Department of Applied Economics

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Credit terms, Credit Accessibility and Sustainability of SMES in Uganda: Acase study of SMES in Nakawa division Kampala.
(Makerere University Business School, 2018-08-07) Muhire, Francis
The study was carried out with the purpose of establishing the relationship between Credit terms, Credit accessibility and Sustainability of Small and Medium Enterprises in Uganda. The study was guided by the following objectives to examine; the relationship between credit terms and sustainability of SMEs, the relationship between credit accessibility and sustainability of SMEs, and the combined effect of credit terms and credit accessibility on the sustainability of SMEs in Nakawa Division. The study was based on a cross sectional research design and quantitative research approach out of 743 registered SMEs in Nakawa Division and, a sample of 248 SMEs was drawn. Primary data was collected using questionnaires. Data from the field was compiled, sorted, edited for analysis using SPSS. The results indicated a significant positive relationships between credit terms and sustainability, credit accessibility and sustainability and, a combination of credit terms and credit accessibility and sustainability of SMEs within Nakawa Division. Based on the findings, the study recommended that financial Institutions need to relax credit terms which will increase credit accessibility that also automatically lead to sustainability, SMEs should ensure mechanisms that can boost their credit accessibility and the government should put in place policies that ensures easy access to credit by SMEs and should further increase funding and come up with more entrepreneurship oriented programs such as capital ventures which well maximized guarantee sustainability of SMEs.
International Oil Prices, Lending Interest Rate and Unemployment in Uganda.
(Makerere University Business School, 2021-03-04) Kisaalita, Thomas
This study analyses and investigates the impact of international oil prices and the lending interest rate on unemployment in Uganda. The study employs a bounds test cointegration technique based on autoregressive distributive lag to model unemployment against international oil prices, lending interest rates, real effective exchange rate and gross domestic product. Using annual data for the period 1987-2018, econometric results show that the first lagged difference of lending interest rate, the real effective exchange rate and GDP are the most important determinants of unemployment in the short run, while GDP is the most important determinant of unemployment in the long run. Results show that, in order to reduce unemployment in Uganda, there is need to pay attention to the lending interest rate, the real effective exchange rate and as well accelerate GDP growth especially in the short run. Unlike previous studies that have looked at unemployment, this study includes international oil prices in examining the unemployment problem in Uganda.
Determinants Of foreign Direct Investment Inflows in Uganda
(Makerere University Business School, 2021-12-20) Sempambo, Eric
In the progression towards economic growth, countries consider investment as a critical feature in raising productivity levels by boosting technological progress and reducing the unemployment rate. In recent years, the Government of Uganda has enacted policies to entice Foreign Direct Investment (FDI) in the view of creating more jobs and bolstering the economy. However, the performance of FDI has registered mixed understanding of trends with oscillations rather than a clear growth trajectory. One would then wonder, what could be the determinants of FDI inflows in Uganda. A longitudinal research design comprised of a 29-year time series was used with inflation rate, interest rate, Balance of Payment, GDP percapita and exports serving as the determinates of FDI inflows in Uganda. Several diagnostics tests were conducted. Johansen test for cointegration which revealed that the long run relationship exists amongst the variables. Pearson Correlation technique was used to establish the level of relationship between the macro economic factors and FDI inflows. Vector Error Correction Model was constructed to determine the contribution of these variables to FDI inflows. Results from the study revealed that Inflation, exports, interest rate and GDP percapita determine the FDI inflows in Uganda. Foreign investment is driven by the size of GDP percapita of Uganda, implying that investors target more domestic market. An average of 6% inflation rate is desired by foreign investors in Uganda. And, a high interest rate of Uganda attracts more FDI inflows meaning that investors require a safe and stable business environment. It was also found that balance of payment is statistically insignificantly related to FDI. This means that the relationship could actually be by chance. Government is therefore urged to; i. Devise mechanisms and policies that target improving percapita income of the population. This will increase the market size hence more FDI inflows. ii. Monetary policy should target maintain inflation rate at 6.4%. This is highly required to support foreign investments. iii. Target import substitution and provision of incentives for investors that target export market to attract more export oriented FDI into the economy
Audit quality, team competence and financial performance of commercial banks in Kampala central division
(Makerere University Business School, 2022-01-10) Akangwagye, Johnson
The study sought to establish the relationship between audit quality and financial performance of commercial Banks in Kampala Central Division. The study adopted across sectional and correlation quantitative design using 24 commercial Banks in Kampala central 24 commercial banks in Kampala central division that were drawn from a population of 26commercial banks. The sample size was determined using Krejcie and Morgan Tables (1970). The data were tested for reliability and validity, analyzed using SPSS version 21 and results presented based on the study objectives. The correlation coefficient analysis revealed positive and significant relationships between audit quality, team competence and financial performance of commercial Banks which implies that when one variable is improved it leads to improvement of the other. Furthermore, the hierarchical regression analysis indicates that audit quality combined with team competence have a greater predictive potential on the financial performance (Adj R2 of 0.324). However, it was further revealed that audit quality has a more direct effect on the financial performance based on the individual contribution (R Square Change 0.202). Therefore, it’s worth recommending that The management of the commercial banks should ensure that they hire quality audit firms and ensure that employees who work in the internal audits are well qualified and they should do this by tracking their history and also how big they are in dealing with different bigger audits. This will enable the commercial banks to get independent and quality reports about their performance and this will help them to continue correcting their mistakes and improve performance. It should ensure that the employees have the right attitude towards work, this can be done by ensuring that the environment is conducive for business continuity and it enables workers to be promoted.
