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Browsing by Author "Kilimani, Nicholas"

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Accelerating Progress towards Achieving Productive Youth Employment and Decent Work
(Institute of Development Studies, 2017) Corbett, Hannah; Kilimani, Nicholas
Realising full, productive employment and decent work for all features prominently among the Sustainable Development Goals (SDGs). In many developing countries, especially in Africa and South Asia, youth constitute nearly a third of the population. Current projections suggest that a billion more young people will enter the job market over the next decade. Hence, issues of youth employment have risen up the political agenda at both international and national levels. Avenues for youth employment creation on a substantial scale must be sought as a matter of urgency. This will involve a re-evaluation of the different issues around labour demand and supply, in addition to rethinking how young people’s entrepreneurial spirit can be harnessed.
Agricultural Productivity and Household Welfare in Uganda: Examining the Relevance of Agricultural Improvement Interventions
(The Palgrave Handbook of Agricultural and Rural Development in Africa, 2020) Kilimani, Nicholas; Nnyanzi, John Bosco; Okumu, Ibrahim M.; Bbaale, Edward
Agriculture in sub-Saharan Africa remains a strong candidate for driving growth, alleviating poverty, and enhancing food security (Asfaw et al. 2012). Improving the productivity, proftability, and sustainability of smallholder farming is therefore one critical pathway for improved welfare for the major- ity of the region’s population (World Bank 2008). What is vital to note is that achieving agricultural productivity growth will not be possible without devel- oping and disseminating yield-enhancing technologies since it is no longer feasible to meet the needs of the increasing population through the expansion of cultivable area (Asfaw et al. 2012). Agricultural research and technologi- cal improvements are considered as the vehicles through which agricultural productivity can be increased. A combination of those would result in income growth, asset accumulation, rural employment creation, and overall welfare improvement. In the absence of such innovations, poverty as well as meeting the demand for food will inevitably result in environmental and natural resource degradation as farmers encroach on forests and wetlands in search for fertile “virgin” land.
China-Africa Economic Relations: The Case of Uganda
(African Economic Research Consortium (AERC), 2007) Obwona, Marios; Guloba, Madina; Nabiddo, Winnie; Kilimani, Nicholas
China and Uganda have a long diplomatic history dating as far back as the post independence era. During the period of 1962-1985, bilateral relations between the two countries remained steady in spite of the regime changes in Uganda. However, the two countries saw relatively few high-level exchanges with each other during the time. In 1971, at the 26th General Assembly of the United Nations (UN), Uganda voted in favor of the resolution on the restoration of China's lawful seat in the world body. Bilateral relations between the two countries entered a new stage of development after the National Resistance Movement came to power in 1986, with bilateral co-operation expanding and mutual high-level exchanges increasing. Uganda backed China's stance for two times at the sessions of the UN Human Rights Commission in 1996 and 1997. In 2000, Uganda supported the bill put forward by China on the maintaining and observing of the Anti-Ballistic Missile Treaty in the UN.
Counting the cost of drought induced productivity losses in an agro-based economy: The case of Uganda
(Economic Research Southern Africa (ERSA), 2016) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich; Roos, Louise
Climate variability can affect economies directly through its impact on agricultural output, and indirectly, through its effect on the activi- ties of down-stream industries and household welfare. This paper uses a Computable General Equilibrium model with a disaggregated agricultural sector to analyse the impact of a drought on the Ugandan economy. The losses were assessed with respect to GDP, agricultural output, employ- ment, the trade balance and household consumption. The drought effects were shown to vary by sector. The fall in employment within the agricul- tural industries was less compared to the output losses. At a macro level, exports declined, while at a household level, the terms of trade gains mit- igated part of the potential welfare losses thereby reducing consumption, but to a lesser degree. The findings indicate that a drought can cause substantial losses to the economy. The need for targeted interventions to mitigate such drought impacts is therefore critical.
