The Impact of Foreign Direct Investment on Economic Growth, Employment and Poverty Reduction in Uganda

The overarching objective of this study is to measure the impact of Foreign Direct Investment (FDI) on economic growth, employment and poverty reduction in Uganda. The study begins by providing a brief introduction of Uganda’s economy and FDI inflows including political and governance background. Uganda’s economy is classified as least-developed and highly indebted. The study noted first, that economic growth, employment and poverty are multidimensional. Second, tourism was identified as the single largest foreign exchange earner for Uganda. Further to achieve higher levels of economic growth, employment creation and poverty reduction, the Government of Uganda (GOU) introduced fiscal, monetary and commercial policies that included: openness, human capital development and controlling inflation. Following the reforms, FDI was identified as a foreign capital flow which overcomes the problem of private capital limitation in the country. Considering these observations, this study measures the impact of FDI on Uganda’s economic growth, employment and poverty reduction. This study covers the sample period 1985- 2014 employing time-series data