Social Network, Neighbourhood Effect, Financial Inclusion and Adoption of Solar Photovoltaic in Households of Uganda.
(Makerere University Business School, 2022-03-25) Tamukedde, Juma
The purpose of this study was to establish factors influencing adoption of solar photovoltaic (PV) in households. The study was guided by three specific objectives (i) to determine the effect of financial inclusion on adoption of solar PV. (ii) to determine the effect of neighbourhood influence on adoption of solar photovoltaic and (iii) to determine the effect of social network tie on adoption of solar photovoltaic. The study used the 2019-2020 Uganda National Household Survey (UNHS 2019/2020) data collected by Uganda Bureau of Statistics (UBOS) with a sample of 13,732 randomly selected households. Quantitative research approaches were employed and the logit regression model was used for to estimate the marginal effects of financial inclusion, neighbourhood effect and social network tie on adoption of solar photovoltaic. Findings reveal that, financial inclusion has positive (0.036) and statistically significant (p < 0.01) effect on adoption of solar PV. Meaning that, the probability of a household adopting solar and is financially included significantly increases by approximately 4% compared to those who are financially excluded. Neighbourhood effect has positive (0.709) and statistically significant (p < 0.01) influence on adoption of solar PV. Meaning that, the probability of a household adopting solar as a result of neighbourhood effect increases significantly by approximately 71% compared to those in areas with less concentration of solar PV in the neighbourhood. Social network tie has positive (0.061) and statistically significant (p < 0.01). Meaning that, households with members belonging to a social network significantly increases the probability of adopting solar PV by approximately 6% and statistically significant (p < 0.01). the findings suggest that, financial inclusion, Neighbourhood effect and social network, jointly predict about 31% of solar PV adoptions in households. Furthermore, results show that, sex of the household head, household income, size, roof type and residence have a significant positive effect on adoption of solar PV. The study recommends that; policies to promote adoption of solar PV in households should prioritize financial inclusion. This will enhance financial capability of income constrained households to afford solar PV. Both government and solar companies should leverage on existing social networks to promote solar PV adoption. Similarly, existing adopters in the neighbourhood can used to increase visibility of solar PV systems thereby arousing the interest of potential adopters. Existing interventions should continue to target rural households since solar PV adoption is more of a rural phenomenon. Future studies should consider qualitative research approaches to provide deeper insights into determinants of solar PV adoption
Electricity Consumption and Economic Growth in Uganda
(Makerere University Business School, 2022-03-28) Kedi ,Sharon
This study examined the relationship between electricity consumption and economic growth in Uganda during the period 1987 to 2018. The objectives of this study included; 1) to investigate the causal relationship between electricity consumption and Uganda’s economic growth and 2) to investigate the determinants of Uganda’s economic growth. To achieve these objectives, the study adopted the Johansen cointegration in analyzing the level of relationship. In addition, the study used the Granger Causality testing to determine the direction of causation, in granger sense, between the study variables. Results indicated that there is a valid long-run relationship between electricity consumption and economic growth. However, the Granger causality tests indicated absence of relationship between electricity consumption and economic growth in the short run. Overall, the study found that electricity consumption will spur economic growth in Uganda in the long run. The Government of Uganda should therefore fast-track and consolidate interventions in electricity access and affordability with the view of sustaining the long-run electricity demand and consumption to ensure promotion of economic growth in the country.