Crop Commercialization and Nutrient intake among Farming Households in Uganda
(The African Economic Research Consortium, 2021) Kilimani, Nicholas; Buyinza, Faisal; Guloba, Madina
Agricultural commercialization is seen as a pathway towards rural economic transformation as it is expected to enhance a wide array of household welfare indicators. This study examines the channels through which household nutrient intake is influenced in the process of crop commercialization. This was investigated using LSMS-ISA survey data for Uganda using the control function econometric approach. The results show that commercialization affects nutrient intake via crop income. Another crucial finding was that while rural-based households registered higher nutritional gains from crop commercialization, they were less commercialized on average. The role of markets as a key factor in the agricultural commercialization process was confirmed; households that had access to produce markets are more commercialized and have better nutrient intake. While male-headed households were found to practice more commercialization, their households have less nutrient intake compared to their female headed counterparts.
Economy-wide impact of drought induced productivity losses
(Disaster Prevention and Management: An International Journal, 2018) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich
The purpose of this paper is to investigate how a drought which initially affects agricultural productivity can ultimately affect an entire economy. The study aims to assess the magnitude of the impact as well as highlight key issues that can inform the implementation of drought mitigation programmes. Design/methodology/approach – The paper presents the literature on the economic impact of drought and uses a computable general equilibrium model where productivity shocks are applied to the agricultural industries following which the resulting impacts on the rest of the sectors of the economy are obtained. Findings – The findings show that the key macroeconomic variables, namely, real GDP, industry output, employment, the trade balance and household consumption are negatively affected by the drought shock. Practical implications – The results point to the fact that in the absence of drought mitigation mechanisms, the occurrence of even a short drought as modelled in this paper can impose substantial socioeconomic losses. Originality/value – First, a general equilibrium framework which uses climate and economic data when evaluating the social-economic impacts of drought is used. Most studies employ partial equilibrium analysis in analysing drought impacts on specific sectors or crops within a limited geographical area. Others use global or multi-regional models which impose averages on the observed impacts. The current study provides valuable insights on the potential damage which droughts can impose on a single economy. This gives a basis for decision making to support drought mitigation policies and programmes.
Estimation of Disaggregated Impacts of Education Expansion on Economic Growth in Sub-Saharan Africa
(Modern Economy, 2018) Nnyanzi, John Bosco; Kilimani, Nicholas
Underpinned by evidence from the theories of endogenous growth which stress the role of human capital accumulation in enhancing growth, this pa- per investigates the disaggregated impact of school enrolment on economic growth in Sub-Saharan Africa (SSA) for the period 1995-2016. The analysis is based on the augmented Solow, and Mankiw models and employs the Gener- alized Method of Moments (GMM) technique that takes care of endogeneity in a dynamic panel environment. The results point to a significant but differ- ential impact of educational expansion in facilitating economic performance in the SSA region. Essentially, the growth enhancing impact of education de- pends on the type of education with secondary education yielding the largest impacts. The gender disaggregated model results show that and secondary school and primary enrolment yield higher growth effects relative to tertiary enrolment. Most interestingly and contrary to existing literature on the gen- der disaggregated impact of education on growth, the education of girls is seen to yield higher growth effects relative to boys. Based on evidence of the positive impact of girl-child education, policy interventions to support and sustain girl child education in Sub-Saharan Africa ought to be encouraged.
