FACTORS INHABITING GROWTH AND PROFITABILITY OF PRIVATE INVESTMENT IN MIGORI COUNTY
BY:
NYAMOHANGA JULIUS NGOINA
REGISTRATION NUMBER: K24/6198/2011
A RESEARCH PROPOSAL SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
AWARD OF DEGREE OF BACHELOR OF ECONOMICS AND STATISTICS.
SEPTEMBER-NOVEMBER 2013.
DECLARATION
This research proposal is my original work and has not been presented for a degree award in any
university.
NAME
: NYAMOHNGA JULIUS NGOINA
REGISTRATION NUMBER: K24/6198/2011
SIGNATURE
: ……………………………….. DATE………………………
This research proposal has been submitted for review with my approval as a university supervisor.
LECTURERS NAME
: DR.JENIFFER NJARAMBAH
DEPARTMENT
: APPLIED ECONOMICS
SCHOOL
: ECONOMICS
KENYATTA UNIVERSITY
SIGNATURE
…………………………….. DATE………………………..
TABLE OF CONTENTS
DECLARATION…………………………………………………………………………………………………………………………………………i
TABLE OF CONTENTS……………………………………………………………………………………………………………………………….ii
ACRONYMS AND DEFINITION OF TERMS………………………………………………………………………………………………….ii
ACKNOWLEDGEMENT…………………………………………………………………………………………………………………………….iv
ABSTRACT…………………………………………………………………………………………………………………………………………….…v
CHAPTER 1: INTRODUCTION
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Background information……………………………………………………………………………………………………..1
Statement of problem………………………………………………………………………………………………………..3
Research questions…………………………………………………………………………………………………………….3
Research objectives……………………………………………………………………………………………………………4
Significance of study………………………………………………………………………………………………………….4
Justification of study…………………………………………………………………………………………………………4
Scope and Limitation of study……………………………………………………………………………………………5
CHATER 2: LITERATURE REVIEW
2.1 Introduction...................................................................................................................6
2.2 Role of private investment in economic development...............................................7
2.3 Structural organization of Kenya Private Sector Alliance................................................9
2.4 Role of government regulation in promoting private investment sector.......................10
2.5 Factors affecting growth and profitability of private investments.................................12
2.6 Theoretical and conceptual framework..........................................................................15
2.6.1 Theoretical framework.............................................................................................16
2.6.2 Conceptual framework.............................................................................................17
2.7 Overview of literature.....................................................................................................18
CHAPTER 3: RESEARCH DESIGN AND METHODOLOG
3.1 Introduction.....................................................................................................19
3.2 Research Design...............................................................................................19
3.3 Study Area.........................................................................................................20
3.4 The target population.......................................................................................20
3.5 Sample size and sampling procedure................................................................20
3.6 Data type and source.......................................................................................21
3.7 Sampling Technique.............................................................................................21
3.8 Research instrument............................................................................................21
3.9 Data collection.....................................................................................................22
3.10 Data analysis......................................................................................................22
3.11 Data presentation..............................................................................................22
3.12 Ethical issues......................................................................................................23
REFERENCES.........................................................................................................................24
ACRONYMS AND DEFINITION OF TERMS
GoK
-GOVERNMENT OF KENYA
K P S A -KENYA PUBLIC SECTOR ALLIANCE
KI
-KEY INFORMANTS
GNP
-GROSS DOMESTIC PRODUCT
I P A R -INSTITUTE OF POLICY ANALYSIS AND RESEARCH
E P Z -EXPORT PROCESSING ZONE
FDI
-FOREIGN DIRECT INVESTMENT
NSE
-NAIROBI STOCK EXCHANGE
CBK
-COMMERCIAL BANK OF KENYA
KCB
-KENYA COMMERCIAL BANK
NBK
-NATIONAL BANK OF KENYA
PFT
-POLICY FRAMEWORK OF INVESTMENT
P S D S -PRIVATE SECTOR DEVELOPMENT STRATEGY
ACKNOWLEDGEMENT
Glory and honor be to God almighty for His continued guidance, grace and giving me the
strength throughout the period of writing this proposal.
I wish to acknowledge and appreciate my supervisor DR, Jennifer Njaramah for the
patience, guidance and encouragement through the technicalities of writing this research
proposal.
I also acknowledge help from my friends, family and colleagues and anyone who
participated in any way to make this proposal successful. I also feel indebted to my friends,
Aggrey, Robert and Paul who greatly encouraged me and guided me whenever necessary.
