Economics

Effect of cash transfers on achievement of selected sustainable development goals among female-headed households in Siaya county, Kenya

2024-01-01T00:00:00Z

Effect of cash transfers on achievement of selected sustainable development goals among female-headed households in Siaya county, Kenya ANYANGO, Simona Omondi Poverty, hunger and lack of access to clean water and sanitation is high among developing economies derailing achievement of Sustainable Development Goals. Cash transfers provide social protection to the vulnerable. Kenya’s Inua Jamii programme issues CTs to Orphans and Vulnerable children, Persons living with Severe Disability and Old Persons. The main objective of this study was to establish the effect of cash transfers on achievement of selected SDGs among female-headed households in Siaya County. The three specific objectives were to determine the effect of cash transfers on poverty reduction, hunger reduction and increasing access to clean water and sanitation among female-headed households in Siaya County. Numerous literature on cash transfers and SDGs among female-headed households point towards a significant effect of CTs on reducing poverty, reducing hunger and improving access to clean water and sanitation. The study was founded on the Household Welfare Theory which suggests income and consumption as the best measurements of household welfare. The target population was 109,680 female-headed households in Siaya County and sample size of 399 FHHs using the Yamane formula. A correlational design was adopted to study the relationship between cash transfers and SDGs. Data was collected using a structured interview schedule. Reliability and validity of data instruments was tested during the pilot study and results found to be consistent with final study. A binary logit regression analysis of data collected revealed that increasing cash transfer by 1% had a significant negative effect on poverty rate by 1.58%. The coefficient of income was (-0.686) with p value of (0.01). Consumption had no significant effect on poverty reduction. The second objective analysed cash transfer to have a coefficient (-1.212) and p value (0.004). Increasing cash transfer among by 1% significantly reduces probability of a FHH experiencing hunger by 1.2%. More frequency of meals and balanced diet in the household reduces hunger level. On the third objective, the positive coefficients of cash transfers (1.196), source of water and proper sanitation (2.703) prove that the increasing cash transfers by 1% increased access to clean water and sanitation by 1.196% and 2.703% respectively. Conclusion was drawn that cash transfers had a significant effect on overall achievement of SDGs and further study can be done on nutritional outcomes. The study recommended more targeted approach in inclusion of female-headed households with special consideration to household size. Other interventions can also be used to have far reaching effects of cash transfers on reducing hunger and access to water and sanitation health. Master's Thesis

Effect of public education expenditure and per capita income on gender parity in Kenya

2024-01-01T00:00:00Z

Effect of public education expenditure and per capita income on gender parity in Kenya KAVOKI, Jackline Education is widely recognized as a crucial catalyst for economic development due to its capacity to cultivate human capital, a fundamental factor in fostering economic progress. To effectively attain the sustainable development goals (SDGs), it is imperative for the Kenyan government to prioritize the provision of inclusive and equitable quality education, as well as the facilitation of enhanced learning outcomes for all individuals. The achievement of gender parity, as assessed by the Gender Parity Index (GPI) of 1, is crucial for the realization of gender equality in the field of education. This objective aligns with Goal 5 of the Education for All (EFA) initiative, which aims to eliminate gender gaps in in enrolment at the primary and secondary levels education. The majority of research conducted on the impact of public education spending and per capita income on educational outcomes has been focused on metrics such as primary school enrollment, secondary school enrollment, adult literacy rates, and secondary school transition rates. Gender parity, however, has not been extensively utilized as a measure for assessing educational outcomes in these studies. The studies also employed the measure of overall education expenditure, rather than examining expenditure at different levels of schooling. The primary objective of this study was to investigate the impact of public education expenditure and per capita income on gender parity in Kenya. Specifically, the study aimed to assess the influence of expenditure on secondary education on gender parity, analyze the effect of expenditure on primary education on gender parity, and examine the effect of per capita income on gender parity in Kenya. This analysis was based on the human capital theory and the public spending theory proposed by Musgrave and Rostow. The research employed a correlational research approach, utilizing annual time series data spanning a period of 50 years from 1972 to 2021. The data was gathered from the world development indicators. The research utilized the Johansen Co-integration test to ascertain the existence of a long-term relationship among the variables. Additionally, the Vector Error Correction Mechanism was employed to integrate both long-term and short-term dynamics. Lastly, Granger causality analysis was conducted to determine the direction of causality. The study revealed unidirectional causality from expenditure on secondary education, expenditure on primary education, per capita income to gender parity in Kenya. The normalized co-integrating coefficients of 8.94, 2.29 and 0.0075 along with t-statistic values of 6.4317, 9.9565 and 2.8846 that surpassed the threshold of 2 implied that a one percent increase in expenditure on secondary education, expenditure on primary education and per capita income increased gender parity by 8.94%, 2.29% and 0.0075% respectively in the long run. Gender parity is significantly error correcting at 10.61% annually. The study concluded that in the long run, expenditure on primary education, expenditure on secondary education and per capita income promotes gender parity in Kenya. In view of this, the study is significant to literature by proving the human capital theory and the Musgrave’s and Rostow’s public expenditure theories by underscoring the importance of public investment in education and per capita income as key factors influencing the degree of investment in human capital. The study recommends increased financial allocation to the primary and secondary level of education with utmost efficiency and establishment of a robust data collection and monitoring system for efficient monitoring and tracing of the enrolment rates and to facilitate evidence based decision making which in the long run will help the country achieve the targeted gender parity index of 1. Master's Thesis

