Search results

The purpose of this paper is to examine the potential role of money supply and agricultural informal cross-border trade (ICBT) in Uganda’s food price processes.

The econometric analysis is based on two separate but complementary approaches: vector error correction modeling and Granger causality testing.

The results indicate that long-run domestic food prices adjust to money supply, agricultural output and exchange rate movements. However, the findings do not provide sufficient evidence to support the proposition that agricultural ICBT is an important long-run driver of food price in Uganda. The pair-wise Granger causality test results reveal a unidirectional causality from food prices to agricultural output; unidirectional causality from money supply to food prices; bidirectional causality between food prices and nominal exchange rates; unidirectional causality running from rainfall to food prices; and unidirectional causality running from agricultural ICBT to agricultural output.

Understanding the underlying drivers of food inflation is critically important because food prices are critically important for food security, social stability and general household welfare.

The major innovation in this paper is attempt to model demand side determinants of food prices by focusing on the role of money and ICBT.

The purpose of this paper is to investigate the roles that access formal and informal finance as well as mobile money play in facilitating the choice of coping strategies that households adopt.

The research methodology considers the estimation of binary outcome maximum likelihood probit models for each coping strategy on a vector of covariates that include measures of financial inclusion, household characteristics and community variables.

The author finds that financial inclusion is associated with a higher likelihood of adopting market-oriented strategies such as selling assets or borrowing and lower likelihood for non-market strategies such as reliance on informal networks and reducing consumption.

To the best of the author’s knowledge, this paper provides the first empirical attempt examining the pathways through which financial inclusion may facilitate the choice of coping strategies using nuanced household data.

This study investigates the dynamic causality linkages between fiscal deficits and selected macroeconomic indicators in a panel of five East African Community countries.

The research design is based on panel cointegration tests, panel cross-section dependence tests, panel error correction-based Granger causality tests and panel impulse response functions.

Results show that there is long-run feedback causality among fiscal deficits and each of the variables include gross domestic product (GDP) growth, current account balance, interest rates, inflation, grants and debt service. Short-run Granger causality dynamics indicate that there is feedback causality between fiscal deficits and GDP growth; no causality between fiscal deficits and inflation; no causality between fiscal deficits and current account; no causality between fiscal deficits and interest rates; feedback causality between fiscal deficits and grants; and no causality between fiscal deficits and debt service. Impulse response functions show positive and significant impacts of current account balance, inflation and grants; negative and significant impacts of real GDP growth and lending rates; and insignificant effects of debt service.

While the study examines the dynamic causality between fiscal deficits and selected macroeconomic indicators in the East African Community, the analysis excludes South Sudan due to significant data limitations.

In light of the East African Community's aspirations to achieve convergence on key macroeconomic targets, including the fiscal deficit, this research provides novel insights on fiscal policy determinants and causality dynamics.

The dynamic relationships between fiscal policy and macroeconomic variables may have social implications for welfare, equitable growth and distribution of resources.

With a focus on the East African Community, this paper contributes to the literature on the macroeconomic determinants of fiscal deficits in regional economic communities.

The purpose of this paper is to develop an empirical model for inflation in Uganda, highlighting the role of supply side factors in the domestic agricultural sector.

The adopted empirical analysis is based on a single equation model that exploits cointegration techniques and general-to-specific modeling. The analysis controls for historical, seasonal as well as policy factors such as the effects of the global financial crisis, change in monetary policy regime to inflation targeting and monthly seasonal effects.

Results indicate that disequilibrium in the money, external and agricultural sectors feed into the Ugandan inflation process in the long run. However, the external and monetary sectors have larger long-run effects on inflation than the agricultural sector. Other factors that influence inflation in the short run include: inflation inertia, real output, money supply, exchange rate movements, foreign prices, monetary policy instruments and seasonal factors. In addition, the paper shows that the inflation-targeting policy has been successful in containing inflationary pressures.

These findings suggest that in the long-run monetary policy will continue to play an important role in managing Ugandan inflation through money demand management. The inflationary effects of agricultural supply shocks could be mitigated with appropriate domestic actions. In particular, fiscal policy that targets increased productivity and efficiency in agriculture through increased focus on production, irrigation, storage and transportation could reduce the effects of agricultural supply variability on inflation. In addition, policies intended to improve economic growth by expanding total output, control money supply growth and maintaining stability in the foreign exchange markets will help to reduce inflation.

Studies of inflation and its determinants have dominated macroeconomic debates in the past decades because of the importance of price stability in economic growth and household welfare. The major conclusions from those studies are that: high inflation is detrimental to investment and growth; erodes the purchasing power; reduces household welfare; and exacerbates income inequality. Moreover there is a growing strand of literature establishing a causal link between inflation and conflict. Particularly for agricultural households, the effects of inflation are usually felt through the increase in food prices with implications for consumption and food security. These findings indicate the important macro and social implications of inflation. By focusing on the importance of agricultural supply shocks, the paper contributes to a better understanding of the drivers of inflation and how the macro and social effects can be addressed.

