4.2 Trend analysis4.2.1 Foreign Direct Investment (FDI) The study sought to establish the trend in the movement of Foreign Direct Investment (FDI) inKenya over the study period. The findings were as shown in the Figure 4.1Please edit the vertical scale to indicate (Millions in USD)050000000100000000150000000200000000250000000300000000350000000FDIYearFDI ($)Figure 4.1: Quarterly trend for Foreign Direct Investment (FDI) analysis from 2001 to 2015The figure 7 indicates that the general trend of Foreign Direct Investment (FDI) has beenfluctuating. Between the year 2001 and 2007, there was a low inflow in Foreign DirectInvestment (FDI). This was attributed to political tension. From the year 2007 to 2008, ForeignDirect Investment (FDI) rose drastically then declined and stabilized between the year 2006 and2007. There was a sharp increase in inflation rate in the year 2008 to 2013 and this wasassociated with the post-election violence which destabilized the county’s economy. ForeignDirect Investment (FDI) has been on an increasing trend from 2013 to 2015 which can best beattributed to suitable political environment and improved ease of doing business in Kenya.25
4.2.2 Government ExpenditureThe study sought to establish the trend in the movement of Kenya Government Expenditure withreference to growth changes in GDP. The findings were as shown in the Figure 18.104.22.168.60.822.214.171.124.8Government ExpenditureYear% of GDPFigure 4.2: Quarterly trend for Government Expenditure analysis from 2001 to 2015Figure 4.2 indicates that Government Expenditure gradually increased from 2002 to 2007 thoughin a fluctuating rate. The results further indicated that in the subsequent year i.e. from 2008 to2009, the Government Expenditure significantly dropped. This drastic decline in GovernmentExpenditure was mainly due to the low performance within the economy due to the post-electionviolence which occurred in the years 2007/2008 and thus this trickled down to the performanceof individual sectors and thus negatively impacting on the Government Expenditure. Followingthe recovery of the economy Government Expenditure then rose in 2009 to 2011 and a slightdecline in 2012 and this decline was mainly attributable to the state of affairs in the countrywhich was awaiting its elections and thus at this time the investor confidences were negativelyimpacted for fear of the repeat of a state of political instability in the country, then stabilizing inthe year 2014 and 2015. 4.2.3 Private InvestmentThe study sought to find out the trend in the movement of quarterly Private Investment over thestudy period. The findings were as shown in the Figure 4.3 26
Change to Private Investment2001200220032004200520062007200820092010201120122013201420150500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,000Privet InvestmentFigure 4.3: Quarterly Private Investment analysis from 2001 to 2015Figure 4.3 above show that interest rates have been increasing steadily throughout the studyperiod. This increase is associated with the increase in disposable income of the period.