Drivers of Aggregate Electricity Consumption in Uganda
(Makerere University Business School, 2022-08-26) Mukundane, Proscovia
The study examined the drivers of aggregate electricity consumption in Uganda particularly foreign direct investment, real domestic product, population growth rate and price of electricity. The objective was to examine their effect on aggregate electricity consumption and determine which of the drivers of FDI, Population growth rate, GDP, and electricity tariffs/ prices influences aggregate electricity consumption more. The study employed the Autoregressive distributed lag (ARDL) model with structural break in time series data using the Gregory Hansen cointegration test, data used run from the first quarter of 2008 to the fourth quarter of 2019.Findings indicated that there was a structural break in 2016:Q3, further findings reveal that Foreign Direct Investment and Population growth rate have a negative effect on aggregate electricity consumption in Uganda in the long run whereas Gross domestic product and Price of electricity have a positive effect on aggregate electricity consumption in the long run. Findings also reveal real Gross domestic product as the most influential driver of aggregate electricity consumption in Uganda and price of electricity as the least influential driver of aggregate electricity consumption. The study results will guide policy makers and researchers to draw their attention to Gross domestic product, develop or suggest policies aimed at increasing productivity and people’s standards of living as a way of increasing aggregate electricity consumption. The study results will also prompt policy makers and researchers to dig deeper into understanding the drivers of aggregate electricity consumption in Uganda.
Determinants Of foreign Direct Investment Inflows in Uganda.
(Makerere University Business School, 2022-12-20) Sempambo, Eric
In the progression towards economic growth, countries consider investment as a critical feature in raising productivity levels by boosting technological progress and reducing the unemployment rate. In recent years, the Government of Uganda has enacted policies to entice Foreign Direct Investment (FDI) in the view of creating more jobs and bolstering the economy. However, the performance of FDI has registered mixed understanding of trends with oscillations rather than a clear growth trajectory. One would then wonder, what could be the determinants of FDI inflows in Uganda. A longitudinal research design comprised of a 29-year time series was used with inflation rate, interest rate, Balance of Payment, GDP percapita and exports serving as the determinates of FDI inflows in Uganda. Several diagnostics tests were conducted. Johansen test for cointegration which revealed that the long run relationship exists amongst the variables. Pearson Correlation technique was used to establish the level of relationship between the macro-economic factors and FDI inflows. Vector Error Correction Model was constructed to determine the contribution of these variables to FDI inflows. Results from the study revealed that Inflation, exports, interest rate and GDP percapita determine the FDI inflows in Uganda. Foreign investment is driven by the size of GDP percapita of Uganda, implying that investors target more domestic market. An average of 6% inflation rate is desired by foreign investors in Uganda. And, a high interest rate of Uganda attracts more FDI inflows meaning that investors require a safe and stable business environment. It was also found that balance of payment is statistically insignificantly related to FDI. This means that the relationship could actually be by chance. Government is therefore urged to; i. ii. iii. Devise mechanisms and policies that target improving percapita income of the population. This will increase the market size hence more FDI inflows. Monetary policy should target maintain inflation rate at 6.4%. This is highly required to support foreign investments. Target import substitution and provision of incentives for investors that target export market to attract more export oriented FDI into the economy.
Determinants of Manufacturing Sector Growth in the East African Community.
(2023) Wako, Ibrahim Kisu
This study examines the factors influencing manufacturing sector growth in East African Community (EAC) member states from 2001 to 2021, focusing on inflation, Foreign Direct Investment (FDI), lending rates, and Domestic Credit. Panel data was utilised and the Feasible Generalized Least Squares (FGLS) estimator was applied to address heteroskedasticity and autocorrelation. Results indicate that inflation and lending rates significantly impact manufacturing sector growth, while Domestic Credit and FDI do not show significant effects. The study highlights the importance of maintaining macroeconomic stability through effective inflation control measures and sound monetary policies to facilitate manufacturing sector growth. The report also stresses the necessity of steady and affordable loan rates for manufacturers, which can be attained through focused interventions and rewards for financial institutions. Attracting FDI to the manufacturing sector remains crucial, and governments should actively pursue such opportunities. Continued research is recommended to deepen our understanding of the complexities surrounding manufacturing sector growth. These actions collectively aim to bolster industrialization and economic growth in EAC member states, ultimately promoting prosperity throughout the region.
The Effect of Government Expenditure, World Food Prices and World Fuel Prices on Inflation Rate in Uganda.
