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Item Adoption of Green Energy and Testing the Presence of Environmental Kuznets Curve in Kenya(Kenyatta University, 2024-05) Kibet,Geofrey KipronoEnergy 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.Item Analysis of private domestic investment in Kenya.(Kenyatta University, 2015-05) Okotti, Samuel MatendecherePrivate 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 investmentItem Analysis of the Value Added Tax and Household Final Consumption Expenditure in Kenya for the Period 1990 - 2014(Kenyatta University, 2017-07) Kathure, Imaana FinnianHousehold 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.Item Capital Mobility and Investment in the East African Community for the Period 1999 - 2012(Kenyatta University, 2015) Mutua, Fridah Joy KarambuThe 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.Item Community Empowerment and Child Marriage in Kilifi County, Kenya(Kenyatta University, 2020-09) Wanyeki, Joyreen WambuiChild 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.Item Diaspora Remittances, Human Capital Investment and Economic Growth in Kenya(Kenyatta University, 2016-07) Mang'eli, Mary MutindiAn increasing interest in the topic of Diaspora remittances has developed over the past few years on the part of academicians, donors, international financial institutions, commercial banks, money transfer operators, microfinance institutions, and policy makers. This is because in many developing countries, remittance payments from migrant workers and businesses are increasingly becoming a significant source of external finance. Between 2007 and 20 II, Kenya's annual remittances increased by fifty five percent from USD 574 million in 2007 to USD 891 million in 2011. This study aimed to establish the effect of Diaspora remittances and human capital investment on Kenya's economic growth and to establish the causality between Diaspora remittances, human capital investment and economic growth in Kenya. The study used time series data from 1980 to 2013. The data used was collected from the World Bank's African Development Indicators. The ordinary least squares method was used to establish the effect of diaspora remittances and human capital investment on economic growth. Granger causality test was used to determine the direction of causality between economic growth and human capital investment and also between economic growth and Diaspora remittances. The study recommended that the government should promote policies that favor the inflow of Diaspora remittances to Kenya and also improve on human capital investment in the country so as to realize increased economic growth.Item Effect of Climate Variability on Output and Yields of Selected Crops in Kenya(Kenyatta University, 2016) Kariuki, George MbuguaItem Effect of Energy Price Liberalization on Economic Growth in Kenya (1980 – 2014)(Kenyatta University, 2016-11) Luta, Victor MaseseThe main purpose of this study was to determine the effect of energy price liberalization on economic growth in Kenya. Energy sector is an important component of economy, and just like other goods and services, energy price affects its demand, supply and use. The use of energy is embedded in the production function that leads to economic growth. In Kenya, the energy sector contributes about 9.49 percent of GDP with the petroleum sector, electricity sector and fuel wood sector contributing 8.4 percent, 0.6 percent and 0.49 percent respectively. Kenya has initiated a number of reforms to stabilize and promote fair price and efficiency of energy in the economy. Kenya introduced several economic reforms such as energy sector reform of energy price liberalization to promote its economic growth by stabilizing supply and prices of energy and by creating a competitive energy market. Despite implementing these reforms, the Kenyan economy has not experienced double digit rate of economic growth (Ministry of Planning and National Development, 2007). The objectives of the study were to investigate the effects of energy price liberalization on economic growth in Kenya and to find out whether there was a significant difference in stability of energy price during the period of liberalization of energy price and the period of no liberalization of energy price. The study used secondary data covering a period of 35 years from 1980 to 2014. The study extracted data from the Kenya’s Statistical Abstracts of 1980 to 2014. The study used several methods of diagnostic tests such as Augmented Dickey Fuller unit root test, Phillips-Perron unit root test, Ramsey test, Jarque-Berra test and Durbin Watson test. Phillips-Perron unit root test and Durbin Watson test were used to assure robust model estimation. Stability tests found that there was significant difference in the stability of energy price before and after the liberalization of the energy price. OLS regression estimates indicated that energy price liberalization had a negative effect on economic growth in Kenya. The coefficient value of the dummy variable was -0.1607 with a probability value of 0.0367 and suggested that energy price liberalization was significant in explaining economic growth in Kenya. The study recommended reevaluation of energy sector reform of energy price liberalization and also encouraged