Economic Factors and Performance of Agro- input dealers in Kampala Capital City, Uganda

Abstract

This study examined the Economic Factors that influence the Performance of Agro-input Dealers in Kampala Capital City, Uganda. The study objectives were: to determine the extent to which interest rate affects performance of agro-input dealers in Kampala Capital City, Uganda; to establish the extent to which inflation affects performance of agro-input dealers in Kampala Capital City, Uganda and to determine the extent to which exchange rate affects performance of agro-input dealers in Kampala Capital City, Uganda. The study employed a cross sectional design incorporating both quantitative and qualitative methods to data collection with a sample size of 36 respondents derived using Morgan and Krejcie (1970) from a target population of 40 Agro-input dealers in Kampala capital City. Data collected was first edited manually, coded then entered into SPSS version 17 for electronic cleaning and data analysis. The objectives of the study were analyzed using the Factor Analysis. From the results, interest rates, inflation and exchange rates were statistically significant in explaining performance of Agro-input Dealers in Kampala Capital City. Interest rates and performance of Agro-input Dealers were negatively correlated (-0.605) with p-value (0.007); inflation and performance of Agro-input Dealers were negatively correlated (-0.730) with p value (0.004) and exchange rate and performance of Agro-input Dealers were negatively correlated (-0.701) with p-value (0.001). The study concluded that interest rates, inflation and exchange rate are vital factors explaining variations in performance of Agro-input Dealers. From the study, it is recommended that government of Uganda through Bank of Uganda should lower and control the interest rates charged on borrowed funds, continue targeting inflation to keep it in check and monitor the exchange rates and if necessary intervene to stabilize it.