differential and the net foreign asset are the main drivers of exchange rate volatility in Kenya. The analysis of the results revealed a stronger medium- to long-term causality linkage from macroeconomic volatility to exchange rate volatility than the other way around. This was evidenced by bidirectional causalities between productivity differential, inflation rate differential, and to a lesser extent, the interest rate differential on one hand and exchange rate volatility on the other. The net domestic financing of budget deficit had positive effect, while the net foreign financing of budget deficit had negative effect. The study concluded that there is no aggregation problem in budget deficit. However, the model with the financing composition of budget deficit provided the best fit and the macroeconomic fundamentals successfully explained exchange rate volatility.
Capital Mobility and Investment in the East African Community for the Period 1999 - 2012
(Kenyatta University, 2015) Mutua, Fridah Joy Karambu
The East African Community (EAC) is a regional economic integration grouping which comprises of Kenya, Uganda, Tanzania, Rwanda and Burundi as member states. This trading bloc was established through a treaty and also on the account of ratification by the parliaments of the member states on ao" November 1999 and came into full force on 7th July 2001. The purpose of the EAC was to bring about economic, political, social and cultural integration in order to allow for augmented trade, investment and economic growth. In addition the EAC Industrialization Strategy for years 2012 to 2032, for instance required that the intra-regional exports relative total manufactured imports for the trading bloc to grow from 5% to approximately 25% by 2032. At the same time the growth of manufactured exports in relation to total merchandise exports from an average of 20% to 60% amongst other objectives However the East African Countries suffer from low savings rates, the bond market which is immature, a small investor base, and the secondary markets that experiences a lot of illiquidity. The ease of doing business rankings indicated that the East African countries were not an attractive investment destination in spite of the many reforms which have been undertaken. Moreover this was also reinforced by the Global Competiveness report 2013 hence the need for the EAC to develop policies that facilitate its own citizens to invest in this trading bloc. Capital mobility on the other hand is an avenue, which can be used to ascertain the above goals are achieved. Capital mobility will permit the flow of funds across countries which in turn will facilitate investments to be undertaken therefore augmenting these countries economic growth. For this reason numerous studies have been carried out using Feldstein Horioka Hypothesis as theoretical framework and with different methodologies to measure the level of capital mobility in Africa. The objective of the study was to evaluate the level of capital mobility in EAC, and to determine the drivers of investment in EAC using the data collected from the World Bank for period 1929 to 2012. The study employed the Panel data fixed effects (PCSE) model and found out that there was moderate capital mobility in the EAC trading bloc. In addition the key financiers of domestic investments are the domestic savings, foreign aid, FDI and government expenditure. Moreover openness of the economy and the level of capital mobility facilitated the absorption of new investible opportunities in the EAC.
A case study of marketing systems for beans in Machakos district
(2012-05-18) Katheka, John
Agriculture remains the mainstay of the economy of Kenya. It not only tops the list of foreign exchange earnings for the country but is also the source of livelihood in terms of food production in the country. Beans are second only to maize as a source of food in Kenya. This study, which consists of six chapters, looks at the marketing systems for beans in Machakos district of the Eastern province of Kenya. Eastern province is the major bean producer in Kenya and Machakos is one of the leading districts in the production of beans in the Province (see Appendix III). Mostly small-scale farmers grow the crop by intercropping it with other crops, for example maize. The district lies between high and low potential zones. The high and medium potential areas are the surplus bean areas while the low potential areas are the deficit bean areas. The research problem addressed to by this study is mainly the lack of information on bean production and marketing in Machakos district in particular and Kenya in general. The specific objective of this study is to describe the marketing systems for beans in Machakos District and to identify the factors affecting the marketing efficiency. Both primary and secondary data are used. The primary data was collected through questionnaires and is used for empirical results in Chapter five. The secondary data is incorporated in chapter one. Descriptive and frequency tables and multiple regression results analyses are presented in Chapter five, which discusses the results. Chapter six gives the summary and conclusions of the study findings. The chapter also suggests some policy recommendations, which could be implemented to improve the production, consumption and marketing of beans in Machakos district in particular and Kenya in general.
