Analysis of the effect of poverty on economic growth of Uganda

Abstract

This study aims at analyzing the Analysis of the effect of poverty on economic growth of Uganda. Using secondary time-series monthly data covering the period from 1999 to 2019, this study analyzes the relationship between the economic growth and poverty rate in Uganda. In addition, the dissertation examines the short-run and long-run effect of poverty rate on the economic growth rate (GDP) in the period of analysis. Relevant literature in the research study by various scholars including relevant theories was also cited. Furthermore, economic growth rate is significantly influenced by other key macroeconomic factors such as unemployment. To achieve the required objectives, correlation and regression analysis were used. Specifically, the ARDL model was used to examine both the short-run and long-run effects of the poverty and unemployment rates on the economic growth rate taking care of the lags of the independent variables. In addition, descriptive analysis was used to analyze the characteristics of the different variables in the research study. The study finds that the poverty Rate has a significant influence on economic growth rates, as expected. Empirical results indicate that an increase in the poverty rate is associated with a decrease in economic growth rates. The study also finds that there is short-run and long-run effects on the economic growth rates (GDP) by poverty rates.