Monetary Policy Convergence within the EAC: A Focus on Interest Rate and Exchange Rate

This study was conducted to establish whether the key variables in monetary policy transmission mechanisms are converging within the East African Community. This region is eyeing having an economic union and subsequently a monetary union hence the significance of investing developments in the monetary sector. The analysis used panel data from the year 2005 to 2020 for five EACs. To test for convergence of interest rates and exchange rates, the analysis employed; unit-root test, sigma convergence, co-integration tests, and finally used the panel fixed effect model to establish the impact of the two variables on the GDP. The analysis shows that in the short run, there is no convergence in interest rates but there is convergence in exchange rates. However, in the long run, the two monetary policy variables are co-integrated indicating that the region is doing well in terms of integration in the financial sector in their preparation to form a common trade area and monetary union. The analysis of the impact of the two variables on economic growth shows that only the exchange rate is significant, therefore, the region should strive to foster a stable exchange rate regime to realize increased economic growth

Foreign Direct Investment And Economic Growth: An Empirical Analysis Of Kenyan Data

The paper investigates the main drivers of real Gross Domestic Product growth in Kenya as well as those that drive the foreign direct investment (FDI) in Kenya. It is widely acknowledged that FDI has potential benefits that accrue to host countries. The view suggests that FDI is important for economic growth as it provides much needed capital, increases competition in host countries and helps local firms to become moreproductive by adopting more efficient technology. Kenya’s record in attracting FDI from the 1980s has been poor though it was a favoured destination in the 1970s.The study findings show that FDIs in Kenya are mainly market-seeking and these require growing GDPs, political stability and good infrastructure, market size as well as reduction in corruption levels. The prevalence of crime and insecurity would be impediments to FDI inflow. The policy implications of this study are that Kenya’s FDI’s tend to be mainly market seeking and for this reason policy makers in Kenya should focus on improving political stability, emphasize the development of good infrastructure and growing the country’s GDP. This should be coupled with a serious attempt at reducing corruption levels as well as a serious assault on the prevalence of crime and insecurity which are major impediments to this type of FDI inflows. Keywords: Foreign Direct Investment, Economic Growth, Determinants, Keny

Export Propensity and Intensity of Kenyan Manufacturing Firms: An Empirical Analysis

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Foreign Direct Investment And Economic Growth: An Empirical Analysis Of Kenyan Data

The paper investigates the main drivers of real Gross Domestic Product growth in Kenya as well as those that drive the foreign direct investment (FDI) in Kenya. It is widely acknowledged that FDI has potential benefits that accrue to host countries. The view suggests that FDI is important for economic growth as it provides much needed capital, increases  competition in host countries and helps local firms to become moreproductive by adopting more efficient technology. Kenya’s record in attracting FDI from the 1980s has been poor though it was a favoured destination in the 1970s.The study findings show that FDIs in Kenya are mainly market-seeking and these require growing GDPs, political stability and good infrastructure, market size as well as reduction in corruption levels. The prevalence of crime and insecurity would be impediments to FDI inflow. The policy implications of this study are that Kenya’s FDI’stend to be mainly market seeking and for this reason policy makers in Kenya should focus on improving political stability, emphasize the development of good infrastructure and growing the country’s GDP. This should be coupled with a serious attempt at reducing corruption levels as well as a serious assault on the prevalence of crime and insecurity which are major impediments to this type of FDI inflows. Keywords: Foreign Direct Investment, Economic Growth, Determinants, Keny

Effect of Transport Infrastructure and Institutions on Inter-Regional Trade in Sub-Saharan Africa

The study investigates the role of transport infrastructure and quality of institutions on trade between the East African Community and three other regional blocs in Sub-Saharan Africa using panel data for the period between 2000 and 2018. By employing gravity model for trade and Poisson-Pseudo Maximum likelihood estimator, the study finds that transport infrastructure facilitates inter- East African Community trade. Additionally, improvements in regulatory quality of the East African Community Partner States and control of corruption of the importing regional blocs have positive effect on East African Community’s exports. The findings therefore suggest the need for additional investment in transport related infrastructure and improvement in quality of institutions of the East African Community Partner States for more trade

Effect of Transport Infrastructure and Institutions on Inter-Regional Trade in Sub-Saharan Africa

The study investigates the role of transport infrastructure and quality of institutions on trade between the East African Community and three other regional blocs in Sub-Saharan Africa using panel data for the period between 2000 and 2018. By employing gravity model for trade and Poisson-Pseudo Maximum likelihood estimator, the study finds that transport infrastructure facilitates inter- East African Community trade. Additionally, improvements in regulatory quality of the East African Community Partner States and control of corruption of the importing regional blocs have positive effect on East African Community’s exports. The findings therefore suggest the need for additional investment in transport related infrastructure and improvement in quality of institutions of the East African Community Partner States for more trade