Effect of Government Capital Expenditure on Tourism Sector Growth in Kenya

Collins Wekesa Wanjala; Consolata Ngala; Muli Maingi

doi:10.51867/ajernet.4.2.16

Authors

Collins Wekesa Wanjala MSc Economics Student, Masinde Muliro University of Science and Technology, Kenya https://orcid.org/0000-0002-9858-5208
Consolata Ngala Lecturer Department of Economics, Masinde Muliro University of Science and Technology, Kenya https://orcid.org/0000-0003-3629-4947
Muli Maingi Lecturer Department of Accounting and Finance, Masinde Muliro University of Science and Technology, Kenya

DOI:

https://doi.org/10.51867/ajernet.4.2.16

Keywords:

Capital Budgetary Allocation, Government Capital Expenditure, Tourism Sector Growth

Abstract

Tourism is a vital sector of Kenya’s economy by contributing to employment, alleviation of poverty, Gross Domestic Product (GDP), foreign exchange earnings, and balance of payments surplus. Tourism is a productive economic activity that needs a stable macroeconomic environment in terms of budgetary resource allocation for sustainable and continued growth. Thus, this study sought to establish the effect of government capital expenditure on tourism sector growth in Kenya. The study adopted a causal research design using quarterly time series data from 2012 to 2021. The findings revealed that government capital expenditure (t=3.4746, p<0.05), government recurrent expenditure (t=6.1303, p<0.05), and taxation (t=2.8608, p<0.05) had positive significant effects on tourism sector growth in Kenya. The study recommends an increase in capital budgetary allocation for continued growth of the sector which is the main source of foreign revenue in Kenya.

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