(2023) Kafuko, Cynthia Grace
This study investigates the effect of government expenditure, world food price and world fuel price on inflation rate and their causal direction. Employing the Vector Error Correction Model (VECM) and the two-step granger causality test, the study establishes that government expenditure has a positive and significant effect on the rate of inflation in the long run. World fuel prices is established to have a positive and significant effect on inflation rate both in the short run and in the long run. The study further establishes a positive effect of world food price on inflation rate but it is only significant in the short run. Further, a bi-directional granger causality relationship is established to exist between the rate of inflation and each of the independent variables. The study recommended that government should closely monitor the dynamics in world food and energy prices in order to curtail their secondary effects on domestic prices. Massive investment in agricultural sector, especially in rural areas to increase food production and reduce importation of food. It further recommends for government investments in renewable energy that’s more affordable and sustainable.
The Determinants of Export Growth in Uganda.
(2023) Vundru, Wilbert Drazi
Empirical research suggests that export growth contributes to economic growth. As such, the study set out to investigate the determinants of export growth in Uganda within the framework of an augmented gravity model of trade using panel data covering 17 years from 2005 – 2021 for Uganda and 21 of her top trading partners. The Poisson Pseudo Maximum Likelihood regression (PPML) was used to reveal the effect that variables such as exchange rate volatility, foreign direct investment, infrastructure quality, institutional quality and EAC membership have on Uganda’s export growth. The findings suggest that exports grow significantly with the expansion of infrastructure quality, institutional quality of Uganda and foreign direct investment. The effect of exchange rate volatility was determined to be insignificant with respect to Uganda’s export growth. Surprisingly, membership in the East African Community was found to have a negative effect on export growth in Uganda. Distance between Uganda and her trading partners was also found to have a significant negative effect. This study recommends that to improve Uganda’s export growth rate, government should boost inbound FDI because it could act a conduit for technological transfer which could directly impact on the volume and value of Uganda’s exports through value addition. Government of Uganda should invest more in infrastructure like rail lines since it would help boost the level of exports. The significance of the East African Community membership should be reviewed by policy makers to make sure that non-tariff barriers to trade are removed to allow for exports in Uganda and the region to grow.
Agribusiness, Export Performance, and Youth Unemployment in Uganda
(Makerere University Business School, 2023) Mufuumula, Jude
This study investigated the effect of Agribusiness (AGRIB) and export performance on Youth unemployment in Uganda. The specific objectives of the study included establishing the effects of agribusiness, export performance on youth unemployment. Employing the Vector Error Correction Model (VECM), the study used time series data that spanned a period of 31 years ranging from 1991 to 2021. The results of the study showed that, in the short run, both agribusiness and export performance had a negative effect on youth unemployment. However,these coefficients were found not to be significant in the short run thus not affecting youth unemployment. In the long run, agribusiness and export performance have negative and significant effect on youth unemployment. The granger casualty test indicated a uni-directional causation running from export performance to youth unemployment. It however indicated no directional causation between agribusiness and youth unemployment at 5% level of significance in Ugandan. The study recommends that the Government needs to boost inflow of modern efficient agricultural technology to quicken and expand agro-output. It also recommends for government-private partnership in training and equipping the youth with entrepreneur skills that are required to fully explore the potentially available opportunities in agribusiness and export sector. Trade barriers should be done away with and new and sustainable trade relations should be sought with other countries.
The Effect of Central Bank Rate on Uganda's Commercial Banks Lending Rates.
(2023) Kibuuka, Francis Louis
This study investigated the effect of Central Bank Rate (CBR) on Commercial bank’s lending rates in Uganda. The study thus had a major objective of examining the effect of the central bank rate, on the commercial banks’ lending rates, as a monetary policy stance in Uganda. The specific objectives of the study included establishing the short run and long run effects of central bank rate, Inflation and Exchange rate on commercial banks’ lending rate. Employing the Vector Error Correction Model (VECM), the study used time series data that spanned a period of 127 months ranging from January 2012 to July 2022. The results of the study showed that, in the short run, commercial banks’ lending rate is affected by central bank rate and exchange rate, with all having positive effects. Inflation was found not be significant in the short run thus not affecting the lending rate. In the long run however, only CBR and Inflation had a positive effect on commercial banks’ lending rate while Exchange rate was observed to be insignificant and thus having no effect on the lending rate in the long run. The study recommends that the central bank should deliberately and effectively set the CBR that will influence moderate and affordable commercial banks’ lending rates in order to boost credit accessibility.
