FOREIGN DIRECT INVESTMENT AND FOREIGN AID IN UGANDA

Abstract

Foreign direct investment (FDI) and foreign Aid play an instrumental role in the growth of the economy of any country globally. The growth of any economy is measured through its gross domestic product. However, GDP is determined by all the output in the country. Further asserts that the Gross Domestic Product is comprised of the total value of all the goods and services produced to be sold in public markets and those which are not for the public market. The purpose of this study was to examine the effect of FDI on GDP growth in Uganda, effect of development assistance and official aid on GDP growth in Uganda, compare Aid disbursements to Uganda from key bilateral donors, International Financial Institutions (IFIs), and multilateral organizations, compare Aid disbursements to Uganda from different countries, compare Aid disbursements to Uganda from IFIs, compare Aid disbursements to different sectors of Uganda and compare Aid disbursements to Uganda from multilateral organizations. The study used a descriptive survey design with only quantitative approaches. The study used secondary data sourced from Development Initiatives (DI) and World Bank development indicators. The analysis involved descriptive analysis, normality test, One-way ANOVA, two-sample t-test, and regression analysis. Results indicated that FDI had a negative but non-significant effect on GDP growth in Uganda from 2000 to 2021 (P-value (0.411) >0.05) and that development assistance and official aid received in Uganda had a negative but non-significant effect on GDP growth from 2000 to 2020 (P-value (0.257) >0.05).