| dc.description.abstract | Agriculture is the key driver of Kenya's economic growth and will continue to play a
significant role for many years to come. In addition to accounting for 30% of the
nation's GDP, the agriculture sector generates over 60% of export revenue, 18% of
formal employment, and 60% of informal employment. Furthermore, the sector
provides around 65% of the revenues of rural families in the country and 75% of the
raw materials used in manufacturing. The Kenyan government has been enacting
important macroeconomic policies to boost economic performance through higher
agricultural productivity, particularly from 1993 to 2022. This may have contributed
to the country's GDP increasing despite low agricultural productivity and rising
unemployment. The general objective of this study was to establish the effect of
macroeconomic factors on the agricultural productivity in Kenya. Specifically this
study sought to: examine the effect of Unemployment on agricultural Productivity in
Kenya, determine the effect of Foreign Direct Investment on agricultural Productivity
in Kenya and finally to establish the effect of public debt on Agricultural productivity
in Kenya. This study was anchored on the Malthusian theory ,Coub Douglas theory,
and Keynesian theory. This study adopted a causal research design and used time
series data from Kenya National Bureau of Statistics and World Bank spanning from
years 1993 to 2022. This study employed E-VIEWS software version 10 to analyse
the data both descriptively and by inferential statistics.Correlational analysis indicated
a very weak negative relationship (r = -0.0479) between the agricultural productivity
and Unemployment; a moderate positive relationships ( r= 0.3213) between Foreign
direct investment and agricultural productivity and there was also a strong positive
relationship ( r = 0.65907) between Public debt and agricultural productivity.
Augmented Dickey –Fuller test for unit root revealed presence of unit at integrated
levels I (0) and I (1), but on first difference the variable was stationary showed, while
F-Bound tests revealed no cointergration among variables. Multiple regression
analysis confirmed the significant negative effect of unemployment with a coefficient -0.5805 and p value 0.000<0.05. Findings also revealed a positive significant effect of
foreign direct investment on agricultural productivity with a coefficient of 0.3661 and
p value 0.0014<0.05 Further, public debt equally had a positive and significant effect
on agricultural productivity with a regression coefficient 0.1038 and p value
0.0072<0.05. The post-estimation diagnostics test indicated that the regression
residuals data was normally distributed, independent variables were not correlated and
the regression residuals were homoscedastic and not serially auto correlated. The
CUSUM test demonstrated that the model was fit for policy making. This study
concluded unemployment had negative significant effect while foreign direct
investment and public debt had positive significant effect on agricultural productivity
in Kenya. This study recommends that government should; develop and implement
sustainable subsidy programs to curb unemployment rates, Access and use of modern
agricultural technologies and mechanization to increase productivity along selected
value chains, external loans for agricultural productivity must be monitored to ensure
that they are appropriately channeled into productive agricultural usage for the
Kenyan economy | en_US |
