Interest Rates And Private Investment In Uganda (1990 — 2012)

ABSTRACT The study was set to establish the impact of interest rates on private investments in Uganda. To establish the level of interest rates in Uganda from 1990 to 2012, to establish the level of private investments in Uganda from 1990 to 2012 and to establish the relationship between interest rates and private investment in Uganda from 1990 to 2012. The study employed a time series analysis taking into account a correlation research design involving both qualitative and quantitative research approaches for the analysis of secondary data. The study findings were that the there was a steady increase in the levels of interest rates in Uganda for the period of 21 years (1990— 2010). The percentage change of interest rate, taking 1990 as a base year, is 7.4%. However, there was a decline in the interest rate in 1990 and 2006. The average interest rate in Uganda from 1990 to 2010 was 10.185, the deviation away from the mean was (Std,D = 2.9942) with variance of (Var = 8.965).The skewness was (~733) and kurtosis (.020). This means that interest rate increases and decreased over a period of 21 years. It was found that Private investments levels in Uganda over the period of 21 years were decreasing with increases registered over the period of 2000 years and above. The average trend of private investments was (1.3727). The deviation away from the mean was (Std. D = 1.2736) with variance (Var= 1.622). While skewness was (1.278) and kurtosis (.487).Pearson correlation and regression analysis present a figure of significance all above 0.05 implying that no relationship prevail between interest rates and private investments in Uganda.

TABLE OF CONTENTS

DECLARATION

APPROVAL

PAGE

DEDICATION

ACKNOWLEDGEMENT iv

LIST OF ACRONMYS v

TABLE OF CONTENTS vi

ABSTRACT

CHAPTER ONE i

INTRODUCTION 1

1.1 Background to the Study 1

1.2 Problem Statement 5

1.3 Purpose of the Study 6

1.4 Objectives of the Study 6

1.5 Research Questions 6

1.6 Scope of the Study 7

1.6.1 Content Scope 7

1.6.2 Geographical Scope 7

1.6.3 Time scope 7

1.6.4 Theoretical scope 7

1.7 Research hypothesis 8

1.8 Significance of the study 8

1.9 Operational Definitions of Key Terms 9

CHAPTER TWO 10

LITERATURE REVIEW 10

2.1 Theoretical review 10

2.2 Related literature 12

2.2.1 Interest rate 12

2.2.2 Private investments 17

2.2.3 Effect of interest rates on Private investments 21

2.3 Related studies 23