Determinants of real effective exchange rate fluctuations in Kenya

2023-01-01T00:00:00Z

Determinants of real effective exchange rate fluctuations in Kenya GEOFFREY, Ligare Abung’ana Economic growth in any country is important as it has a significant role in the standards of living of the people. Exchange rates play an important role in economic growth especially through foreign trade. Exchange rates in Kenya have been experiencing fluctuations since the transition of the fixed exchange rate regime of the 1960s to the crawling peg of the 1970s to 1980s and lately the floating exchange rate of the 1990s to date leading to the country losing its nominal anchor on the global market and thus its exports became less competitive. The exchange rate has oscillated between Kshs. 7.142 in 1960s to Kshs. 102.35 per unit US dollar in 2015. The magnitude of exchange rate fluctuations in most developing economies has attracted the interest of many scholars including economists and policy makers. These scholars have however differed on the determinants of real effective exchange rate. The purpose of this study therefore was to examine the determinants of real effective exchange rate fluctuations in Kenya. The specific objectives for the study were; to examine the relationship between money supply and real effective exchange rate fluctuations in Kenya, to evaluate the relationship between external debt on real effective exchange rate fluctuations in Kenya, to determine the relationship between trade balance and real effective exchange rate fluctuations in Kenya and to examine the relationship between inflation real effective exchange rate fluctuations in Kenya. The study was anchored on the balance of payments theory of exchange rate determination; which focuses on the balance of payments in the sense of demand and supply of foreign exchange in the market. The study used annual time series data for the period 1972-2015; during this period Kenya adopted the crawling exchange rate from the initial fixed exchange rate regime and that Kenya experienced the highest depreciation in its currency. The study used correlational study design to establish the relationship between the real effective exchange rate fluctuations and money supply, external debt, trade balance and inflation. Hypotheses were tested at 5% level of significance. The study employed cointegration and ECM to test both the long run and short run dynamics between the dependent and independent variables respectively. Coefficient of determination( ) was to determine the goodness of fit, it established a 75.84% of the variations in real exchange rate fluctuations are explained by the independent variables and therefore the model was a good fit. From the ECM results, the vector of real effective exchange rate fluctuations in Kenya is error correcting at -11.4179 thus real effective exchange rate fluctuations in Kenya adjust to short run shocks caused by money supply, external debt, trade balance and inflation though not significantly. The study concluded that there exists a positive significant relationship between money supply, trade balance, inflation rate and real effective exchange rate fluctuations in Kenya. However, external debt has a negative but significant relationship with real effective exchange rate fluctuations in Kenya. A deficit trade balance leads to depreciation of the shilling by 0.2951. An increase in money supply also leads to depreciation in the Kenyan shilling by 7.1363 same to an increasing inflation rate (0.1678). An increasing debt burden depreciates the Kenyan shilling by 2.4061. These results are in conformity with the balance of payments theory of exchange rate determination. The study recommends that policy makers should formulate sound credit control policies to control money supply, export promoting policies should be to make the local products globally competitive, inflation rate should be maintained within the set limits and the government should reduce debt burden as much as possible. Master's Thesis