The major contribution of this paper is to try and model an equilibrium relationship in the domestic agricultural sector rather than using proxies such as an output gap measure or rainfall.

The purpose of this paper is to examine the determinants of a household's social capital in the form of community group participation and empirically analyses the roles that social capital plays in helping rural households rebuild productive assets after shocks.

In this paper, social capital is modelled as a household's intensity of group participation measured by the density and active participation in group activities as well as their multiplicative and additive indices. Instrumental variable methods were used to address the problem of endogeneity associated with social capital.

The results indicate that household characteristics such as age, education level, dependence ratio and years of village residence as well as village-level characteristics such as the village population density are critical determinants of social capital. In addition, social capital measured in form of density of participation in group activities and attendance score as well as multiplicative and additive indices of these have significant positive effects on the household ability to rebuild livestock assets.

The authors realize that several weakness in the approach could compromise the validity of the findings. These weaknesses include: the cross-sectional nature of the data, the omitted variable bias, the endogeneity concerns of social capital and the identification strategy, sample size and the dimensions the authors chose to measure social capital. Future research should explore the factors that can help households to engage more in-group activities.

The findings have important implications for government policy especially in areas of agricultural development and poverty reduction. Specifically, governments should pay close attention to the various social groups as they can serve as important channels to achieve better social economic outcomes, including the accumulation of rural assets, as is the case with livestock assets in rural Uganda.

Many governments in Sub-Saharan Africa are constrained to provide basic public goods to the people. This is due to a combination of limited budgets and lack of good leadership. In such circumstances, the people have to rely on their collective/social effort to take advantage of market opportunities. Such opportunities can be accessed using the existing social structures whose norms and the trust between members permit cooperation.

The study contributes to a small but growing empirical literature on social groups and how they can mediate social economic outcomes especially for rural households. The empirical estimations take into consideration the endogeneity concerns associated with social network capital. The paper will be useful for policy makers and researchers who may have a keen interest in the roles that group activities play in agricultural development and poverty reduction.

The purpose of this paper is to investigate how social network capital may facilitate agricultural household market access in Uganda. Specifically, the paper investigates if social network capital has significant positive effects on the ability of households to receive higher prices for coffee.

In this paper, social network capital is modeled using a household utility maximisation problem that is dependent on consumption and social interactions. The authors assume that social network capital mediates economic benefits through its effect on information flow, market intelligence and collective bargaining. The paper uses two-stage least square econometric methods to investigate whether group involvement at the household level helps farmers to access markets with higher prices.

The findings indicate that social network capital, measured in form of density of participation and attendance score, and multiplicative and additive indices of these, have significant positive effects on the ability to receive higher prices for coffee.

The authors realise that several weaknesses in the approach could compromise the validity of the findings. These weaknesses include: the cross-sectional nature of the data, the omitted variable bias, the endogeneity concerns of social capital, sample size and the dimensions that the paper choses to capture social network capital. Future research should explore the factors that can help households to engage more in group activities.

The findings have important implications for government policy especially in areas of agricultural development and poverty reduction. Specifically, governments should pay close attention to various social groups as they can serve as important channels to achieve better market outcomes, as is the for coffee prices in rural Uganda.

Many governments in Sub Saharan Africa are constrained to provide basic public goods to the people. This is due to a combination of limited budgets and lack of good leadership. In such circumstances, the people have to rely on their collective/social effort to take advantage of markets opportunities. Such opportunities can be accessed using the existing social structures whose norms and the trust between members permit cooperation.

The study contributes to a small but growing empirical literature on social groups and how they can mediate social economic outcomes especially for rural households. The empirical estimations take into consideration the endogeinety concerns associated with social network capital. The paper will be useful for policy makers and researchers who may have a keen interest in the roles that group activities play in agricultural development and poverty reduction.

This study explores the economic and sociodemographic factors that influence households' decisions on the type of fuel used for cooking in urban areas in Uganda.

In total, two cross-section data surveyed by the Uganda Bureau of Statistics (UBOS) in 2012/13 and 2016/17 were used to analyze consumption of energy for cooking purposes in urban areas of Uganda. This paper employed a multinomial probit regression model and the corresponding marginal effects to analyze cooking fuel choices, which are biomass, electricity and gas and kerosene combined.

The results showed that household expenditure was statistically significant for the choice of cooking fuel chosen. Furthermore, kitchen type, dwelling type and apartment tenure type are found to be significantly influence the choice of household cooking fuel decisions.

This study takes into consideration the combined influence of the kitchen type, dwelling and tenure type as explanatory variables for the choice of cooking fuel for households in urban areas in Uganda. These factors have not been considered in previous studies done in Uganda, especially within the context of urban households when making choices for cooking fuel.