Theses and Dissertations
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Item Effect Of Public Debt On Economic Growth In Kenya(Kca University, 2016) Achwoga, Gideon N.A developing country like Kenya compliments its revenue through public borrowing. The successive governments have always acquired huge sums of public debt to finance national development plans in Kenya. High levels of public debts have mixed effects on economic growth. This examines the effects of public debts on economic growth. Data spanning from 1963 to 2015 was used. The study sought to establish the effect of domestic and foreign public debt on economic growth in Kenya. A descriptive research design was applied. Secondary data obtained from World Bank Sources, Central Bank of Kenya, International financial statistics like the International monetary fund and Kenya National Bureau of Statistics was used for analysis. Data was analyzed using EVIEWS version 7.2. The findings indicated that economic growth is negatively and significantly related to external debt. The results indicated significant and negative associations between GDP and domestic debt. Multiple regression analysis indicated that economic growth is positively and significantly related to domestic debt. The association between debt service and GDP was positive but not significant. Other results also indicated that the association between debt service and GDP was positive and significant. Exchange rate had a negative and insignificant association with GDP. In light of the results and conclusions discussed in the foregoing paragraphs, the government and policymakers in Kenya should consider the following recommendations to improve public debt management. First, the governments should establish and adopt an optimal balance between external and domestic debt to maintain steady economic growth. Although domestic debt had no significant effect on GDP in the short run and a positive effect on GDP in the long run, it cannot be relied on entirely since a rapid increase in borrowing locally has the potential of crowding-out private investments. Second, the negative effect of exchange rate on economic growth is a signal to the central bank and Policy makers that they need to stabilize the local currencies for instance by improving exports. Since debt service causes exchange rate, proper management of debt service is hence a key priority for the government. The study also recommends that prudential fiscal management measures are required to avoid an unnecessary increase in overall public debt. A reduction in borrowing will enable the country to use a greater proportion of their tax revenues for investments rather than repaying loans, thereby increasing economic growth. Furthermore, real exchange depreciation raises the debt burden and negatively relates to GDP. There is thus the need to ensure that exchange is not over-devalued in order to balance two effects.Item Effects Of Public Debt On Economic Growth Of East African Countries(KCA University, 2021) Muoki, Victor M.National debt if properly used can greatly benefit a country and contribute to its economic growth. However, various studies provide mixed findings on the effect of public debt on economic growth in various countries. The purpose of this study was to determine the influence of public debt on economic growth of three east African countries (Kenya, Uganda and Tanzania). Specifically, the study aimed to establish the influence of external concessional public debt, external commercial public debt and domestic public debt on economic growth of the three east African countries. This study applied a causal research design as it sought to assess effect of public debt on economic growth and collect secondary time series data for 57 years (1963 – 2019). The data on public debt and economic growth was collected from World Bank, Central Bank of Kenya, Bank of Uganda, Bank of Tanzania, Kenya National Bureau of Statistics, National Bureau of Statistics, and Uganda Bureau of Statistics. Dynamic panel data regression was used to analyze the collected data. The study findings established that concessional debt and external commercial debt had a significant positive effect on economic growth, while domestic debt had a significant negative effect on economic growth. Based on these study findings, the study makes the following recommendations. First, the study recommends that the three East African countries should source for more external concessional debt through bilateral or multilateral arrangements to plug into their budget deficits, invest in strategic assets and finance projects in neglected sectors. Regarding external commercial debt, the study recommends that the three east African countries should consider this source of funding but ensure that a balance is struck between the different external financing sources. Lastly, the study recommends that the level of domestic borrowing in the three East African countries should be reduced. This is because domestic borrowing is harmful to economic growth of the three countries.