May God bless you all.
ABSTRACT
Investment in Kenya is mainly in three categories, public investments, foreign investments
and private investments. Private investments carry a larger percentage of around ( ).
Private investments in Kenya contribute greatly and exponentially in economic growth and
development.
Private investment is mainly owned by, individuals, partnerships groups as well as
associations.
Migori County specifically has been experiencing gradual expansion in private investments
in different fields, main being in agricultural sector, educational sector, in transportation,
financial sector, fishing industry, wholesales, hotels and bars and many other small
enterprises.
Private investment in Migori County is one of the central to performance of all sectors of
the economy. The private investment in Kenya makes a great contribution towards
economic growth and development of the country through provision of job opportunities.
Therefore owners of these sectors require favorable working environment to work
effectively for more profitability and expansion.
This is why the efficiency of private investment sector in Kenya remains a major concern in
promoting harmony among various interested economic sectors.
The study will find out the factors inhibiting the growth and profitability of private
investment in Migori County.
The study will be descriptive and will use the survey design methodology. Primary data will
be collected using questionnaire and interview. Secondary data will be collected from
published and unpublished sources.
Simple random sampling will be used to draw sample of 50 respondents.
The data will be analyzed by gathering statistics from both qualitative and quantitative
data.
The data will be presented using tables and graphs.
The findings of the study should draw the nature of Migori county private investment
system. It will also highlights the difficulties the private investors in Migori county are
facing or are likely to face. The major challenges facing private investors in Migori county
making it less profitable and hindering its growth will also be analyzed.
The study aim at making recommendations based on the findings which should highlight
the measures that should be taken to improve the performance, efficiency, growth and
profitability of private investment in Migori County.
CHAPTER 1: INTRODUCTION
1.1 Background study
Migori County is located in south nyanza region along the boundary of Kenya and
Tanzania within nyanza province in Kenya. Migori county comprises of five
constituencies in seven districts; kuria west, kuria east, Migori, Rongo, uriri, awendo
and nyatike districts.
As a result Migori County has been attracting private investors due its strategic
allocation in various fields.
Migori county private investment has been experienced in many fields. Amongst them
being agriculture where the investors have invested in crop production in cash crops.
The main ones being Tobacco mainly grown in kuria west and kuria east districts,
sugarcane plantation mainly in awendo and some few parts of the county, maize
plantations that of late has greatly spread due to arising Nuru International Non
Governmental Organization(N I NGo) . Still in agriculture investors in Migori County has
also grown roots in animal investments, mainly seen in cattle keeping, bees in nyatike
district and poultry in Rongo district.
Migori County has also experienced private investments in transportation sector,
which comprises of pipeline, a classified road network.
The road industry is the most competitive and relatively efficiency in Migori County.
The main transport services provided by Nissan matatus, minibuses buses and cars.
The transport is essential for domestic economy and also an important source foreign
exchange, generating at least us dollar 95- 150 per year (World Bank 1995).
Apart from transport and agriculture investor in Migori County have shown an interest
in investing in financial sectors through investment in bonds and shares as well as
micro financial banking likes of Kenya Women Finance Trust.
Another area that has shown a great interest in private investor in Migori County is
wholesales sections the likes of shivling nakumatt, tusker and many others not leaving
behind hardware, hotels, bars and other small enterprises all over markets in Migori
County.
But with all these, investments taking place in Migori County, many challenges has
been hindering the growth and profitability of the sector hence it calls upon a direct
intervention on these issues.
Hence, the study if focused to address the issues on these factors hindering the growth
and profitability of private investment in Migori County.
The study will try to answer questions or predicaments in the minds of these willing
investors as well as new investors planning to invest in Migori County. It will look on
appropriate measures government of Kenya should put in place in order to improve on
the profitability of private investment sector specifically in Migori County
Also the study will focus on improvement and encouragement on private investment
as a source of job opportunities. Also the organization structure of private sector
alliance will be seen as how it can promote profitability and growth of private
investment in Kenya- a case study of Migori County.
Since private investment is the central to performance of all sectors of the economy
because it’s a service provider for all other sectors of the economy. The sector in Kenya
is multi- mode, making great contribution to economic growth and development of the
country through provision of job opportunities and contribution the sector makes in
gross national product (G N P).