implementation of reforms in other sectors of the economy.Item Effect of foreign direct investment on employment and welfare in Kenya(Kenyatta university, 2023-11) Mwangangi, Cornelius Malinda; Steve MakambiThe principal external source of finance for emerging nation is foreign direct investment. Throughout the last 10 years, Kenya has managed to attract a significant amount of FDI which could be due to incentives and stable investment environment which attract foreign investors. However, while attraction and inflow of FDI has been observed, it is not clear whether FDI translates to improvement of employment and welfare. Effectiveness of FDI can either be felt directly or indirectly which include technology transfer, spillovers, employment opportunities, training of laborers among others. Ultimately the study aims to examine the effect of foreign direct investment on employment and whether it translates to improvement of welfare in Kenya. Specific objectives include:(i) to examine the effect of foreign direct investment on employment in Kenya; (ii) to determine the effect of foreign direct investment on welfare in Kenya. Welfare was approached from two perspectives which included the human development index and the gini index. Secondary time series data used was retrieved and compiled from the following databases which included World Bank, the United Nations Development Programme, and the yearly economic surveys conducted by the Kenya National Bureau of Statistics all between 1990 to 2020. Several diagnostics tests were run which include; unit root test, cointegration bound test, autocorrelation test, test for normality, heteroskedasticity test, omitted variable test and model specification test. To address the first objective and the second objectives of the study the ARDL model was used to investigate the effect of FDI on employment and welfare in Kenya. The following conclusion were made from the study; First, HDI was a better measurement of welfare compared to the gini index since FDI, savings, inflation, and GDP have an effect on HDI and on the other hand only savings had an effect on the Gini index. Second, since there exists a negative relationship between FDI and HDI in the short run there is need for government intervention in order to curb the negative effect to avoid compromising education, per capita income and life expectancy. Also, the study concluded that FDI plays a major a role when it comes to employment creation and improvement of long term and short-term welfare in an economy. The study made recommendations on the following; First, the ministry of investment, trade and industry should make the investing environment more friendly to foreign investors, second, to reduce the cost of investment licenses and setting up companies, third, the government of Kenya should maintain a stable political environment, fourth, the government should constantly revise their policies to protect domestic companies from foreign companies and finally the government should channel FDI inflows into investments projects that favour the poor in order to improve welfareItem Effect of Inflation on Minimum Wages in Kenya(Kenyatta University, 2015) Dayan, PeterItem The effect of public debt on private investments and economic growth in Kenya (1980-2013).(2015) Kamundia, Susan .W.; Gitahi, Stephen; Mwilaria, ShadrackThe Kenya vision 2030 aims at achieving a 10 percent per annum growth rate in the economy. Investments have been identified as a major channel through which this objective can be met. The government has undertaken various public investments to fuel economic growth. However, for this to be even more effective, private investments have to be taken into consideration. The government has taken various measures such as relying more on external debt to avoid crowding out private investments and consequently promote economic growth. Despite these efforts, private investments and economic growth have remained low. This study aims at finding out what the effect that public debt has on the level of investment and consequently on economic growth. The study will use time series data from 1980 to 2013. Autoregressive Distributed Lag modelling will be applied in the estimation of the model as it works with both I (0) and I (1) variables. Granger causality test will be used to determine the presence and direction of causality between public debt and economic growth.Item Effectiveness of Monetary Policy on Inflation Control and Economic Growth in Kenya: An Application of Factor Augmented Vector Autoregressive Model(Kenyatta University, 2019-06) Kinya, IdahThe question of the effectiveness of monetary policy (MP) on inflation control and economic growth is a long-standing issue in the literature of monetary policy. Despite immense research, most researchers and policy makers still remain divided on effectiveness of monetary policy and the appropriate choice of monetary policy instruments, targets and framework. This follows enormous divide in empirical findings on the subject in both developed as well as developing countries. This problem is more pronounced in developing countries which not only have underdeveloped financial markets but also lack appropriate tool to model their economies. This study seeks to complement existing literature by further examining