24 42 trend analysis 421 foreign direct investment

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4.2 Trend analysis 4.2.1 Foreign Direct Investment (FDI) The study sought to establish the trend in the movement of Foreign Direct Investment (FDI) in Kenya over the study period. The findings were as shown in the Figure 4.1 Please edit the vertical scale to indicate (Millions in USD) 0 50000000 100000000 150000000 200000000 250000000 300000000 350000000 FDI Year FDI ($) Figure 4.1: Quarterly trend for Foreign Direct Investment (FDI) analysis from 2001 to 2015 The figure 7 indicates that the general trend of Foreign Direct Investment (FDI) has been fluctuating. Between the year 2001 and 2007, there was a low inflow in Foreign Direct Investment (FDI). This was attributed to political tension. From the year 2007 to 2008, Foreign Direct Investment (FDI) rose drastically then declined and stabilized between the year 2006 and 2007. There was a sharp increase in inflation rate in the year 2008 to 2013 and this was associated with the post-election violence which destabilized the county’s economy. Foreign Direct Investment (FDI) has been on an increasing trend from 2013 to 2015 which can best be attributed to suitable political environment and improved ease of doing business in Kenya. 25
4.2.2 Government Expenditure The study sought to establish the trend in the movement of Kenya Government Expenditure with reference to growth changes in GDP. The findings were as shown in the Figure 4.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 Government Expenditure Year % of GDP Figure 4.2: Quarterly trend for Government Expenditure analysis from 2001 to 2015 Figure 4.2 indicates that Government Expenditure gradually increased from 2002 to 2007 though in a fluctuating rate. The results further indicated that in the subsequent year i.e. from 2008 to 2009, the Government Expenditure significantly dropped. This drastic decline in Government Expenditure was mainly due to the low performance within the economy due to the post-election violence which occurred in the years 2007/2008 and thus this trickled down to the performance of individual sectors and thus negatively impacting on the Government Expenditure. Following the recovery of the economy Government Expenditure then rose in 2009 to 2011 and a slight decline in 2012 and this decline was mainly attributable to the state of affairs in the country which was awaiting its elections and thus at this time the investor confidences were negatively impacted for fear of the repeat of a state of political instability in the country, then stabilizing in the year 2014 and 2015. 4.2.3 Private Investment The study sought to find out the trend in the movement of quarterly Private Investment over the study period. The findings were as shown in the Figure 4.3 26
Change to Private Investment 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 Privet Investment Figure 4.3: Quarterly Private Investment analysis from 2001 to 2015 Figure 4.3 above show that interest rates have been increasing steadily throughout the study period. This increase is associated with the increase in disposable income of the period.

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