The Micro And Macroeconomic Determinants Of Private Investment In The Manufacturing Sector In Kenya

Kenya continues to record low levels of growth in private investment. This isrndespite the new paradigm that recognizes market mechanism and privaternenterprise as more efficient in generating the economic dynamism that leads torngrowth. This study set out to find the macro and micro economic factors thatrnaffect investment particularly in the manufacturing sector in Kenya.rnEconometric techniques of time series and also a survey were employed tornanalyze this phenomenon. High on the list of the macroeconomic factorsrnnegatively determining private investment is the high and unstable interestrnrates, increasing public debt, dilapidated infrastructure, insufficient expenditurernon education development, low levels of credit to the private sector, the lowrnlevel of GOP and generally, a harsh macroeconomic environment. Thesernfactors not only affect the manufacturers but also the Agriculture and thernService sectors. On the micro level, the macro factors also playa role coupledrnwith other numerous socio-political and economic factors e.g. insecurity,rncorruption and contraband trade. If Kenya is to rid herself from the currentrneconomic quagmire and achieve her stated goal of becoming a NewlyrnIndustrialized Country (NIC) by the year 2020, then it needs to borrow a leafrnfrom the "Asian Tigers" and tackle these issues urgently.

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