EFFECT OF COUNTY BUDGET DEFICITS ON GROSS COUNTY PRODUCT IN KENYA

2022-01-01T00:00:00Z

EFFECT OF COUNTY BUDGET DEFICITS ON GROSS COUNTY PRODUCT IN KENYA ONYANGO, OWUOTH HABIL Globally, the performance of any economy is determined by the proportion of productive resources available to support its needs. Low resource base compared to needs of any economy, contribute to economic instability, which is a major concern for many countries. Since Kenya established county governments in 2013, these counties have been registering an increase in their budget deficits. Between 2013 to 2017, total county own sourced revenue deficit increased from 16,528 to 25,081 million shillings; total county development budget deficit increased from 48,701 to 68,993 million shillings; and total county recurrent budget deficits increased from 14,965 to 21,166 million shillings. These counties developed their County Integrated Development Plans (CIDPs 2013-2017) to guide their efforts towards economic growth. Within the period, the counties economies grew from 4,263,910 in 2013 to 7,524,710 million shillings as indicated in their Gross County Product -a geographic breakdown of Kenya’s GDP that gives an estimate of the size and structure of county economies. It was important to understand how each of these county budget deficits affect economic growth of counties in Kenya. However, literature shows no consensus whether budget deficits have negative or positive effect on economic growth. These studies, including those done in Kenya limited their scope to use of national level data set, with budget deficits not broken down to own sourced revenue deficit, development budget deficit or recurrent deficits. The purpose of this study was to analyze the effect of county budget deficits on Gross County Product in Kenya. Specific objectives were to; determine the effect of own sourced county revenue deficit on GCP, establish the effect of county development budget deficit on GCP, and examine the effect of county recurrent budget deficit on GCP. The study was modeled on neoclassical economic growth theory of Solow and Swan and correlational research design was employed. Secondary panel data from 2013 to 2017 for all 47 counties was used (235 observations), sourced from Kenya National Bureau of Statistics and Controller of Budget reports. The data was analyzed using panel estimation method of Random Effects model, which was preferred by the Hausman test and used to estimate and interpret results of autoregressive distributed lag model (ARDL). On the first objective, findings showed that own sourced county revenue deficit had a coefficient of -0.45 with a pvalue of 0.013, while the coefficient for its lagged value was-1.03 with a p-value of 0.003. This means that increase in growth rate of own sourced county revenue deficit in the past as well as in the present period have a negative effect on growth rate of Gross County Product. On the second objective, county development budget deficit reported a coefficient of 0.21 with p-value of 0.056 while the coefficient of its lagged value was 0.06 with a p-value of 0.001. This implies that growth in the rate of county development budget deficit of the past had a positive effect on growth rate of Gross County Product. Findings for the third objective showed that county recurrent budget deficit had a coefficient of -0.13 with a p-value of 0.022 and its lagged value had a coefficient of -0.07 with the p-value being 0.110. The results imply that growth in the rate of county recurrent budget deficit in the current period was having a negative effect on the growth rate of Gross County Product. Based on these findings, the study concluded that past as well as present increase in growth rate of own sourced county revenue deficit reduces growth rate of Gross County Product, an increase in growth rate of county development budget deficit in the past increases growth rate of Gross County Product and an increase in growth rate of county recurrent budget deficit in the present period lowers growth rate of Gross County Product. As such, this study recommended for policies that improve own sourced revenue collection, enhance development spending and reduce recurrent deficit spending at county levels.

