Graduate School of International Studies Ajou University
Publication Year
2013-08
Language
eng
Alternative Abstract
Although the Euro-American crisis had its effect on Uganda, capital inflows continued to grow between the periods of 2000-2010. The pre-crisis period (2000-2007), was dominated by trade, FDI and remittances from EU and USA. The post crisis period (2009+) saw a shift in capital flows from 2 significant players that are EU and USA to 6 players including the BRICs and African countries. The change meant that the Euro-American crisis had acted as a turning point towards Uganda's economy in terms of diversification, increased quality and quantity of cash inflows.
This paper aims at analyzing the diversification, quality and quantity of capital inflows from EU, USA, BRICs and African countries between the periods of 2000-2010. It will also examine the role of the BRICs and African countries towards the capital inflows and if these inflows have a dynamic effect on the Uganda economy. This study will be a qualitative conductive study aimed at analyzing the change in capital inflows as a result of the Euro–America Crisis.
The results of this study showed that between 2000 and 2007 (pre-crisis period), there was less diversification of capital sources with only 2 major sources that is EU and USA. Capital inflows were very slow paced and the quality was not good enough to trigger faster economic growth. The post–crisis period however saw the BRICs and African countries join the Ugandan trade and investment market increasing the number of players. The quality of investment grew and triggered higher economic growth by increasing the level of investment. This showed that diversity breeds quantity. The improved quality as a result of increased diversity therefore attracts more investment. It demonstrated the multiplier effect that exists between diversification, quality and quantity of cash flows to the economy of Uganda.
Key Words: Euro-American crisis, Uganda, capital inflows, diversification, quality