Financial Development and Economic Growth in Uganda
(The IUP Journal of Financial Economics, 2007) Kilimani, Nicholas
This study provides the empirical findings on the relationship between financial development and economic growth in Uganda from 1970 to 2002. The results support the McKinnon-Shaw hypothesis, which suggests that removal of distortions in the financial sector stimulates economic growth. In Uganda, there have been financial sector reforms since 1992. These factors help to explain the positive relationship between financial development and economic growth in the country. The study uses a dummy variable to examine the effect of financial sector reforms. The coefficient of the dummy variable is positive and significant, implying that the changes induced by the liberalization of the economy had a positive impact on real economic growth in Uganda
How important are remittances to savings? Evidence from the Latin America and the Caribbean Countries
(IZA Journal of Development and Migration, 2022) Nnyanzi, John Bosco; Kilimani, Nicholas; Oryema, John Bosco
This paper investigates the direct and the indirect roles of migrant transfers in the saving behaviors of the Latin America and Caribbean (LAC) countries during the period 1997–2018. Using the autoregressive distributed lag (ARDL) panel estimation technique, the results based on the Pooled Mean Group approach provide strong evidence of the importance of inward remittances to savings. On average, an increase in inward remittances by 1% leads to about 0.10% increase in savings ceteris paribus, but the effect is quantitatively larger in the short-run than in the long-run, albeit more significant in the latter case. Quite outstanding here is the observation of the detrimental role of remittances on savings in the long-run once governance quality in aggregate and disaggregated forms are controlled for, suggesting possible adverse effects of remittances for economic development in the long-run. Nevertheless, macroeco- nomic stability as well as institutional quality, foreign direct investment (FDI), and foreign aid were found to be important moderators of the remittances–savings linkage. For the latter two variables, emphasis is on complementarity rather than substitutability between remittances, aid, and FDI. While in the short-run remittances appear to perform better in enhancing sav- ings in countries where an improvement in corruption control is visible, political rights and civil liberties compliment migrant transfers in propelling savings in the long- and short-runs, respectively. Moreover, remittances are found to play a major role in ameliorating the adverse effects of the financial crisis on savings, just as they are observed to function as a lifeline to savings in countries with increasing macroeconomic instability in form of inflation, in the long-run. The findings are robust to the use of alternative estimation techniques. Policy recom- mendations are suggested.
The Impact of China-Africa Aid Relations: The Case of Uganda
(The African Economic Research Consortium, 2010) Guloba, Madina; Kilimani, Nicholas; Nabiddo, Winnie
China and Uganda have a long diplomatic history dating as far back as the post independence era. During the period 1962-1985, bilateral relations between the two countries remained steady in spite of the regime changes in Uganda. According to the information from the China Consulate in Uganda, development assistance from China to Uganda overtime has risen to the tune of US$4-5 million annually. Since the establishment of diplomatic relations the Government of China has continued to provide development assistance to Uganda in the form of interest-free loans and grants to a cumulative value of approximately US$80 million in 2003 although the bulk of China’s aid to Uganda is in the form of non-concessional loans.
Internal innovations, foreign technology and productivity in Sub-Saharan Africa’s manufacturing
(Research square, 2022) Bbaale, Edward; Kilimani, Nicholas; Okumu, Ibrahim Mike; Tumwebaze, Henry
Internal firm innovations and external knowledge/technology transfer are key for spurring the growth of firms and economies. We investigate whether firms that engage in such innovations are more likely to be productive than others as well determine if external knowledge transfers may have an effect on labor productivity mediated by the existence of internal absorptive capacity (generated by human capital and R&D). Using the World Bank Enterprise Survey of 26 African countries and employing both OLS and 2SLS, we find that firms that engage in innovations experience more growth. Most fundamentally, importation of inputs alone in the absence of other innovations does not maximize firm productivity. Finally, firms with a higher absorptive capacity in addition to the other innovations enjoy higher efficiency gains from their imported inputs irrespective firm ownership and size. Government should pursue policies that enhance internal absorptive capacity so as to enable firms tap the global opportunities.
Mitigating the Effects of the Credit Crunch through Trade: The Case of Uganda
(African Economic Research Consortium (AERC), 2009) Kilimani, Nicholas
The global financial crisis is envisaged to cause substantial global economic instability in the foreseeable future. More worrying however is the fact that the developing countries, which at the start of the crisis seemed to be far away from its effects (first round) will most likely bear a considerable share of its blunt (through the second round effects). In the developing world, Sub-Saharan Africa is likely to be severely affected largely because of the high level of susceptibility of most of its economies to external shocks (through the various transmission channels) and also from the fact that these economies had steadily started to be integrated into the global economy over the last one and half decades. This paper analyzes how Uganda could exploit export market diversification as one of the possible responses to the potential impacts of the global financial crisis. It provides an overview of the possible impact of the crisis on the macroeconomic outlook and ways in which the effects can be mitigated with regard to casting a wider export destination for Uganda’s products. The analysis indicates that Uganda can diversify her export markets by capitalizing on the regional market as well as emerging markets in Asia, the Middle East and Europe.