The Effect of the China Belt Road Initiative (BRI) Strategy on Uganda's Economic Growth.
(2023) Natukunda, Winnie
This study investigated the effect of China Belt Road Initiative (BRI) strategy on Uganda’s Economic Growth. The study used Descriptive, inferential statistics, correlation and regression analysis to investigate the effect of BRI strategy on economic growth in Uganda. The results of the study indicate that there is a positive and significant effect of China Belt Initiative on Uganda’s economic growth through household and firm productivity channels and through creation of employment opportunities. The policy implication for this study includes the following: Strengthening of active engagement with civil society and community organizations as mainstreamed stakeholders in project development, implementation and impact assessment. More ‘people-to-people’ trans-border relationships and strategic relationships be promoted through furthering policy-oriented research on BRI implementation, effectiveness and impact. Emphasize involvement of local enterprises in BRI projects as well as committing to environment and social governance safeguards in order to prevent and mitigate undue arm to people and their environment in the development process.
Remittences, Education, Ethnicity and Adoption of Biogas Technology among House Holds in Uganda.
(2023) Kiiza, Nelson
The purpose of this study was to establish factors influencing biogas adoption among households in Uganda. Four specific objectives guided this study: (i) examine the relationship between financial remittances and adoption of biogas energy technology; (ii) examine the relationship between education attainment and adoption of biogas energy technology; (iii) examine the relationship between ethnicity and adoption of biogas energy technology; and (iv) examine the moderating effect of education attainment on ethnicity and adoption of biogas energy technology. To address the specific objectives, the study used the 2019–2020 Uganda National Household Survey (UNHS 2019–2020) data collected by the Uganda Bureau of Statistics (UBOS), covering a total sample of 13,732 randomly selected households. Quantitative research approaches were employed, and a binary probit regression model was used to estimate the marginal effects of financial remittances, education attainment, and ethnicity on biogas adoption among households. The study found that financial remittance has a positive (0.050) and significant (p < 0.01) association with biogas adoption. Meaning that remittance inflow increases the likelihood of a household adopting biogas technology by approximately 5%. Education attainment of household heads is positive (0.050) and significantly (p < 0.01) correlated with biogas adoption. This means that an increase in education attainment in terms of years of schooling increases the likelihood of a household installing biogas technology by 5%. Ethnicity is positive (0.020) and significantly (p < 0.01) associated with biogas adoption. Implying that ethnic diversity is associated with a 2% increase in the probability of a household adopting biogas technology. The interaction effect of ethnicity and education is positive (0.044) and significant (p < 0.01) on biogas adoption. Implying that marginal change in ethnic diversity increases the likelihood of a household using biogas by 4.4% if the household head has attained formal education. Overall, the findings suggest that financial remittance, education, and ethnicity combined have the capacity to explain about 20.9% of biogas adoptions in households. Furthermore, results show that household size, rural residence, regional location of the household, housing condition, and access to grid electricity have a significant positive effect on biogas adoption. The study recommends that there is a need to fast-track policies and initiatives that encourage remittance inflows, as this enhances household income and the ability to invest in biogas systems. In addition, biogas practitioners should invest in educational and awareness programs, particularly regarding the benefits that the technology can provide, as this will accelerate the uptake of the technology.
Determinants of Electricity Supply in Uganda
(Makerere University Business School, 2023) Nandase, Nubuat
The study examined the determinants of electricity supply in Uganda particularly, Technology, cost of production, price of electricity and rainfall. The objective was to examine their effect on electricity supply. The study employed the Autoregressive distributed lag (ARDL) model with structural break in time series data using the Gregory Hansen cointegration test. Data used was from the first quarter of 2009 to the fourth quarter of 2019. Findings indicated that there was a structural break in 2016:Q1.Further, findings reveal that Technology, cost of production, price of electricity and rainfall have a positive effect on electricity supply in Uganda both in the long run and short run. The study results will guide policy makers such as the government in designing policies on electricity supply. Also, the study findings will be used by scholars and academicians as a source of reference for further research on electricity supply in Uganda as no scholar has studied these factors in a similarin Uganda . Similarly findings from this study will help stakeholders to appreciate the effect of price of electricity, cost of production, technology and rainfall on ensuring sustainability of electricity supply in Uganda.
External Debt and Poverty Level in Uganda.
