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Makerere University MAKERERE UNIVERSITY COLLEGA OF BUSINESS AND MANAGEMEMT SCIENCES SCHOOL OF STATISTICS & PLANNING ASSESSMENT OF THE FACTORS AFFECTING THE LEVEL OF INVESTMENT IN UGANDA: A CASE STUDY OF NAMANVE INDUSTRIAL AREA BY KAWERE TONNY 15/U/6123/PS A DISSERTATION SUBMITTED TO THE SCHOOL OF STATISTICS AND PLANNING IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE AWARD OF DEGREE OF BACHELOR OF SCIENCE IN BUSINESS STATISTICS OF MAKERERE UNIVERSITY AUGUST, 2019 . i ii DEDICATION I dedicate this report to the Almighty God, my late beloved parents and my dearest sisters Nakiddu Irene, Nannozi Birungi Rachael, and my elder brothers and friend for their endless care and tireless parental and financial support. May the Almighty God bless them abundantly. iii ACKNOLWEDGEMENT First and foremost, I would like to thank the Almighty God for seeing me through the entire course and more so this research project. Special gratitude goes to my Supervisor, Mr. Musoke Edward for his tireless support in guiding me throughout this exercise. My sincere appreciation goes to my dearest guardians, my sisters and brothers for their support and prayers throughout my entire course. I would also like to express my sincere gratitude to all my lecturers at the School of Statistics and Planning (SSP), Makerere University from whom I have learned from not only the training in my field of study, but they have also contributed positively towards the shaping of my life. Lastly, let me express my sincere gratitude to all my fellow students and friends, Babirye Jovia, Kayunga Charles, Nakitende Joan, Mwesigwa Stanley, Nkwenge Samalie, my discussion group mates and the entire BBS Class of academic year 2015 at large for the wonderful experience we have shared throughout the entire course and for their inputs which have positively shaped my life, skills and attitudes to face the challenges in the world and I am looking forward to wonderful friendships in life. May the Almighty God bless you all. iv TABLE OF CONTENTS DECLARATION ................................................................ Error! Bookmark not defined. APPROVAL ....................................................................... Error! Bookmark not defined. DEDICATION .................................................................................................................... iii ACKNOWLEDGEMENT ................................................. Error! Bookmark not defined. TABLE OF CONTENTS ..................................................................................................... v LIST OF TABLES, DIAGRAM AND EQUATIONS ................................................... viii ABSTRACT ........................................................................................................................ ix CHAPTER ONE: INTRODUCTION ................................................................................ 1 1.1 Background of the study ............................................................................................... 1 1.2 Statement of the Problem ............................................................................................. 2 1.4 Objective of the study ................................................................................................... 3 1.4.1 Specific objectives ..................................................................................................... 3 1.4.2 Research Hypotheses ................................................................................................. 3 1.5 Scope of the study ........................................................................................................ 3 1.6 Significance of the Study ............................................................................................. 4 1.7 Conceptual framework ............................................... Error! Bookmark not defined. CHAPTER TWO: LITERATURE REVIEW ................................................................... 8 2.1 Introduction. ................................................................................................................. 8 2.2 How given factors affect the level of investment ......................................................... 9 v 2.3 Relationship between infrastructure and investment .................................................. 12 2.4 Relationship between the level of taxation and investment in Uganda ...................... 14 2.5 Empirical Framework ................................................................................................. 16 2.6 Related Cited literature ............................................................................................... 17 2.7 Research gap ............................................................................................................... 19 CHAPTER THREE: METHODOLOGY ........................................................................ 20 3.1 Introduction. ............................................................................................................... 20 3.2 Research Design ......................................................................................................... 20 3.3 Study area ................................................................................................................... 20 3.4 Study Population ........................................................................................................ 21 3.5 Sampling procedure and Sample size ......................................................................... 21 3.5.1 Sampling Procedure................................................................................................. 21 3.5.2 Sample selection ...................................................................................................... 21 3.6 Data collection methods ............................................................................................. 22 3.7 Data collection tools ................................................................................................... 22 3.8 Data Quality control ................................................................................................... 23 Reliability of the instruments ........................................................................................... 23 3.9 Data analysis ............................................................................................................... 24 3.10 Ethical Considerations .............................................................................................. 26 CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION ................................. 27 vi 4.1. Demographic characteristics of the respondents ....................................................... 28 4.2 Project ownership ....................................................................................................... 30 4.3 Most appropriate measure of investment ................................................................... 30 4.4 Bivariate Analysis ...................................................................................................... 31 4.4.1 Factors that affect the level of investment in Uganda ......................................... 31 4.4.2 Relationship between infrastructure and investment ........................................... 33 4.4.3 Relationship between the level of taxation and investment in Uganda ............... 35 4.5 Multivariate Analysis ................................................................................................. 37 CHAPTER FIVE: (SUMMARY, DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS) ................................................................................................. 40 5.1 Introduction ................................................................................................................ 40 5.2 Summary .................................................................................................................... 40 5.2.1 Factors affect the level of investment in Uganda .... Error! Bookmark not defined. 5.2.3 Relationship between infrastructure and investmentError! Bookmark not defined. 5.2.3 Relationship between the level of taxation and investment in Uganda ........... Error! Bookmark not defined. 5.3 Conclusion .................................................................................................................. 40 5.4 Recommendation ........................................................................................................ 41 References ........................................................................................................................... 42 Appendix 1: Questionnaire ............................................................................................... 44 vii viii LIST OF TABLES AND DIAGRAM Table 4.1: Demographic characteristics of the respondents................................................. 28 Table 4.2: Project ownership ............................................................................................... 30 Table 4.3: Most appropriate measure of investment ............................................................ 31 Table 4.4: Factors that affect the level of investment .......................................................... 32 Table 4.5: Relationship between infrastructure and investment……………………..........32 Table 4.6: Relationship between the level of taxation and investment……………………34 Conceptual framework…………………………………………………………5 Table 4.7: Coefficients of the Model…………………………………………………..….35
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