Predicting BRICS stock returns using ARFIMA models
(Applied Financial Economics, 2014) Aye, Goodness C.; Balcilar, Mehmet; Gupta, Rangan; Kilimani, Nicholas; Nakumuryango, Amandine; Redford, Siobhan
This article examines the existence of long memory in daily stock market returns from Brazil, Russia, India, China and South Africa (BRICS) countries and also attempts to shed light on the efficacy of autoregressive fractionally integrated moving average (ARFIMA) models in predicting stock returns. We present evidence which suggests that ARFIMA models estimated using a variety of estimation procedures yield better forecasting results than the non-ARFIMA (AR, MA, ARMA and GARCH) models with regard to prediction of stock returns. These findings hold consistently for the different countries whose econo- mies differ in size, nature and sophistication.
Real exchange rate undervaluation, regional integration and services sector performance: evidence from the East African Community
(Journal of Economic Structures, 2022) Kilimani, Nicholas; Nnyanzi, John Bosco; Oryema, John Bosco
We undertake to estimate the efects of real exchange rate misalignment and regional integration on the service sector performance in selected countries from East Africa during the period of 1991–2017. The main fndings, based on the traditional Pooled Mean Group ARDL technique as well as the alternative panel Cross-Sectional Autore- gressive distributed lag (CS-ARDL) approach render support for an undervaluation-led services sector performance as well as the importance of regional integration in the observed linkage. Additional evidence reveals that both the monetary policy and the fscal policy are key channels via which currency undervaluation impacts on the services sector output. The existence of non-linearities in an inverted U-shaped curve is equally confrmed in the data, where small and moderate undervaluations spur service sector performance just as large undervaluations after some threshold hinder it. Exchange rate volatility is found detrimental to the services sector in the long run. Policies that would help promote the underlying catalysts of undervaluation, curtail exchange rate volatility as well as those that promote deeper regional integration should be strengthened. Likewise, undervaluation policies would yield optimal benefts to the services sector once they are accompanied by well-calculated monetary and fscal policies.
Trade Liberalization, Export and Import Growth: Evidence from Uganda
(Makerere University, 2009) Kilimani, Nicholas; Sebaggala, Richard
The study explores the impact of trade liberalization on export and import growth in Uganda. A number of developing countries have opened up their own economies to take full advantage of the resultant opportunities for economic development through trade. Proponents of trade liberalization envisage positive results emanating from the increased competition in the sector. For instance, liberalization aids competition in the market, by increasing the basket of goods and services with better quality and lower prices. However, trade liberalization in developing countries has been criticized for increasing import penetration on the pretext of opening up the sector to more competition. The reason is that trade policy reforms tend to have a more immediate effect on the imports than on the exports. This concern has motivated researchers to investigate whether or not the impact of trade liberalization has been greater on export growth than on import growth. This is because Uganda is one of the countries to have implemented significant economic reforms, including the liberalization of the trade regime, over the last two decades and a half. These reforms have been both external and domestic. Substantial progress has been made to reduce tariff and non-tariff barriers through the EAC. The study investigated the issue using macro and micro analysis of the Ugandan economy. The macro analysis was employed by estimating the export and import models estimated using Vector Error-Correction modeling (VECM) using time series macroeconomic data for the period 1981-2009. The results of the study suggest that trade liberalization has led more to growth in imports than exports. The macro study findings are in line with previous observations made by Morrissey, et al., (2003); Santos-Paulino (2003); Santos-Paulino & Thirlwall (2004) and Hye & Mashkoor (2010). With regard to the micro analysis several, issues under the trade sector were highlighted that could be linked to the macro evidence which were; larger growth in imports than exports. Such critical issues included the adverse effect of the dismantling of the marketing boards, the inadequacy of the trade sector infrastructure, the low value addition and limited research and dissemination of the ever-changing trends in international trade regarding the products on high demand, the standards required to access such markets as well as the absence of value chains in the tradeables sectors. These have served to inhibit export growth. These issues were manifested at a macro level analysis for instance in the weak significance of the coefficient of the foreign income as well in that of the reel exchange rate in the export growth model
Vulnerability to climatic variability: An assessment of drought prevalence on water resources availability and implications for the Ugandan economy
(University of Pretoria South Africa, 2015) Kilimani, Nicholas
The volatile changes in climate are increasingly becoming a threat to many economies globally. This study assesses Uganda’s vulnerability to climatic variability in the context of how these volatile changes in climate are likely to affect long-run water resources availability. This is done by using household survey data, rainfall data as well as findings from a water resource accounting study on Uganda. First, we use the results from the water accounts to establish the current level of demand for available water resources. Second, these findings are mirrored to the drought prevalence results with a view to highlight the potential adverse affects on water availability, and ultimately economic activity in Uganda. Whereas the country’s water resource accounting position shows that the current level of water resources is still adequate to meet current de- mand, drought is affecting economic activity primarily in the agricultural sector since it is rain-fed. It is also affecting the water recharge system as a big proportion of precipitation is lost through evapo-transpiration. This has implications for long-run water availability for the country. The findings point to the need for policy interventions that can ensure opti- mal water use in the economy. These may include improved hydrological planning and the development of water supply infrastructure.
