Browsing by Author "Kyomuhendo, Ruth"

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    The Macroeconomic Determinants of Agricultural Productivity in Uganda (1981 – 2023).
    (Makerere University Business School, 2025-11-14) Kyomuhendo, Ruth
    The study examines the macroeconomic determinants of agricultural productivity in Uganda (1981 – 2023). The first objective investigates the effect of inflation on agricultural productivity in Uganda. The second objective investigates the influence of government expenditure on agricultural productivity in Uganda. The third objective examines the effect of interest rates on agricultural productivity in Uganda. The fourth objective investigates the effect of the exchange rate on agricultural productivity in Uganda. Using the Autoregressive Distributed Lag (ARDL) (2,0,1,2,0) model, the research analyses both long-run equilibrium relationships and short-run dynamics. The long-run results indicate that government expenditure has a strong positive effect on agricultural productivity, while high interest rates significantly reduce output. Inflation and exchange rates, however, show no statistically significant long-term impact. In the short run, government expenditure remains positively influential, and inflation exhibits a temporary positive effect, likely due to initial price incentives. Interest rates, though insignificant in the short run (P = 0.215), exert a negative long-term effect, suggesting that credit constraints accumulate over time. Exchange rate fluctuations have no significant impact in either period. Based on these findings, the study recommends a multi-pronged policy approach to enhance Uganda’s agricultural productivity. First, the government should increase and strategically allocate agricultural expenditure, targeting rural infrastructure, extension services, and post-harvest loss reduction while ensuring transparency and efficiency in spending. Second, financial sector reforms are needed to lower interest rates for farmers through credit facility expansions, risk-sharing mechanisms, and alternative collateral systems. Third, inflation stabilization measures, including prudent monetary policy and domestic input production, should be prioritized to protect farmers' purchasing power. Lastly, exchange rate risk mitigation strategies, such as hedging mechanisms and export diversification, should be implemented to safeguard agricultural incomes. These policy interventions, coupled with institutional coordination and stakeholder engagement, can unlock Uganda’s agricultural potential, improve food security, and drive sustainable economic growth.