Effect of Selected Macroeconomic Variables on Growth of the Tea Sub-sector in Kenya
View/ Open
Date
2021-11Author
Murithi, Joyce K
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Kenya's subsector of tea was confronted with a difficult macroeconomic climate,
including interest-rate capping in August 2016 and reversed in 2019. Other
macroeconomic issues affecting the industry include: rising price levels,
unpredictability in interest rates, and fluctuation in exchange rates. The Kenyan
currency has been on a consistent decline over the last decade and this might have an
impact on the performance of the tea sub-sector. In addition, the country inflation
levels have also fluctuated significantly. These adverse macroeconomic trends may
lead to serious difficulties with the expansion of the tea subsector. The objective of
this study was to determine the impact that selected macro-economic variables have
on the growth of the tea sub-sector in Kenya. Exchange rates, interest rates, the
unemployment rate, and inflation were all considered independent factors in this
study. The response variable that the researchers attempted to explain was the growth
of the tea subsector.The data was collected on a quarterly basis over a period of ten
years (from January 2011 to December 2020). A descriptive research approach was
employed in the study, with a multiple linear regression model used to examine the
connection between the study variables. The data were analyzed using Statistical
Packages version 24. The study's findings yielded an R-square value of 0.526,
indicating that the chosen independent variables could explain 52.6 percent of the
variance in the teasub-sector's growth in Kenya, while the remaining 47.4 percent was
due to other factors not investigated in this study. The independent factors exhibited a
significant relationship with tea sub-sector growth (R=0.725), according to the
research. The F statistic was noteworthy at a 5% level with a p=0.000, according to
the findings of the ANOVA. This suggests that the model was adequate for explaining
tea sub-sector growth. Further, the findings revealed that exchange rate and
unemployment rate were significant determiners of the tea sub-sector growth and they
had a negative influence. Interest rates and inflation had a negative, although
statistically insignificant, impact on tea sector growth. The study recommends that
there is need to manage the current levels of unemployment since they have a major
impact on tea sub-sector growth. Policy makers should also stabilize the existing
levels of exchange rates as a depreciation of the currency adversely affects tea subsector
growth.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
The following license files are associated with this item: