Input Factors and Industrial Sector Growth in Uganda (1986-2024)
Abstract
This study investigates the effects of input factors on the growth of Uganda’s industrial sector. Specifically, it examines the impact of Gross Fixed Capital Formation (GFCF), investment in education, and population growth. A longitudinal research design was used to analyse changes over time, utilising secondary data from reputable national and international sources. The data was processed using STATA 14, which is effective for time series analysis. Findings show that increasing investment in GFCF, such as factories, machinery, and infrastructure, significantly boosts industrial growth, particularly in the short term through job creation and increased output. However, in the long run, the benefits diminish unless complemented by improvements in skilled labour and institutional support. In contrast, investment in education showed no direct effect on industrial growth, possibly due to a mismatch between education outputs and industrial job demands. Additionally, population growth alone was not found to drive industrial expansion, indicating that sheer numbers in the workforce do not guarantee increased productivity. The study recommends that the Government of Uganda continue prioritising investment in industrial infrastructure, especially in energy, transport, and manufacturing hubs. To improve education's relevance, greater emphasis should be placed on technical and vocational education and training (TVET), along with stronger industry-academic linkages and curriculum reforms. Furthermore, policymakers should promote labour-intensive industries like agro-processing, textiles, and construction, and support entrepreneurship and inclusive employment incentives, particularly targeting youth and women.
Downloads
References
African Development Bank. (2021). Uganda: Infrastructure and Industrialization in Focus.
African Development Bank. (2021). Uganda: Infrastructure and Industrialization in Focus. www.afdb.org
Agrawal, G. (2015). Foreign Direct Investment and Economic Growth in BRICS economies: A Panel Data Analysis. Journal of Economics Business and Management, 3, 421-424. https://doi.org/10.7763/JOEBM.2015.V3.221.
Almeida, A., Garcia, C., & Silva, R. (2020). Vocational Education and Industrial Sector Development: A Global Review of TVET Programs and Their Impact on Manufacturing Growth. Education Economics, 28(2), 111-130.
Behuria, P. (2021). The political economy of reviving industrial policy in Uganda. Oxford Development Studies, 49(4), 368-385.
Buda, G., & Ricz, J. (2023). Industrial symbiosis and industrial policy for sustainable development in Uganda. Review of Evolutionary Political Economy, 4(1), 165-189.
Calabrese, L., Golooba-Mutebi, F., & Mendez-Parra, M. (2019). Industrial development in Uganda: an assessment of the policy framework. London: ODI.
Canning, D., & Pedroni, P. (2020). Human Capital and Productivity Growth: Education and Technology in Industrial Sectors. Journal of Development Economics, 143, 47-61.
Diao, X., McMillan, M., & Rodrik, D. (2019). The recent growth boom in developing economies: A structural-change perspective (pp. 281-334). Springer International Publishing.
Dinh, H., & Vincent, K. (2023). Capital formation and industrial development in Africa: An empirical assessment. African Journal of Economic Policy, 30(1), 45–63.
Esaku, S. (2021). The short-and long-run relationship between trade openness and economic growth in Uganda. Cogent Economics & Finance, 9(1), 1999060.
Gelb, A., Ramachandran, V., Meyer, C. J., Wadhwa, D., & Navis, K. (2020). Can Sub-Saharan Africa be a manufacturing destination? Labour costs, price levels, and the role of industrial policy. Journal of Industry, Competition and Trade, 20, 335-357.
Gonzalez, M., & Rios, A. (2021). "Education investment for social equity and inclusion," International Journal of Educational Development.
Hagger, M. S., & Hamilton, K. (2024). Longitudinal tests of the theory of planned behaviour: a meta-analysis. European Review of Social Psychology, 35(1), 198-254.
Hunziker, S., & Blankenagel, M. (2024). Longitudinal Research Design. In Research Design in Business and Management: A Practical Guide for Students and Researchers (pp. 201-220). Wiesbaden: Springer Fachmedien Wiesbaden.
James, M., Eria, H., & Ibrahim, M. (2023). Sectoral Growth Patterns and Unemployment in Uganda. East African Journal of Business and Economics, 6(1), 59-78.
Kiggundu, M. (2020). Industrialization in Uganda: Opportunities and Challenges. Kampala: Makerere University Press.
Kiggundu, M. (2020). Industrialization in Uganda: Opportunities and Challenges. Kampala: Makerere University Press.
Kipyego, K., & Ndirangu, L. (2021). The impact of gross fixed capital formation on industrial growth in East Africa. Journal of Development and Economic Studies, 9(2), 112–127.
Kumar, S., & Patel, N. (2020). "Role of government policies in fixed capital formation," Public Economics Quarterly.
Lee, J., & Park, K. (2022). "Investment in education and its impact on economic growth," Education Economics Journal, 2022).
Matsuda, H., & Watanabe, A. (2024). A comparative study of population management approaches in infectious disease control, population management of fisheries and wildlife, and integrated pest management in agriculture. Population ecology.
Mbonyinshuti, E., & Lwiza, N. (2020). Education and Industrialization in Sub-Saharan Africa: A Focus on Skills Development for Growth. African Development Review, 32(4), 567-589.
Nguyen, L., & Tran, T. (2020). Investment in STEM Education and its Impact on Industrialization in Emerging Economies. International Journal of Industrial Economics, 62(4), 123-138.
Odhiambo, N. M. (2020). Gross fixed capital formation and industrial output in Sub-Saharan Africa: A causality analysis. African Development Review, 32(3), 278–290.
OECD. (2020). Education and Innovation for Industrial Growth: Global Trends and Policy Insights. OECD Publishing.
Okafor, I.G., Ugochukwu, U.S. and Chijindu, E.H. (2016) Foreign Capital Inflows and Nigerian Economic Growth Nexus: A Toda Yamamoto Approach. European Journal of Accounting, Auditing and Finance Research, 4, 16-26
Onyinyi, B., & Asiimwe, N. (2024). Key drivers of investment initiatives in Uganda's pharmaceutical industry. Social Science & Medicine, 344, 116558.
Osuji, E. (2015). Foreign Direct Investment and Economic Growth in Nigeria: Evidence from Bounds Testing and ARDL Models. Journal of Economics and Sustainable Development, 6, 205-211.
Pradhan, R. P., Arvin, M. B., & Hall, J. H. (2021). Capital formation and industrial development in BRICS: A panel data approach. Economic Change and Restructuring, 54(1), 23–42.
Pulstova, M. (2016). Effects of Foreign Direct Investment and Firm Export in Economic Growth: Evidence from Uzbekistan. European Journal of Business and Management, 8, 45-59.
Rahman, S. (2023. "Diversification strategies for industrial sector growth in emerging economies." Journal of Economic Development.
Rodrik, D., Diao, X., McMillan, M., & Ellis, M. (2022). Africa’s Manufacturing Puzzle: Evidence from Tanzanian and Ethiopian Firms.
Rugasira, J., Moses, A., Byarugaba Mbiito, J., Makumbi, R., Kyotuheire, J., & Asiimwe, J. (2022). Green Manufacturing and Environmental Sustainability in Selected Manufacturing Entities in Kampala District, Uganda.
Rumanzi, P. I., Turyareeba, D., Kaberuka, W., Mbabazize, R. N., & Ainomugisha, P. (2021). Uganda’s growth determinants: a test of the relevance of the neoclassical growth theory. Modern Economy, 12(1), 107-139.
Sansom, B. (2024). Traditional economic systems. In The Bantu-speaking peoples of southern Africa (pp. 135-176). Routledge.
Sharma, R., & Patel, M. (2021). "Industrial sector growth and employment: The global nexus." International Journal of Employment Studies.
Solow, RM (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94.
Srinivasan, K., & Gupta, R. (2023). "The role of fixed capital formation in economic growth and development," Economic Growth and Development Studies.
Uganda Bureau of Statistics. (2023). Uganda Economic Report. www.ubos.org
Uganda Central Bank. (2021). Uganda Financial Sector Overview. www.bou.or.ug
Uganda Development Forum (2015). The Political Economy of Uganda’s Political Stability. Uganda National Planning Authority.
Uganda Electricity Regulatory Authority. (2021). Energy Access and Infrastructure Development in Uganda. www.era.or.ug
Uganda Electricity Regulatory Authority. (2021). Energy Access and Infrastructure Development in Uganda.
Uganda Investment Authority. (2020). Uganda Industrial Sector Report.
Uganda Investment Authority. (2023). Industrial Sector Report. www.ugandainvest.go.ug
Uganda Tourism Board. (2023). Tourism and Hospitality in Uganda. www.ugandatourism.org
Ullah, S., & Khan, A. (2022). Gross fixed capital formation and industrial growth: Evidence from South Asia. Asian Economic and Financial Review, 12(4), 307–321.
Umaru, A., Gambo, E. and Pate, H.A. (2015). Foreign Direct Investment and the Growth of the Nigerian Economy. Journal of Economics and Development Studies. 3, 193-211. https://doi.org/10.15640/jeds.v3n1a10
UNESCO. (2020). Inclusive Education and Industrial Growth: Linking Educational Access to Sustainable Industrial Development. UNESCO Publishing.
Uwubanmwen, A.E. and Ogiemudia, O.A. (2016). Foreign Direct Investment and Economic Growth: Evidence from Nigeria. International Journal of Business and Social Sciences, 7, 43-57.
World Bank. (2022). Uganda Economic Update: Industrialization and Economic Growth. www.worldbank.org.
World Bank. (2022). Uganda Economic Update: Industrialization and Economic Growth.
Copyright (c) 2025 Nicholas Kyatukwire, Benjamin Musiita, Namanya Betrum
This work is licensed under a Creative Commons Attribution 4.0 International License.