(2023) Nalunkuma, Shamirah
This study investigated the effect of External Debt (EXD) on Poverty level in Uganda. The specific objectives of the study included establishing the short run and long run effects of external debt, debt servicing and income percapita on poverty level. Employing the Vector Error Correction Model (VECM), the study used time series data that spanned a period of 28 years ranging from 1992 to 2019. The results of the study showed that, in the short run, external debt, percapita income and debt servicing do not influence the poverty level. In the long run, external debt and debt servicing were found to increase poverty level while percapita income had was found to reduce poverty level and statistically significant. The granger casualty test indicated a uni-directional causation running from poverty level to external debt in Ugandan. The study recommends that the Government needs to mobilize its domestic savings that are more reliable and less risky, and it should pursue vigorously policy initiatives that will alleviate poverty.
An Evaluation of the Internal Control Environment at Stabex Fuel Stations in Central Uganda.
(2023) Kiyegga, Stephen
The study sought to examine the internal control environment at Stabex fuel stations in central Uganda and addressed the challenges of the internal control environment of the fuel stations. The objectives that guided the study included; to assess the existing internal control environment at Stabex fuel stations; to examine the deficiencies in the internal control environment at Stabex fuel stations; and to identify solutions for the deficiencies in the internal control environment at Stabex fuel stations. A cross sectional design was adopted for the study and from a population of 172 respondents, a sample size of 141 was selected using purposive sampling and simple random sampling. A self-administered questionnaire was used to collect data from the respondents and the data was analyzed using the Statistical Package for Social Sciences (SPSS V22). The findings showed that the level of the internal control environment at the stations in regard to internal control environment, financial control environment, information and communication systems, monitoring and audit functions, health, environment and safety, and inventory management was moderate. This requires Stabex to find ways of improving the internal control environment at the stations. This is validation that there existed some level of internal control environment management at the stations. This is because internal control environment management provides an arena where the stakeholders of Stabex can help the stations become effective. The findings revealed that the challenges in managing the internal control environment were inadequate internal control procedures and measures, unethical behaviour of staff, poor employee compensation/remuneration, inadequate fraud control and prevention, and unnoticed misconduct among others. The management of Stabex should therefore identify the causes of these challenges and devise ways of addressing them as this would greatly impact on the effectiveness and efficiency of the internal control environment at the stations in the long run. The study therefore recommends that the management of Stabex should draw adequate attention to ensure the effective and efficient operations of cash controls, inventory management, compliance with regulations, internal auditing, access controls, employee training, surveillance and monitoring, reporting and communication channels, fraud prevention measures, risk management, adherence to standard operating procedures, supervision and oversight, and continuous improvement.
Economic Growth, Urbanization, Electricity Prices and Electricity Consumption in Uganda.
(2023) Mwesigwa, Noa
The Study examines the long-run relationship between economic growth, urbanization and electricity consumption in Uganda while controlling for electricity tariffs. The Study used quarterly time series data from the Electricity Regulatory Authority of Uganda and the World Bank. The Study tests for the unit root and cointegration using Augmented Dickey-Fuller and Johansen cointegration respectively. The existence of a long-run relationship allowed the Study to examine the existence of the series under investigation using vector error correction causality/block exogeneity Wald tests. The Study results show population, urbanization and economic growth have a positive and significant long-run effect on electricity consumption while electricity tariff has a negative and significant effect on electricity consumption. The Study, therefore, recommends that the government through Electricity Regulatory Authority should strive to make electricity affordable by lowing tariffs and allowing the provision for load shifting at peak to off-peak hours by domestic consumers, manufacturers and local small businesses. The Study further recommends that government should boost the purchasing power for both rural and urban people through creating self-help projects and cheap financial credits for capital development.
Determinants of Electricity Power Losses in Uganda.
(2023) Tuhamire, Robert
This study investigates the determinants of electricity power losses in Uganda. Employing the Auto Regressive Distributed Lag (ARDL) approach, the study regressed Non-technical electricity power losses against domestic tariffs, income (measured as GDP per capita) and population growth over a 30-year period using annual data. The study established that in the short run, domestic tariff and income have a negative and significant effect on power losses with the reducing-effect of income spreading across a four-year period. Population growth on the other hand has a positive and significant short run effect on electricity power loss. In the long run, domestic tariff and population growth have positive and significant effects on power losses while the effect of income is not significant. The study therefore recommended that policy makers should strive to raise people’s income because high incomes have an immediate reducing effect on power losses. There should also be direct efforts to regulate and stabilize electricity tariffs and an installation of a clear policy on population growth in Uganda in order to sustain electricity supply in the long run.

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