ABSTRACT
The study set to examine the relationship between FDI, net exports and foreign exchange rates in
Uganda between 1990 —2014 and it was carried out on the three research objectives which included to:
establish the relationship between FDI and foreign exchange rates in Uganda, establish the
relationship between Net exports and foreign exchange rates in Uganda and to show the effect of
FDI and Net exports on foreign exchange rates in Uganda.
The study adopted a qualitative descriptive correlational research design involving both
quantitative and qualitative approaches in data collection. A time series analysis was adopted and
the use of quantitative techniques to analyze secondary data scientifically to critically conclude the
research objectives, secondary data was collected from World Bank reports, bank of Uganda
international monetary fund data sheets and United Nation Commission on Trade and
Development data sheet among others.
On the trend of foreign exchange rate, the researcher found a general increase in foreign exchange
rate of Uganda between the periods of 1990 to 2006. The only slight decrease in the value of
Ugandan export rate was witnessed between 2006 to 2007, then a slight decrease between 2009
2010 and after a general increase between a period of 2010 to 2014.
Under the trend of foreign direct investment, the researcher got a slight decrease in Foreign Direct investment in the period between 2011 to 2012, and a total decrease between 2012 to 2013 and a general increase between 2013 to 2014. The increase in FDI rate could have been attributed to the
peaceful political climate, and reduction in inflation among others.
The researcher went ahead to determine the mean values of the variables whereby it ‘was found out that Foreign Exchange Rate had a mean of 413.552, Net Exports had a mean of 16.692 while FDI had a mean of 62.86, as shown in the table in the mean column. On the relationship between Net exports and foreign exchange rates in Uganda there researcher found out that Net export is strongly related to foreign exchange rate, most of the points are close
to the fitted trend. This relationship is as a result of high flow of Net export level which leads to low rate of foreign exchange.
The researcher used Pearson’s correlation coefficient to establish the strength of relationship between net export and foreign exchange rate in Uganda whereby a very strong relationship between the foreign exchange and Net export (r~ 0.9263) was seen and there is also a very strong
foreign exchange and FDI (r = 0.8655) the strength of relationship between FDI, net export and foreign exchange rate is determined by the coefficients of determination which the figure above shows that there is a very strong relation between the DV and the IVs. Under regression analysis
of FDI, Net export and foreign exchange rate in Uganda, the researcher used P-Value test analysis.
The researcher recommended that in order to encourage foreign exchange rate, policymakers should encourage FDI and exchange rate to make Uganda a serious contender for Foreign direct exchange and net export, the country needs to be modernly equipped with well-functioning infrastructure and effective vocational and skill training institutions suited to investors’ generic human resource needs. With regard to country development policy, investing in productive
infrastructure is considered to be an instrument to improve the foreign exchange rate ofthe country.
TABLE OF CONTENTS
DECLARATION.
APPROVAL II
DEDICATION ~fl
ACKNOWLEDGEMENT iv
ABSTRACT v
LIST OF TABLES Viii
LIST OF FIGURES ix
CHAPTER ONE 1
INTRODUCTION 1
1.0 Introduction 1
1.1 Background to the Study 1
1.1.1 Historical Review 1
1.1.1 Theoretical Perspective 2
1.1.3 Conceptual Perspective 3
1.1.4 Contextual Perspective 5
1.2 Statement of the Problem 6
1.3 Purpose of the Study 6
1.5 Research Questions 7
1.6 Research Hypothesis 7
1.7 Scope of the Study 7
1.7.1 Subject Scope / Content scope 7
1.7.2 Geographical Scope 7
1.7.3 Time Scope 8
1.8 Significance of the Study 8
1.9 Conceptual Framework 8
CHAPTER TWO 10
LITERATURE REVIEW 10
2.0 Introduction 10
2.1 Theoretical Review 10
2.2. 1 The relationship between FDI and Foreign Exchange rates 10
2.2.2 Relationship between Net Exports and Foreign Exchange Rates 13
2.2.3 Effect of Foreign Direct Investment (FDI) and Net Exports on Foreign Exchange Rates...15
2.3 Research Gaps 18
CHAPTER THREE 19
METHODOLGY 19
3.0 Introduction 19
Vi
3.1 Research Design.19
3.2 Data Collection Instruments 19
3.3 Sources of Data 19
3.4 Validity and Reliability of Data 19
3.5 Data Processing and Analysis 20
3.6 Limitations of the Study 21
3.7 Ethical Consideration 21
CHAPTER FOUR 22
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 22
4.0 Introduction 22
4.1 Level of the Foreign Exchange Rate in Uganda from 1990 to 2014 22
4.2 The Level of the FDI Rate in Uganda (1990 To 2014) 23
4.3 Level of the Net Export in Uganda from 1990 To 2014 24
4.4. The Relationship between FD{ and Foreign Exchange Rates in Uganda 25
4.5 The Relationship between Net Exports and Foreign Exchange Rates in Uganda 26
4.6 Normality Test 27
4.7 Correlations analysis Of Net Export and Foreign Exchange Rate in Uganda 30
4.8 Regression analysis of FDI, Net Export and Foreign Exchange Rate in Uganda 31
CHAPTER FIVE
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 34
5.0 Introduction 34
5.1 Discussion 34
5.2 Summary of the findings 35
5.3 Policy implications 36
5.4 Areas for further Research 37
REFERENCES 38
APPENDICES 41
Appendix I: Record sheet 41
Appendix II: Curriculum Vitae 42
APPENDIX iii: Introduction Letter 46
APPENDIX IV: Research Time Frame 47
Research, S. (2022). Foreign Direct Investment And Net Export As Correlates To Foreign Exchange Rates Uganda (1990 - 2014). Afribary. Retrieved from https://tracking.afribary.com/works/foreign-direct-investment-and-net-export-as-correlates-to-foreign-exchange-rates-uganda-1990-2014
Research, SSA "Foreign Direct Investment And Net Export As Correlates To Foreign Exchange Rates Uganda (1990 - 2014)" Afribary. Afribary, 19 Aug. 2022, https://tracking.afribary.com/works/foreign-direct-investment-and-net-export-as-correlates-to-foreign-exchange-rates-uganda-1990-2014. Accessed 09 Nov. 2024.
Research, SSA . "Foreign Direct Investment And Net Export As Correlates To Foreign Exchange Rates Uganda (1990 - 2014)". Afribary, Afribary, 19 Aug. 2022. Web. 09 Nov. 2024. < https://tracking.afribary.com/works/foreign-direct-investment-and-net-export-as-correlates-to-foreign-exchange-rates-uganda-1990-2014 >.
Research, SSA . "Foreign Direct Investment And Net Export As Correlates To Foreign Exchange Rates Uganda (1990 - 2014)" Afribary (2022). Accessed November 09, 2024. https://tracking.afribary.com/works/foreign-direct-investment-and-net-export-as-correlates-to-foreign-exchange-rates-uganda-1990-2014