Changing Political Regimes and Performance of the Nairobi Securities Exchange
(Kenyatta University, 2015-02-06) Musimbi, David
The stock market all over the world play a critical role as one of the most sensitive indicators of the business cycle and one of the most influential variables in. the government index of leading economic indicators. Companies quoted on the Nairobi Securities Exchange have been undergoing turbulent times due to fluctuation in the prices of shares, consequently affecting investors either way and hence making them uncertain about the future. This study, first sought to evaluate the effect that political regime changes have on returns that investors get on Nairobi Securities Exchange. Secondly, the study determined the effect of political regime change across different market segments. Published time series quarterly data was sourced from the Central Bank of Kenya. Kenya National Bureau of Statistics and Nairobi Securities Exchange data bases. In order to achieve all the specific objectives a regression model, and threshold generalized auto regressive conditional heteroscedasticity models were used to ascertain the volatility of stock returns. Empirical results of the regression model revealed that there was a weak relationship between changing political regimes and the performance of the NSE. Also the study found out that different political variables affect different market segments differently.
Characteristics and the impact of rotating savings and credit associations on the growth of micro and small enterprises in Nairobi-Kenya
(2011-12-29) Mbwiria, Esther Kathure
Micro and Small Enterprises (MSEs) promotion in Kenya is a viable and dynamic strategy for achieving National goals such as poverty alleviation. In recent years the sector has gained widespread recognition. However, the sector has continually faced several constraints to growth and development. One of them being financial due to limited access to credit facilities. A number of informal micro-finance institutions have come to the rescue of MSEs in access to credit. One such institution is Rotating Savings and Credit Associations (ROSCAs). ROSCA is an indigenous organization of a group of people who make regular contributions to a fund, which in turn is given in whole or in part to each contributor in rotation. The purpose of this study was to examine the impact of ROSCAs on the growth of Micro and Small Enterprise in Nairobi. Though the number of ROSCAs is generally on the increase among citizens, little research has been done on their impact on the growth of MSEs. The study is important because the findings will provoke interest and encourage the various stakeholders to provide an enabling environment for the growth of the sector. The study is descriptive survey that sought to evaluate the impact of this type of credit to growth of MSEs. It was conducted in Nairobi and selection of the sample, involved a combination of techniques, viz. cluster, stratified random sampling, simple random, and snowballing. A sample size of 130 MSEs and seven, ROSCA groups were selected. Data was collected through personal interviews incase of individual enterprise owner-manager, and direct administration in case of ROSCA groups leaders. In addition to ROSCA - member enterprises interviewed, 49 nonmember enterprises were also interviewed to establish reasons why they have not joined or formed ROSCAs. Both qualitative and quantitative data were collected. Descriptive statistics, with in-depth content analysis, were summarized under common themes and presented in form of tables, frequencies and percentages. The findings indicated that ROSCA credit was mainly used in the following areas: buying stock (82% of the respondents), buying assets (62%) and domestic activities (58%). As a result of credit intervention, respondents reported improvement in income, with a positive change ranging from 8% to 500% increase with an average of 115.3% Other changes included savings (82.3%), sales (57.7%), assets/stock vi (54.6%), market skills (52.3%) and employing more workers (46.2%).Management practices and working capital also improved. The enterprises registered a minimal horizontal expansion through opening of new enterprises and business diversification. Only 11.5% of the respondents reported opening new branches on acquiring loans from ROSCA groups. However, no enterprise reported vertical growth, i.e, none changed from micro to small, or small to medium. Other changes reported included improvements in entrepreneurial skills, networking, and family welfare, among others. Nevertheless the enterprises reported a number of constraints, which may have contributed to minimal growth in the enterprises. These included limited amount of working capital, lack of suitable premises, economic uncertainties, lack of adequate equipments for manufacturing enterprises, and socio- political factors, among others. The main reasons given as to why some enterprise owners did not join or form ROSCAs include conflicts, gossips, small loans and negative attitudes. Some respondents, especially men, said that ROSCA micro-finance is highly for women. In conclusion, the ROSCA micro-finance system / network were found to be effective in assisting the Micro and Small Enterprise to progress and reach some measure of growth. It is therefore recommended that ROSCA groups should be supported and strategically used to promote self-reliance and to help the economic viability among the individuals who source this type of credit. Aggressive dissemination of information regarding ROSCAs as a source of credit should be done in order to promote this type of microfinance.