Indeed, (Kenya vision 2030, 2007) identifies the private investment sector as one of the
key area that is targeted to contribute to Gross National Product and also as a source
of employment to the youths, hence acting as a strong pillar for economic growth,
development and overall macroeconomic stability.
And finally, it is against this background that the study will investigate the factors
inhibiting the growth and profitability of private investment in Migori County.
1.2 Statement of the problem
For as long as private investment exists, it has being experiencing exponential growth
in numbers of investors and the number of people being employed in the private
investment sector.
This growth has however been hampered by a number of constraints. Growth
profitability of the private investment sector in Migori County.
In spite of the various the various constraints that affects the growth and profitability
of private investment in Migori County, few studies have been done to document it.
The main purpose of the study is to investigate the factors inhibiting the growth and
profitability of private investment in Migori County.
The study aim at making recommendations based on the findings, which should
highlights the measures that should be taken to improve the performance, efficiency,
growth and profitability of the sector.
1.3 Research Questions
1. What is the organization structure of Kenya Private Sector Alliance (K P S A)?
2. What role do government regulations play in promoting private investment in
Migori County?
3. What problems hinder the growth of private investment in Migori County?
4. What changes would help in improving the performance of the private investment
sector?
1.4 Research objectives
The general objective of the study is investigating the factors inhibiting the growth and
profitability of private investment in Migori County.
1.4.1
Specific Objectives
a) To investigate the organizational structure of K P S A.
b) To assess the role of Kenya in promoting growth and profitability
private investment the county.
c) To investigate the problems affecting growth and profitability of
private investment in m
d) Migori County.
e) To make recommendation aimed at improving performance of
the private investment sector.
1.5 Significance of the study
Findings from this study will provide a sound basis for critical policy decisions by the
government, policy makers, all of which will be aimed at improving both the growth
and profitability of the private investment sector.
The study will also of importance to current investors and potential investors in private
investment sector.
The study findings will also be important to the new investor and the willing
entrepreneurs willing to invest in the sector.
Also, the study findings will add to the existing body of knowledge especially in private
investment sector.
1.6 Justification of the study
The study is justified by the fact that based on available literature, although other has
been done elsewhere regarding the private investment sector, there is limited
documentation of the factors inhibiting growth and profitability of private investment
in Migori County. Private investment sector is the important sub sector of Kenya
private sector alliance that affects the growth and development of the Kenyan
economy directly and indirectly.
It is therefore necessary to have full information about the factors that affects the
performance and growth of private investment sector.
1.7 Scope and limitation of the study
The study will cover the private investments within Migori County in different towns in
the county from different fields.
The study will cover five towns within Migori County, Rongo town, Awendo town,
Migori town, Sirare and Kehancha town.
The study will majorly dwell on, agricultural sector, transportation sector, financial
sector, educational sector, wholesaler and hotels.
The study is based in an urban setting and is designed as a social survey and will be
limited to the responses to the various questionnaire items.
CHAPTER 2: LITERATURE REVIEW
2.1 INTRODUCTION
The purpose of the literature review is to set the study in a broader context through
Investigation of relevant literature and other sources.
The review will cover; role of private investment in economic development, the
structural organization of Kenya private sector alliance, the role of government
regulation in promoting efficiency and performance in private investment and the
problems affecting growth and profitability of private investment.
The theories and arguments in the literature will be identified and expanded.
2.2 ROLE OF PRIVATE INVESTMENT IN ECONOMIC DEVELOPMENT
Despite the growing support of market oriented strategies, and for a greater role of
private investment, empirical growth models for developing countries typically makes
no distinction between to private and public component of investment (Reinhart,
Carmen, 26 July 1989).
The government, generally perceives as investment friendly, has enacted several
regulatory reforms to simplify both foreign and local investments, with the most
important of these being the creation of Export Processing Zone(EPZ)
The export processing zone is expected to grow rapidly through input of Foreign Direct
Investment (FDI) over the next decade (Healy Consultants).
Agriculture is one of Kenya’s three most economic sectors. In 1980, agriculture
accounts for 30% of Kenya overall GDP. In 1990, the value of agriculture added to GDP
was 30% in 2000, it increased to 32%, and in 2011 the value of agriculture added the
overall GDP fell to 23%.
Agriculture as one of the private investment in Kenya continuous to dominate Kenya
economy, although only 15% of Kenya’s total land area has sufficient fertility and
rainfall to be formed and only 7% or 8% can be classified as first class land.
In 2006, almost 75% of working Kenyans made their livings on land, compared with
80% in 1980.