effectiveness of monetary policy in Kenya using a Factor Augmented Vector Autoregressive Model (FAVAR) 1997 to 2015. The study examines the role of money supply, exchange rate and the repo rate in the inflation and real sector dynamics. The specific objectives were to determine the impact of repo rate innovations on price stability and Gross Domestic Product (GDP), the relationship between Money Supply, price stability and GDP and the effect of exchange rate fluctuations on price stability and GDP. A FAVAR model has several advantages; first it can handle poor quality data and is able to control for little information problem. The study found that repo rate has a negative effect on inflation. The response of inflation is instantaneous and the decrease in inflation only recover at seventh quarter. The study also found that money supply, price stability and GDP have a long run relationship. However, the study found that exchange rate fluctuations had insignificant effect on price stability and that the effect of exchange rate fluctuations on GDP was unstable, oscillating form negative to positive. The study concludes that repo rate is effective in controlling inflation but ineffective in stimulating economic growth. Therefore, the finding implies that Central Bank of Kenya (CBK) should use repo rate to control inflation. The study also shows that there exists a long run relationship between GDP, money supply and inflation implying that the Central Bank of Kenya should take into consideration the long run impact on GDP when designing tools to control inflation. The study findings also imply that exchange rate is not an effective monetary policy tools to control inflation and stimulate GDP growth. Hence, the CBK should not target exchange rate in the management of the economy.Item Effects of East African community customs union on trade and economic growth in Kenya(Kenyatta University, 2015) Boiwo, Silas TuitoekDuring the 1990' s the world experienced a new wave of regional integration agreements (RlAs) that reached unprecedented proportions. The increasing importance of regional integration agreements and in particular their extraordinary expansions during the 1990's are among the most salient developments of the international trading system and its believed to be a vehicle for the promotion of trade and economic growth. The main driver for increasing number of Regional Integrations Agreements on the African subcontinent is the need to increase regional co-operation by creating a unified economic bloc and building blocs for stronger integration between member countries that will eventually lead to the creation of an African Economic Community. The East Africa Community was resurrected in 1999 which was transformed to a custom union in the year 2005. One of the objectives of the custom union was aimed at improving trade between the member states. To facilitate this, transitional arrangements have been put in place to liberalize inter and intra-regional trade among the partner states. The objectives of this study were to determine the trade effect of the EAC custom union and to analyze the effect of intra-EAC trade on economic growth in Kenya. Time series data for the years 2000 to 2013 was used for analysis. The coefficient of the EAC dummy used to measure the effect of custom union was found to be statistically significant and positive. This finding shows that after the formation of the custom union, the volume of trade in Kenya has increased proportionately by 0.9083 percent. For the effect of the custom union on Kenya intra-EAC trade, the EAC dummy coefficient was also found to be positive and statistically significant. This means that after the formation of the custom union, the GDP of Kenya has proportionately increased by 0.6214 percent. The study revealed that the formation of the EAC Custom Union has had positive effect on trade and economic growth in Kenya. The findings also show that after the formation of the custom union, increase in the volume of trade for Kenya has been realized. Therefore the formation of the EAC· customs union is an important step in the process of deepening regional integration among the member states.Item Effects of Fertilizer Subsidy on Coffee Production and its Influence on Technical Efficiency in Mukurwe-Ini, Nyeri County, Kenya(Kenyatta University, 2019-06) Mathagu, Samuel WandetoCoffee production plays a key role in Kenya‘s economy. It contributes to foreign exchange earnings, food security, household income and employment creation. In Kenya, it is a major cash crop ranked third after tea and horticulture. Coffee productivity has been declining partly due to various reasons such as low use of inputs, poor cooperatives management, and market problems (Bichanga & Kabaka, 2013). In the literature, loss of soil fertility is considered a major cause of declining coffee productivity, hence the need for planned replenishment of the depleted soil nutrients. High prices of retail fertilizer limits its use by farmers and the Kenyan government has addressed the challenge by introducing fertilizer subsidy program since 2006. The program targets increased production of coffee and other crops through accessibility of cheaper fertilizer input. Despite the intervention policies, coffee productivity remains low in Mukurwe-ini