Effect of Corporate Rebranding Strategy Process On the Non- Financial Performance of Kenya Power Limited

2017-01-01T00:00:00Z

Effect of Corporate Rebranding Strategy Process On the Non- Financial Performance of Kenya Power Limited SUNGUTI, Oyula Marende Dancan

Institutional factors influencing implementation of strategic plans of National Bank of Kenya

2018-01-01T00:00:00Z

Institutional factors influencing implementation of strategic plans of National Bank of Kenya OUKO, Pauline Betty The Kenyan banking industry has grown exponentially since the liberalization of the sector in the 1980s. Although the Kenyan banking sector is largely profitable growing by 400% in a span of 12 years, and thus moving from Ksh. 18.8 billion to 89.2 billion. Over the same period, some individual banks have continually recorded below average performance while some have been put on receivership. According to the Cyton report of 2017, Kenya National Bank posted 42% drop in profit and 10% decrease in compound annual growth rate, the net effect being staff restructure. This has been due to poor leverage of the institutional factors within the organizations. Low profits also contribute to poor implementation of strategic plans because of low or no budgetary allocation. Yet institutional factors can be leveraged to necessitate implementation of strategic plans which can then improve growth rate and even profitability. The purpose of this study was to examine institutional factors influencing implementation of strategic plans. Specific objectives were to: determine the influence of financial resource adequacy; to establish the influence of leadership styles; and determine the effect of organization structure on implementation of strategic plans at the National Bank of Kenya. The study will be guided by Resource Based View theory in correlation study design. The study population constituted 58 staff at the National Bank Kisumu branch and included branch manager, line managers, and supervisors. National bank was selected for having posted 42% drop in profit and 10% decrease in compound annual growth rate. Saturated sampling was used to collect data from 48 staff members while the remaining 10 used for pilot testing. Primary data in form of perception was collected from the respondents using questionnaires while Secondary data was obtained from published materials and unpublished academic reports. Data was analysed using descriptive statistics like mean, standard deviation, frequencies and percentages and inferential statistics through correlation and regresion was used to analyse quantitative data. Validity of the research instrument was established through expert review while the reliability test yielded a Chronbach’s Alpha coefficient of between 0.792 and 0.836. The finding revealed that institutional factors explained 48.7% (R2=0.487) variation in organizational performance. Furthermore, two dimensions of institutional factors namely: financial resource adequacy (β = 0.460, p< 0.05) and organization structure (β =0.453, p = < 0.05) had positive significant effect on implementation of strategic plans. On the other hand, leadership style (β = -0.194, p> 0.05) was found to have insignificant negative effect on implementation of strategic plans. The study concluded that both organization structure and financial resource adequacy were instrumental to the implementation of strategic plans. Therefore, the study recommended that both financial resource adequacy and organization structure should be enhanced while resources directed to leadership styles should be reduced. The results of the study could help the: National Bank of Kenya to leverage on institutional factors and implement strategies hence increased profitability; The government to make policies ensuring more profits by the bank hence more taxes to government;The research community acquire secondary material;and academic community acquiremore knowledge. Masters' Project

Effect of capital market development on economic growth of Kenya

2015-01-01T00:00:00Z

Effect of capital market development on economic growth of Kenya OYOO, Absalom Odep Globally, the role of Capital market development in promoting economic growth has attracted a lot of attention among scholars, with several studies conducted to ascertain the relationship between capital market development and economic growth. In Kenya, for instance, the vision 2030 development plan aims to achieve an annual economic growth of 10% with an investment rate of 30% to be financed mainly from mobilization of domestic resources. However, the empirical evidence linking capital market development to economic growth has been contradictory and inconclusive as to the direction of influence. In addition, most studies that have been conducted in Kenya have studied the two components of capital market (stock market and money market) in isolation, which does not give a holistic insight into Kenya’s capital market. This study analyzed two variables from each component of the capital market. The main objective of this study was to establish the effect of capital market development on the growth of Kenya’s economy. The specific objectives of the study were: to determine the effect of domestic credit to private sector on economic growth; to determine the effect of liquid liabilities of Commercial Banks on economic growth; to determine the effect of stock market capitalization on economic growth and to determine the effect of value traded in the stock market on economic growth. The study was significant in providing policy advise.The study was anchored on endogenous growth theory (the Harrod-Domar model). The study employed correlational research design. The study was conducted in Kenya’s capital market where annual aggregates of domestic credit to private sector; liquid liabilities; stock market capitalization and value traded, for a period of 23 years from 1990 to 2012, were obtained from the World Bank data base. The data were analyzed by use of multiple regression technique. The results obtained indicate that market capitalization has a significant negative relationship with economic growth, with a co-efficient of -0.18, while domestic credit to private sector, liquid liabilities and value traded have a significant positive relationship with economic growth, with co-efficient of 0.34, 1.25 and 0.08 respectively. The coefficient of determination, R2, was found to be 0.996, meaning that the four variables explain 99.6% of the variations in economic growth. Generally, capital market development was found to influence economic growth positively. The study recommends that strategies to enhance domestic credit, liquid liabilities and value traded be put in place. Whereas, policies that reduce market capitalization be implemented as a mechanism of stimulating economic growth as envisioned in Vision 2030. Masters's Thesis

Influence of fiscal, trade and monetary factors on Inflation in Kenya

2018-01-01T00:00:00Z

Influence of fiscal, trade and monetary factors on Inflation in Kenya OVAMBA, Evans Kiganda Inflation has been a topical issue since the 1970s oil price instability which resurged in the 2000s with a rate of 3.6% for advanced economies and 10.2% for Africa. In Kenya, labour unrests have mainly been attributed to inflation that has persistently remained above the Central Bank’s target of 5%. Studies on the determinants of inflation have reported mixed results, focused on aggregated fiscal, trade and monetary factors and analytical techniques inadequate in providing information on the direction of shock transmission between inflation and the factors. This makes the influence of fiscal, trade and monetary factors on inflation uncertain and inconclusive. This study therefore analyzed the influence of fiscal, trade and monetary factors on inflation in Kenya. The specific objectives included establishing; influence of fiscal factors, influence of trade factors and influence of monetary factors on inflation in Kenya. The study was modeled on the demand pull, cost push and monetary theories of inflation and applied correlation research design. Monthly time series data from Central Bank of Kenya spanning 132 months from 2005 to 2015 was used for analysis. Vector autoregressive techniques of Johansen cointegration, vector error correction, variance decomposition, impulse response and Granger causality were used to analyze the relationship between inflation and its influencing factors in Kenya. Results indicated that total government expenditure and total imports had a significant negative long run influence on inflation where a percentage increase in total government expenditure and total imports decreased inflation by 0.59% and 0.86% respectively. On the other hand, total tax, total exports and total money supply had a significant positive long run influence on inflation that was supported by impulse analysis where a percentage increase in total tax, total exports and total money supply increased inflation by 1.38%, 1.39% and 1.63% respectively. There was unidirectional causality from the fiscal, trade and monetary factors to inflation. The study concluded that fiscal, trade and monetary factors influence inflation in Kenya. However, they are highly influenced by recurrent expenditure, indirect taxes, domestic exports and extended broad money. This adds to literature on the determinants of inflation from the Kenyan perspective. In view of this, the study recommends adoption of diverse policies that encompass fiscal, trade and monetary policies that target reduction in taxation, exports, money supply and increase in government expenditure and imports that are likely to lower production costs and product shortages thus leading to a reduction in inflation in Kenya. Phd Thesis

An empirical investigation of the relationship between budget deficits and economic growth in Kenya (1975-2012)

2015-01-01T00:00:00Z

An empirical investigation of the relationship between budget deficits and economic growth in Kenya (1975-2012) OKELO, SIMEO Odhiambo Budget deficit has become a striking and institutionalized feature of most economies of the world. The Kenyan government has continued to reduce inflation (below 10%) and to develop sound fiscal policy that spurs growth. However, from 1970s to 2012, the government continued to experience high and unsustainable budget deficits and dwindling economic growth. Past empirical studies on the relationship between budget deficits and economic growth have come up with mixed results, being either positive or negative. The purpose of this study was to determine the relationship between budget deficits and economic growth in Kenya. The specific objectives were to: determine the impact of budget deficits on private sector investment in Kenya; examine the main determinants of Kenya’s budget deficits; and establish the relevance of Ricardian Equivalence Hypothesis for Kenya. Underpinning theories of the research anchored on the Keynesian, Neoclassical and Ricardian propositions. Correlation research design was used. Saturated sample of time series secondary data for a period of 38 years (1975-2012), purposively selected were used. Modeling technique that incorporates co-integration and error correction method was adopted to validate the models for policy formulation. The models were estimated using Ordinary Least Squares method. The results indicated a positive and significant relationship between lagged budget deficits and economic growth at 1% level with elasticity coefficient of 0.00146 (p= 0.007) and R2 of 96%, congruent with the Keynesian’s assertion that government expenditure spurs economic growth. There was a positive relationship between budget deficits and private investment with elasticity coefficient of 0.0083 (p=0.0000). This supports the crowding-in hypothesis. The main determinants of budget deficits were foreign exchange rate and lagged inflation (positive relationship) as well as terms of trade (negative relationship). In testing the relevance of Ricardian Equivalence Hypothesis, a significant negative relationship was established between national savings and budget deficits with elasticity coefficient of -0.0087 (p=0.0177), hence non relevance of Ricardian Equivalence Hypothesis for Kenya. The study concludes that budget deficits spur economic growth when lagged one period. It is recommended that the government should incur budget deficits over one period lag to increase economic growth and private investment. The government should also pursue stable macroeconomic policies that would influence budget deficits. The government should encourage the culture of savings. The study findings may be useful to government policy makers and also be a source of information to academicians and potential investors. Further research should examine specific expenditures that affect budget deficits in Kenya. PHD Thesis

