• Login
    View Item 
    •   Repository Home
    • Research Journal Articles
    • Department of Business Administration.
    • View Item
    •   Repository Home
    • Research Journal Articles
    • Department of Business Administration.
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Effect of Government Infrastructure Investment on Economic Growth in Kenya

    Thumbnail
    View/Open
    Publication 15.pdf (196.9Kb)
    Date
    2020
    Author
    Njiru, Elizabeth W
    Simiyu, Justo M
    Bunde, Aggrey O
    Metadata
    Show full item record
    Abstract
    Government investment in infrastructure is a precursor to the achievement of sustainable economic growth and poverty reduction goals of any economy. Despite shortage of capital, the Kenyan government has continuously invested in both economic infrastructure and social infrastructure with the aim of raising economic growth. However, the growth rate has stagnated at an average of 5% annually for the last 5 years despite the projection of annual growth rate of 10% from 2012 as per Vision 2030. The main objective of this study was to determine the effect of government infrastructure investment on economic growth in Kenya for the period 1990 to 2017. The study adopted Error Correction Model for estimation and conducted the regression analysis using Ordinary Least Squares. Granger causality test found that economic infrastructure investment causes economic growth in Kenya but social infrastructure investment has neutral causality with economic growth. Further, the study found that government investment in economic infrastructure has a positive and significant effect on economic growth in Kenya with a p-value 0.0000 < 0.05 while social infrastructure investment has a negative and insignificant effect on economic growth with a p-value of 0.8798 > 0.05. Additionally, the study established that private investment and labour force have negative and significant effect on economic growth in Kenya. Since infrastructure spending in Kenya is still inadequate, the study recommends the government to increase funds directed to infrastructure investment in the country to the World Bank’s infrastructure investment threshold of 7-9% of GDP, as this will translate to improved productivity as a result of increased physical and human capital leading to actualization of the 10% economic growth rate. The study also recommends complementary government spending to private sector investment since the marginal capital of private capital will be increased leading to higher productivity. Finally, the government should promote conducive environment for private sector investment so that more jobs can be created that will absorb the underutilized or unemployed labour force in the country.
    URI
    http://repository.tharaka.ac.ke/xmlui/xmlui/handle/1/2350
    Collections
    • Department of Business Administration. [31]

    Tharaka University copyright © 2020  Repository
    Contact Us | Send Feedback
    Designed by
    TUN Library
     

    TUN
     

     

    Browse

    All of RepositoryCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

    My Account

    LoginRegister

    Tharaka University copyright © 2020  Repository
    Contact Us | Send Feedback
    Designed by
    TUN Library
     

    TUN