sub-county. However, it is not clear what contributes to decline in yields in the county, and whether the coffee production is efficient or not. The study sought to determine the effects of fertilizer subsidy on coffee yields, and to determine the technical efficiency in coffee production in the context of fertilizer subsidy in Mukurwe-ini sub-county. Non-experimental research design was be used where stratified random sample provided data for the study using questionnaires. The multiple regression analysis and maximum likelihood method was applied to estimate the stochastic frontier production function. Multiple regression analysis revealed that fertilizer subsidy has a significant influence on coffee production. An increase in one 50kg bag of subsidized fertilizer would result to 0.191074 Kgs increase in coffee yields per bush. SFA analysis revealed that fertilizer subsidy has a significant effect on the technical efficiency. The technical efficiency for the individual farmers was found to range between 10.44% and 95.15% with a mean of 77.87%. The results revealed that about 76% of the coffee farmers were operating above 70 percent or more technical efficiency levels. Additionally, about 94% of the coffee farmers were operating at a technical efficiency level of above 50%. However, there were still a room for improvement and the frontier level was not achieved. The observed inefficiency was found to be associated with age, gender, education level, cooperatives‘ management, manure quantity and fertilizer availability.Item Effects of Foreign Remittances on Human Development in Kenya(Kenyatta University, 2023-07) Musyimi, Daniel Mutuku; Peter Ng'ang’aThe sole purpose of every government is to improve the welfare of its citizens. That is; to have high standards of living, quality education, good health and a quality general wellbeing. When a country thrives in human richness, then the country can be predicted to be on the rig!l( trajectory of achieving sustainable development goals. The Kenya scenario is no exception because the government has been striving to improve the welfare of its people. Though there has been increase in human development progress in Kenya from 0.468 human development index in 1990 to 0.575 human development index in 2021, the increase is relatively low compared to countries with very high and high levels of human development. Kenya is still in medium level which is far from the standards stipulated by UNDP which recommends countries to have high and very high human development index. Many of studies in Kenya have focused on remittances and education expenditure or remittances and health outcomes hence giving little attention on remittances and human development. This study sought to fill the gap between foreign remittances and human development in Kenya which has not received adequate attention despite the fact that foreign remittance has been one of the leading financial foreign inflows in the country. It is with this regard where the specific objectives sought to establish the effects of foreign remittances on both health index and education index. The study adopted foreign remittance as independent variable while health and education index were treated as dependent variables. To achieve the results, the study adopted vector error correction model (VECM) which falls under ordinary least square (OLS) regression technique. The model helped in determining the long run and short run effects of foreign remittances on health index and education index respectively. The study used time series data from period 1990 to 2021 and was obtained from secondary sources. A non-experimental research design was used to determine the frequency of association between the variables. Statistical results were achieved with the aid of statistical package E-views. The study concludes that foreign remittances have negative and significant effects on both health and education index. The study recommends that relevant authorities should deep in to understand the cause of negative relationship between remittances on both health and education index.Item Effects of Infrastructure on Foreign Direct Investment in Kenya(Kenyatta University, 2015) Wekesa, Carol TeresaKenya's FDI inflows as a percentage of GDP have been increasing negligibly over the last five years, increasing from 0.4 percent in 2010 to 0.9 percent in 2013. This is despite the fact that, since the year 2000, there has been increased budgetary allocation to the infrastructure sector. Empirical evidence has shown that quality infrastructure lowers the cost of doing business and improves the investment climate, thus attracting FDI. However, Kenya still has visible signs of infrastructure in-adequacy and inefficiencies. These include congested roads, erratic power supply, long-waiting lists for installation of telephone/power lines, shortages of clean and safe drinking water, and overloaded waste disposal system and pollution. This study, therefore, sought to determine the effects of transport, energy, communication, and water and waste infrastructure development on FDI inflows in Kenya. The study used annual secondary data, spanning 1970 to 2013, sourced from Central Bank of Kenya, World Bank and UNCTAD. Multiple regression analysis was done. It was established that, improved transport