SAVINGS, INVESTMENT AND ECONOMIC DEVELOPMENT IN KENYA
Obainoke FelixEromosele, Ph.D, Odefemi Akinyemi Tunde and Okojie Ruth Eniriana
Volume 11 Issue 1
Abstract
The study investigated the relationship between savings, investment and economic development in Kenya for a period of 33 years (1990 to 2022). The specific objectives of the study were to find out whether total consumption from GDP, Net Investment in Government non-financial assets, government spending consumption expenditure and household final consumption expenditure (private consumption), consumer price index and GDP deflator significantly affects economic development in Kenya. To this reason, the study employed the fully modified least square (FMOLS) to analyse the data. The results from the analysis indicate that the long run movements in economic development in Kenya can only be effectively predicted by the level of Domestic Saving (DSAV), Investment (INV) and consumption level (CONS), while interest rate (INTR) and Inflation rate (INFL) failed the 5 percent significant level. The study recommends that since investment significantly impact economic development in Kenya the government should ensure sustained investment growth level in order to constantly enhance economic development. This capital investment allows for research and development a first step to taking new products and services to the market which invariably promotes economic development in Kenya. Keywords: Consumer Price Index, Economic Development, Investment, Private Consumption, Savings
Download Paper