The determinants of interest rates spread in the Kenyan economy

2015-01-01T00:00:00Z

The determinants of interest rates spread in the Kenyan economy NYANSERA , CyrusOndari There has been an increasing disparity between the lending rates and the deposit rates in Kenya over the last decade. In the Kenyan history, 1982 saw the lowest interest rate spread at 2.3% with the highest spread experienced in 1996 at 16.2%.In 2005 after decreasing to 7.8% from 10.10% in 2004, the spread assumed an upward trend rising to 9.81% in 2010. Despite policy interventions and structural reforms in the financial sector, the spread has consistently risen from the year 2003 up to 2010 with an insignificant drop in year 2011. The causes of this persistently increasing interest rate spread despite the many reforms are not known. This study analyzed the determinants of interest rate spreads in Kenya by focusing on eight banking institutions that significantly control deposits and loans market in the past decade. The study used panel least squares estimation technique on annual data between 2002 to 2011 to analyze the determinants of interest rates spreads as grouped in literature under: Bank-Specific Factors, Industry-specific data and Macroeconomic factors. The main objective of the study was to analyze the determinants of interest rate spread in the Kenyan economy. Its specific objectives were to establish the bank specific factors that influence the interest rate spread, to investigate the macroeconomic factors that influence the interest rate spread and to examine the industry specific factors that influence the interest rate spread in Kenya. The interest rate spread experienced in Kenya over the last decade is higher than that of emerging and developed economies. According to vision 2030 it is recommended at an acceptable rate of five per cent for the purpose of mobilizing savings and credit expansion. Although many efforts have been undertaken in the financial services sector, this vision has not been attained but instead an upward trajectory has been witnessed. The study was carried out using panel quantitative data analysis which involved the panel unit root test; Levin-Lin Chu and Im-Pesaran-Shin tests among other diagnostic tests including normality test, heteroscedasticity, Multicollinearity and Hausman tests. The study also used descriptive statistics such as mean, standard deviation. Due to the nature of the study STATA software was used to analyze the data. The analyzed data was then presented using figures, tables and graphs. Explanatory research design was used. The results revealed that, among the bank specific factors non interest income (0.045), nonperforming loans (0.002) and loan asset ratio (0.004) were significant. In addition among the industry specific factors, liquid asset ratio (0.042) was significant. While the finding revealed that only Treasury bill (0.001) was significant among the macroeconomic factors. The results mean that all those variables which have a P value of below 0.05 are significant for the study and cause the interest rate spreads to widen while those variables whose P values were above 0.05 are statistically insignificant for the study and have little effect on the interest rate spreads in Kenya. The study concluded that non interest income, nonperforming loans, loan asset ratio, Liquid asset ratio and treasury bills rate are the determinants of interest rates spreads in Kenya. It recommends that, the high responsiveness of banks spreads to the Treasury bills rate suggests that private borrowing should be reduced by the government in order to allow banks to lend to the general public since the financial institutions will rather lend to the Government through risk free securities than to general public, banks must continue to seriously deal with the issues of the high levels of non- performing loans and the diseconomies of scale in their operations and if there is to be any success in reducing interest rate spreads to support long- term economic growth, the competitive environment in the banking system must be enhanced. Masters' Thesis