The Role of Inflation in the Perfomance of Manufacturing Firms in Uganda Case Study: Mukwano Industries Limited

Abstract

This research was carried out to investigate the effect of inflation on the performance of the Ugandan manufacturing sector. Due to the continuing poor performance of the Ugandan manufacturing sector, the researcher tried to look at some of the different dimensions of inflation such as demand pull, cost push, core, and headline inflation that could be responsible for this poor performance. As a result the objectives of the study were; the role of headline inflation in the performance of manufacturing firms, relationship between core inflation and the performance of manufacturing firms, role of cost push inflation in the performance of manufacturing firms, and the relationship between demand pull and the performance of manufacturing firms.

The methodology used was both quantitative and qualitative techniques for collecting analysis, and interpretation of data. The findings were obtained through the use of questionnaires and document reviews. 70 questionnaires were sent out and only 40 questionnaires were returned, and it was on this basis that analysis using SPPS was performed.

The study revealed that inflation indeed does affect the performance of Mukwano industries limited. It was proved that indeed there exists a relationship between core inflation and the performance of Mukwano industries, it was proved that there exists a relationship between demand pull inflation and performance of Mukwano industries. Additionally the study uncovered that cost push and headline inflation do affect the performance of Mukwano industries. The researcher made some recommendations basing on the findings, such as coming up with defence measures to ward off inflationary pressures as to reduce the effect it has on the performance of the firm.

Login to download()