Effect of government expenditure on economic growth of Uganda for the period 2009-2019

Abstract

The main purpose of this study was to assess the effect of government sector expenditure on the economic growth of Uganda for the period spanning between 2009-2019 and it specifically assessed the effect of expenditure on works and transport, Education, Energy and Mineral Development, the agriculture sector and lastly the health sector to the economic growth of Uganda using annual data for the period 2009-2019. This study relied purely on secondary data which was annual data downloaded from Bank of Uganda Data website. Descriptive statistics were obtained to assist in determining the nature of the data as well as summarizing and simplifying national aggregates, in addition, the Spearman’s Correlation was executed to find out whether there was any relationship between two continuous variables and finally an OLS linear regression for predicting economic growth by government expenditures. Results revealed that economic growth significantly depends on three main sectors namely works and transport sectors, energy and minerals and water and environment. Water and environment play a vital role in improving the health of the nationals by providing safe water which ensures that the nationals are healthy and can actively engage in productive activities in various sectors most especially the agricultural sector. In order to boost the level of investment and saving, the country needs to invest hefty in national security, energy and minerals, works and transport and water and environment. There is need to increase expenditure into the works and transport sector in order to broaden access to markets for goods and services in the economy. Coordinated efforts for both the parents and government are called upon to join hands in a collective cost sharing technique to succumb school drop outs in a bid to enhance skills and knowledge in the country as it is found to be positively associated with GDP growth of Uganda.