The characteristics of the poor people in rural Kenya. a case study of Kisii central district
(2012-04-17) Sevelius, Barongo Yophen
All countries worldwide view poverty as an enemy to development. This is why governments' efforts are directed towards the alleviation of poverty. In Kenya, poverty has been and still is one of the main problems facing the country and particularly in rural areas. To achieve any sustainable economic growth and development in Kenya, is important to alleviate poverty in rural areas , but first by understanding the major causes of poverty in rural areas even in areas with agricultural potential like Kisii Central District. The purpose of this study was to investigate the characteristics of the poor people in rural Kenya. The setting of the study was Kisii Central District. The respondents consisted of 64 rural households. Data were collected through the questionnaires and interviews. Out of the total 64 households, 37 were classified as poor and 27 were classified as rich by using food consumption expenditure to total income ration method. The study sought to find out the characteristics of the poor in rich agricultural Kisii Central District. Descriptive statistics were employed in the analysis of the collected data. The results revealed that large family sizes, lack of enough land, high illiteracy level, lack of access to rural credit facilities, theft of the farm produce, and diseases especially malaria were some of the characteristics of the poor in Kisii Central District. The policy recommendations suggested by the researcher included: the government and NGOs to promote literacy level in rural areas, provision of rural credit facilities to the farmers, reduction of large family sizes through the spread of education on the importance of having small family sizes, spread of education on how to control malaria and punishing heavily all those caught stealing farm produce.
Community Empowerment and Child Marriage in Kilifi County, Kenya
(Kenyatta University, 2020-09) Wanyeki, Joyreen Wambui
Child marriage is a familiar phenomenon in many countries in Africa and Asia. It is a harmful traditional vice, a human rights violation which not only denies young girls a choice on whom to marry, but also exposes them to psychological, social, health and economic risks. Globally, girls from impoverished households are more likely victims of child marriages. Further combined with traditional practices and beliefs, poverty gives education preference to boys in situations of economic constraints. In Kenya, an estimated 23 per cent of girls are married off before 18 years. Kilifi County records the highest prevalence of child marriage with 47.4 per cent of girls married off before the age 18 years. Civil Society organizations in collaboration with the Government of Kenya are actively working towards reduced child marriages through awareness creation on the adverse consequences, presenting viable alternatives and advocating for implementation and enforcement of existing laws prohibiting it. However, several communities proceed with this practice. To better understand the social patterning of child marriage in Kenya, this research targeted Kilifi County. Guided by a model of child marriage, the study explored the effects of community empowerment on child marriage in Kilifi County, Kenya through four specific objectives that explored: the factors influencing child marriage; the effect of knowledge empowerment on child marriage; the effect of scholarship empowerment on child marriage; and the effect of economic empowerment on child marriage in Kilifi County, Kenya. The study adopted a cross-section research design and was informed by primary data obtained through in depth interviews. The study was carried out in Magarini Sub-county, Kilifi County leveraging multi stage sampling design. Research findings indicated that Knowledge empowerment, age at first got married, household composition, access to financial support services (Economic empowerment), access to school feeding programs, access to monetary support to facilitate education, accessibility to schools (Scholarship empowerment) and household incomes, significantly influence child marriage decisions in a household. Based on the findings the study recommendations are :more awareness creation initiatives around abuse reporting channels and legal laws around child marriage, accommodation of interested child brides into the education system either though adult literacy or vocational training programs, access to more favourable and context based financial support initiatives as well as community participation in development through enhanced citizen participation. The study identified gaps in the link between child marriage and devolution as well as climate change, and recommended for further research on the impact of devolution and climate change on child marriage.

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