Financial Development and Economic Growth in Uganda.
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Date
2024
Authors
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Publisher
Kabale University
Abstract
The study investigated the relationship between financial development and economic growth in Uganda. Its objectives included assessing the impact of savings and investment, financial liberalization, and trade openness on economic growth. Employing a correlational research design, statistical analyses such as mean, median, mode, standard deviation, range, and correlation coefficients were utilized to examine multicollinearity. The Ordinary Least Squares (OLS) model was employed, alongside diagnostic tests for autocorrelation and heteroskedasticity, to interpret the results.
The statistical analyses provided insights into the central tendency, variability, and range of values for each variable. The findings indicated a strong positive linear relationship between savings and investment (Indcp) and trade openness (Intrade) with a correlation coefficient of 0.7843, while savings and investment (Infld) showed a strong negative linear relationship with financial liberalization (Ingcf) with a correlation coefficient of -0.7229. The regression table revealed statistically significant coefficients, notably indicating that an increase in gross domestic product per capita (gdpcg) led to an unexpected decrease in savings and investment (Indcp) by 2.599777 units.
The diagnostic tests showed no significant evidence of heteroskedasticity, autocorrelation, or instability in the regression model. Based on these findings, the study recommended that the government should strengthen financial institutions by enhancing regulatory frameworks and governance to ensure stability and trust in the financial system. Additionally, promoting financial inclusion through measures like expanding bank branches, advancing mobile banking services, and improving financial literacy programs, especially in rural areas, was also recommended.
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Keywords
Financial Development, Economic Growth, Uganda
Citation
Kansiime, Lucky (2024). Financial Development and Economic Growth in Uganda. Kabale: Kabale Univerisity.