infrastructure, communication infrastructure, water and waste infrastructure, exchange rate, economic growth and trade openness are important determinants of FDI inflows into Kenya. Hence, for Kenya to attract more FDI, the government should modernize ports and airstrips, tarmac more kilometres of roads, construct more kilometres of rail line, improve port infrastructure to increase container port traffic, increase broadband internet connectivity, expand technical training institutes, harness innovative ideas for increased export of ICT goods and services, construct and rehabilitate water and waste management systems. It should further strengthen the Public Private Partnerships (PPPs) framework for more private sector participation in infrastructure development; strengthen tax collection mechanisms, sealing loopholes for tax evasion, and ensure more resources are directed towards development vote as opposed to the recurrent vote. Innovative infrastructure financing models should be sought. The use of infrastructure bonds and pension funds are examples. The government should afford investors a conducive investment climate, and at the same time prioritize the implementation of national cohesion and anti-terrorism programs.Item Effects of Mobile Money Financial Technology Services on Output Growth and Productivity in Kenya(Kenyatta University, 2023-11) Wachira, Gladys Njeri; Angelica NjugunaItem Effects of mobile money financial technology services on output growth and productivity in Kenya(Kenyatta university, 2023-11) Wachira, Gladys Njeri; Angelica NjugunaThe advent of mobile money services in Kenya has revolutionized the financial sector in the country. The rate of uptake for the service- specifically M-Pesa has been nothing but phenomenal. Within 4 years of introduction, the service had reached a high proportion of 80 percent of the Kenyan households. This is in stark contrast to the 60 years it took for Kenya to have electricity- an equally important infrastructure. This service continues to grow and evolve - providing new and more services as the years go by. It has led to the financial inclusion of people who were previously unbanked or under-banked. Africa has for years been leading her counterparts in the number of active accounts and transaction value carried out using mobile money and more specifically, M-Pesa has been heralded to be a global leader in terms of mobile money financial technology services. It is, therefore, not surprising that foreign leaders have traversed for long distances to learn about this Kenyan-bred financial service. This study, therefore, takes cognizance of the massive growth of M-Pesa and its uniqueness in providing solutions for financial inclusion particularly in a developing country like Kenya. The general objective of this study was to analyze the effects of mobile money financial technology services on output growth and productivity in Kenya. The specific objectives were to investigate whether there is a structural change in the output growth and productivity in Kenya due mobile money financial technology services; to quantify the effect of mobile money financial technology services on output productivity in Kenya; and to examine the presence of a leapfrog effect of mobile money financial technology services on output productivity in Kenya. Secondary data was obtained for the years 1980 to 2020 and diagnostic tests for unit root, normality, multi-collinearity, auto-correlation and model misspecification were conducted to ensure that the results obtained were not spurious. The study used the Growth Accounting Method to determine Total Factor Productivity’s contribution to the economic growth in Kenya. A regression analysis was then performed to establish the contributions of different factor variables to the Total Factor Productivity. The findings of the study suggest that there is a structural change in output growth and productivity in Kenya as a result of the introduction of mobile money financial technologies. Mobile money financial technology services were also found to have a significant positive effect on output productivity while leapfrogging did not have a significant effect. Given mobile money’s positive effect on productivity, constraints hindering adoption and use of digital technologies such as lack of electricity access, poor network quality, affordability and lack of digital skills should be addressed for increased productivity. Additionally, a robust cyber security system that ensures client transactions and information is secure should be developed and enforced.Item Effects of non-performing loans on technical efficiency of commercial banks in Kenya(Kenyatta university, 2022-05) Abuga, Frankline Kianyaga; Susan M. OkeriABSTRACT With the formation of very large banks and increased interbank connectivity, the 1992 financial sector reforms resulted in a shift in market power. They also improved the banking sector's resilience and sustainability. The reforms aimed at doing away with regulatory and structured issues hindering efficiency of the sector. However, the increasing trend of Non-performing loans since 2008 as well as the commercial banks’ decline in profitability since 2014, has been a cause of alarm and distress to customers and stakeholders. Although there exists an authority