Industry and manufacturing as another area of private investment in Kenyan economy,
where the experienced private investors in Kenya account for only 14% of GDP. This
level of manufacturing represents only a slight increase since independence.
Expansion of the sector after independence, initial rapid has stagnated since the 1980s.
However, due to urbanization, the industry and manufacturing sector have become
increasingly important to the Kenyan economy, and has been reflected by an
increasing GDP per capita.
Kenya is east and central Africa’s hub for financial services. The Nairobi Stock Exchange
(NSE) is ranked 4th in Africa in terms of market capitalization.
The Kenya Banking system is supervised by the Central Bank of Kenya (CBK).
As of late July 2004, the system consisted of 43 commercial banks (down from 48 in
2001), several non bank financial institutions, including mortgage companies, four
saving and loan association and several score foreign exchange bureaus. Two of the
largest banks, the Kenya Commercial Bank (KCB) and the National Bank of Kenya(NBK),
are partially government owned and others are foreign and family owned.
Private investment in Kenya has risen from 1989 to 2009(World Bank).
In 2009 the World Bank estimated 2.7 million men and women in the nonfarm self
employment category. The men up to 1.4 million and 1.3 of women.
As a result it calls upon further studies to be done on the role of private investment in
our economy particularly in Migori County.
2.3 THE STRUCTURAL ORGANIZATION OF KENYA PRIVATE SECTOR
Schein (1987) defines an organization as a rational coordination of activities of number
of people for the achievement of some explicit goal or purpose through division of
labor and functions and through hierarchy of authority and responsibility.
Cole (2000), defines structural organization as the sum total of the ways in which it
divides its labor into distinct tasks and then achieves coordination between them. He
cites that organization is a social structure that is composed of people working towards
a common goal.
An association on the other hand is a number of people who comes together to meet
their common interest. In developing countries, associations are the main ways of
working with and supporting one another in target groups.
Private investment is essential for economic growth and development and poverty
eradication. It increases the productivity capacity of an economy, drives job
opportunities, brings innovation and new technologies and boosts income growth. But
amount of private investment, particularly in Kenya and other developing economies,
fall short of development needs. And the benefits of investment in emerging and
transition economies are unevenly shared among sectors and region.
The policy framework for investment (PFT) was developed to help government
overcome this private investment deficit. Founded in the 2002 united nation monetary
consensus on financial for development which ascribes to government the
responsibility for creating the coordination for private investment flourish, the PFT aim
to support development and the fight against poverty and promote responsible
participation of all government in the global economy.
When the NARC government comes to power in 2003, there was a great energy and
optimism about Kenya’s potential. In 2003 the government of Kenya developed
economic recovery strategy for wealth and employment creation as a basis for
channeling this energy and optimism into productive activity.
The ERS provided the broad platform for the social and economic development of
Kenya between 2003 and 2007.
Since 2003, progress has been made in implementing the strategy. However. Some
challenges remain in to be overcome if Kenya to achieve the sustainable high level of
growth envisioned by the ERS. A critical component of this effort will be to remove
existing constraints to private sectors growth and development. As part of this effort,
the government of Kenya, under leadership of the ministry of trade and industry began
extensive consultations with a wide range of stakeholder in order to develop the
Private Sector Development Strategy (PSDS).
2.4 PROBLEMS FACING PRIVATE INVESTMENT IN KENYA
Historically, Kenya has welcomed foreign investments, but the government has talks
overall, entrepreneurs express resentment at being unable to break out of the
traditional agricultural sector and into the small businesses rank much of the hostility
to foreign control counter more on Asian entrepreneurs than on western
multinational. Asian much of the domestic manufacturing, redistribution and retail
industry.
In the late 1960s, a campaign to kenyanise the economy achieved few of its desired
results. Businesses owners of both Asian and European descent benefited from
governmental schemes since they could claim Kenyan citizen.
Today, tactics have changed. The call now is for indigenization of the economy.
Indigenization is aimed at maturing Kenyan entrepreneurs instead of foreign who holds
Kenyan passport.
Direct Foreign Investment (DFI) in the economy is dominated by British companies with
US firms in second place. Among the British multinational in the country is Lonrho East
Africa which has interest in tourism industry, printing, transportation, office equipment
and agriculture.
A number of US companies have sold their Kenyan subsidies to local interests.
Firestone East Africa ltd, union carbide ltd and Fox Theater ltd were all sold to national
Kenyans.
