Effect of Balance of Payment Deficit On Economic Growth of Uganda

Table of contents

Declaration ............••..•.......•..•.............••....••.......................•...•........... ... ii

Approval. ............•••••.......•••••...........•••.••............•.••••........•••.•.•............. iii

Dedication ........................................................................................ .... iv

Acknowledgement .................................................................................. v

Table of contents ................................................................................... vi

Abstract .............................................................................................. ix

List of figures and tables ............................................................................ x

Abbreviations ........................................................................................ xi

CHAPTER ONE ............................................................... ...................... 1

INTRODUCTION ..................................................................... !

I.I Background ofthe study ........................................................................ l

I .2 Statement of the problem ........................................................................ 2

1.3 Objective of the study ........................................................................... 2

1.4 Purpose of the study .............................................................................. 2

1.5 Significance of the study ........................................................................ 2

1.6 Scope of the study ................................................................................ 3

I. 7 Research questions ............................................................................... 3

CHAPTER TWO .....•...••.....•..••..........••.••......••........•••......•••.•......••..••••. .. .4

LITERATURE REVIEW ............................................................ 4

2. I Introduction ................................................................................. .••.• .4

2.2 Balance of payment ........................................................................... ... 5

2.2.1 Balance of payment deficit ................................................................... 5

2.2.2 Diagrammatic exposition of bop statement ................................................ 6

2.2.3 Economic growth .............................................................................. 7

2.3 UGANDA'S ECONOMIC STATUS ......................................................... 7

2.4 UGANDA'S EXTERNAL SECTOR DEVELOPMENTS ................................. S

vi

2.4.1 Imports ....••..........•.•..............••••............••••...........•••............•......•.•. 8

2.4.2 Official and private transfers .•.•.............•.•.•................•........•..•....•.•....... 9

2.4.3 Foreign direct investments •............••••.•................••.......•••••................... 9

2.4.4 External debt payments •.•.........•..•..........................•...............••....•...•.•. 9

CHAPTER THREE .....•.•••.....••.••.•••..........•••••.•..........•.••..........•.••... ......... 10

METHODOLOGY .................................................................. 10

3.1 Introduction •........••••••.•......••••••...........••••••.•....•..••••........•••••...... ........ 10

3.2 Sources of data ......•........•..•.••..........••..•..........••..•.. ........•...............•... 10

3.2.1 Primary sources ...•.•.••......•.••••.•............•..........•.•..........•......... .......•.• 10

3.2.2 Secondary sources ...........••............•.•...........••................................... ll

3.3 Population study ••••.....••.••••.......••••••...........••.........•.•........••................ 11

3.4 Sampling design •......•...........••..............••..........•............••.......••...•....•. 12

3.5 Measurement scales •••........•.•••........•••••••......•.••.........•.••......•.•••••.•••..... 12

3.5.1 Trust ............................................................................................ 12

3.5.2 Commitment .................................................................................. 12

3.5.3 Attitudinalloyalty ........................................................................... l2

3.6 Data processing and analysis ................................................... .............. 12

3.7 Limitations met in research and other general constraints ............................... l3

3.8 Questionnaire design on effect of bop deficit on economic growth (case study

Uganda) .............................................................................................. 13

CHAPTER FOUR ........................................................................... ....... 14

PRESENTATION AND ANALYSIS OF THE FINDINGS .................. 14

4.1 1NTRODUCT10N .............................................................................. 14

4.1.1 The purpose of the study ................................................................... .. 14

4.1.2 Areas of emphasis under study ............................................................. 14

4.2 NATURE AND QUALITY OF UGANDA'S OUTPUT (EXPORTS) .................. lS

4.3 NATURE OF UGANDA'S IMPORTS ...................................................... 17

4.4 DIRECTION OF UGANDA'S TRADE ..................................................... 17

4.5 TRADE BALANCE ........................................................................... 20

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4.6 COMPOSITION AND LEVEL OF UGANDA'S SA VINGS ........................... 20

4.7 UGANDA'S ECONOMIC GROWTH LEVEL ............................................ 21

4. 7 .I Level of capital, financial and debt indicators in Uganda 2003/4. ; ................... 24

4.7.2 Domestic debt ................................................................................. 24

4.7.3 External debt indicators ..................................................................... 25

4. 7.4 Relationship between economic growth indicators ...................................... 27

4.8 OVER ALL BALANCE OF PAYMENT POSITION OF UGANDA .................. 27

4.9 DISCUSSION OF FINDINGS ............................................................... 29

CHAPTER FIVE .................................................................................... 30

SUMMARY, RECOMMENDATIONS, CONCLUSION AND

REFERENCES ................................................................................... 30

5.1 INTRODUCTION .............................................................................. 30

5.2 SUMMARY ..................................................................................... 30

5.3 RECOMMENDA TION ........................................................................ 31

5.4 OTHER AREAS FOR FURTHER RESEARCH .......................................... 31

5.5 CONCLUSION ................................................................................. 32

REFERENCE ........................................................................................ 33

APPENDICES ....................................................................................... 34