to monitor the operation of banks still their operations are sub-optimal. To improve operations of banks and create assurance to customers and stakeholders this study investigated the role of non-performing loans on technical efficiency of commercial banks in Kenya. The research was motivated by the enormous evidence that the Kenyan financial system is dominated by the banking sphere but little is known about efficiency statistics and determinants of efficiency scores. The study used Data Envelopment Analysis to measure efficiency scores in Kenya's 26 commercial banks; 9 in tier 1, 7 in tier 2, and 10 in tier 3, that existed over the study period (2014-2019); inputs as well as outputs variables were selected depending on the intermediation roles performed by banks. The variables were split into inputs and outputs. The income (a linear combination of non-interest income and interest income) was treated as output. The inputs were non-interest expenditure, equity capital and interest expenditure. The results revealed that there was inefficiency across all the banking categories. Tier one banks operated at 97.5 percent efficiency scores, tier 2 at 78.4 percent and tier 3 at 68.8 percent level. Tobit regression was utilized to examine the impacts of Non-performing loans on the technical efficiency of commercial banks in Kenya. The study regressed Non-performing loans, total loan to total assets ratio, total assets, equity to total assets ratio, and non-interest expenses to total assets ratio on technical efficiency level obtained in the first part. The findings indicated that Non-performing loans have -0.00000000262 effect on technical efficiency of the commercial banks, however the effect is not significant. This study concluded that if the commercial banks need to keep improving their efficiency indices, they need to minimize their non-performing loans by implementing the following recommendations; investing heavily on loan recovery a customer credit score monitoring, relying on private credit collection agencies, that look to solve disputes and seek to refer accounts to the credit reference bureau. This will avoid pilling of non-performing loans on the financial statement of commercial banks and other long term legal process such as court cases.Item Effects of Non-Performing Loans on Technical Efficiency of Commercial Banks in Kenya(Kenyatta University, 2022) Abuga, Frankline Kianyaga; Susan M. OkeriWith the formation of very large banks and increased interbank connectivity, the 1992 financial sector reforms resulted in a shift in market power. They also improved the banking sector's resilience and sustainability. The reforms aimed at doing away with regulatory and structured issues hindering efficiency of the sector. However, the increasing trend of Non-performing loans since 2008 as well as the commercial banks’ decline in profitability since 2014, has been a cause of alarm and distress to customers and stakeholders. Although there exists an authority to monitor the operation of banks still their operations are sub-optimal. To improve operations of banks and create assurance to customers and stakeholders this study investigated the role of non-performing loans on technical efficiency of commercial banks in Kenya. The research was motivated by the enormous evidence that the Kenyan financial system is dominated by the banking sphere but little is known about efficiency statistics and determinants of efficiency scores. The study used Data Envelopment Analysis to measure efficiency scores in Kenya's 26 commercial banks; 9 in tier 1, 7 in tier 2, and 10 in tier 3, that existed over the study period (2014-2019); inputs as well as outputs variables were selected depending on the intermediation roles performed by banks. The variables were split into inputs and outputs. The income (a linear combination of non-interest income and interest income) was treated as output. The inputs were non-interest expenditure, equity capital and interest expenditure. The results revealed that there was inefficiency across all the banking categories. Tier one banks operated at 79.5 percent efficiency scores, tier 2 at 78.4 percent and tier 3 at 68.8 percent level. Tobit regression was utilized to examine the impacts of Non-performing loans on the technical efficiency of commercial banks in Kenya. The study regressed Non-performing loans, total loan to total assets ratio, total assets, equity to total assets ratio, and non-interest expenses to total assets ratio on technical efficiency level obtained in the first part. The findings indicated that Non-performing loans have -0.00000000262 effect on technical efficiency of the commercial banks, however the effect is not significant. This study concluded that if the commercial banks need to keep improving their efficiency indices, they need to minimize their non-performing loans by implementing the following recommendations; investing heavily on loan recovery a customer credit score monitoring, relying on private credit collection agencies, that look to solve disputes and seek to refer accounts to the credit reference bureau. This will avoid pilling of non-performing loans on the financial statement of commercial banks and other long term legal process such as court cases.
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