Wage Differentials in South Africa's Labour Market: An analysis using micro-econometric techniques
(2013) Razak, Aarifah; Kaninda, Alain; Chetty, Dhevasha; Kilimani, Nicholas
This report investigates the existence of wage differentials between part-time and full-time employees in South Africa. Considering that the sample used was obtained from a non-randomized observational study, the Oaxaca-Blinder Decomposition, the Nopo (2004) Matched Decomposition, Propensity Score Matching and Inverse Probability Weighting techniques were used to obtain estimates of wage differentials. The Oaxaca-Blinder results indicate an unexplained wage premium of R 49.25 to part-time employment which dominates the portion attributable to differences in observed endowments. The Nopo Matched Decomposition results indicate an hourly wage premium of R 47.22, with Endowment explaining 20.97% of the observed pay gap. Using Propensity Score Matching, an hourly wage premium to part-time workers of R47.22 was obtained before matching and R50.90 after matching is achieved. The IPW technique yields a wage premium to part-time workers of R47.9 when using the Average Treatment Effect (ATE) as the weight and R52.93 when the Average Treatment Effect on the Treated (ATT) is used.
Water taxation and the double dividend hypothesis
(Water Resources and Economics, 2015) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich
The double dividend hypothesis contends that tax policies which are aimed at protecting the environment can potentially yield other benefits for the economy. However, empirical evidence of the potential impacts of environmental taxation in developing countries is still limited. This may be partly due to the limited use of environmental tax policies in economic and environmental management in many of these countries. This paper seeks to contribute to the literature by exploring the impact of a water tax in a developing country context, with Uganda as a case study. Policy makers in Uganda are exploring ways of raising revenue by taxing environmental goods such as water. Whereas their primary focus is to raise revenue, this study is aimed at demonstrating how taxes on environmental goods can potentially yield other benefits beyond addressing a country's fiscal needs. This study employs a computable general equilibrium model to shed light on the impact of a water tax policy when a tax is accompanied by a plough-back scheme of the same magnitude. We seek to establish whether a water tax policy that is accom- panied by a revenue plough-back scheme can induce more growth, employment and industry output. Whatever the degree of regressivity resulting from the tax, it is possible to design a policy that benefits the economy. The policy was also checked for sustainability using a long-run water demand scenario. The results show that water demand remains more or less on the same trajectory and in fact, a higher level of dividends is realized.
Youth Employment in Developing Economies: Evidence on Policies and Interventions
(Institute of Development Studies, 2017) Kilimani, Nicholas
Based on a synthesis of the existing academic and policy literature, this article undertakes a situational analysis of youth employment in developing countries. The article analyses existing interventions across sectors and provides insights into how they can be harnessed to generate employment opportunities, citing examples of specific projects. This has been undertaken with a view to bringing to light interventions that have been proven to work, as well as demonstrating the sources of failure. Finally, the article distils key emerging issues related to human capital and the business environment. These have been shown to be binding constraints to higher productivity, and can be used as inputs to shape policy discourse around youth employment.

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