But these sales are more consequences of economic condition in the united state than
deteriorating investment climate in Kenya.
According to US embassy in Nairobi, American firms currently own currently 73
subsidiaries in Kenya.
Overall, private investment has decline in Kenya recently at it has in most of Africa. This
trend has alarmed the Kenyan government to try to counter the trend. The
government established an investment promotion counter to act as an intermediary
between the key economic ministries of the government and private investors. The
Investment promotion counters goal is to develop a business climate more conducive
to investment by both foreign and local investors. This problem is clear: lack of
adequate incentive for investors, a limited domestic and government red tape. The
centre has tried to streamline bureaucratic procedures. In the best potential investors
had to get their approval of several government offices be a proposal could finalized. It
was sometimes a 6 months process. The IPC has tried to whittle that down to a
maximum of two months.
According to annual report, challenges facing private sectors by Altius Associates
(Altius), The USA buyout market faces a challenging environment of rising purchase
price multiple for high quality companies.
2.5 FACTORS AFFECTING GROWTH AND PROFITABILITY OF PRIVATE INVESTMENT
The establishment of Development finance institution, such as CDC was to provide
finance for private investment in developing countries. High levels of private
investment are associated with faster rates of economic growth and in turn, growth is
critical factor in reducing poverty.
The literature review addresses two sets of questions: what are hindrances in private
investment in Kenya as a country; the cases of lack access to finance by private
investors in Kenya, and particularly in Migori County.
A good investment climate provides opportunities and incentive for firms to invest
profitably, create jobs and expand output, thereby increasing private investment and
growth.
The literature review has shown that the better the investment climate the high the
private investment are likely to be.
However, in Kenya and in Migori County in particularly, businesses frequently operates
in investment climate that undermine investment incentives to invest and grow.
Businesses seek to maximize the risk adjusted rate of return to investment after tax.
Investment climate constraints serve to depress the potential rate of return on
investment, increase risks and prevent the entrepreneur from capturing the return an
offer. The literature highlights some investment climate constraints that affect the rate
of private investment and the survival and growth as:
1. Macro instability i.e. economic, social and political that deter investment by
making future rewards more uncertain or undermining the values of assets.
Studies has shown that the greater the level of instability, the lower the rate of
private investment and growth. Instability also increases the risks of firms going
bankrupt, suffering slow growth or contracting if potential conflict issues. Fiscal
and monetary policies that reduce inflation, policies that help to establish a
competitive exchange rate, and political and social stability are needed to sustain
high rate of investment and growth.
2. Business regulation and licensing , whereas firms need to be regulated an licensed,
if the cost they incur in complying with regulation are unnecessary high, business
entry and firm growth will be lower.
The literature points to faster growth countries improve their rank in the World
Bank’s doing business index, especially if they move from being one of the worst
perfumers to being amongst the best.
The literature also has shown that poor licensing and regulation leads to low entry
rate of new investors and lower productivity and growth of established investors.
However, by itself, better businesses regulation may not result in faster economic
growth.
3. There is strong cross country evidence in the literature that weak institutions
particularly for the protection of property right, an effective that is unable to
enforce contracts, reduces investments and growth. This is supported by firms’
level evidence which shows that secure property right and better contract
enforcement enable firms to grow. They increase their incentive to invest longer
term, feed secure in trying on new supplier and enter into more complex contracts.
4. Excessively high rate of tax exact a high cost in terms of lower private investment
and growth. They reduce the incentive to invest because the after tax returns to
invest are lower. In addition of companies with the administration of tax can
decrease business entry and the growth of established firms.
As well as reducing tax rate, policies that the tax base, simplifying the tax structure,
improve administration and give greater autonomy tax agencies help to reduce
these constraints
And finally financial constraints and infrastructure. Firms need to be able to access
to external finance to invest more. The higher the cost of capital the low the
expected rate of return to the entrepreneur.
The literature has shown that financial has deeply measured by the ratio private
credit to GDP, results in high rate of growth and faster growth in the income of the
poor, especially in the poor countries with less developed financial sectors.
Studies have shown that investors able to access the external finance are more
likely to survive, invest and grow than those denied access.
Access to infrastructure allow firms to become more productive, reduce
transaction (ICT) and transportation cost.
There is ample evidence to show that investment in infrastructure leads to fast
growth.
Studies also points to high level of investment, greater productivity and faster
growth of firms that have better access to infrastructure.
Great private investment in infrastructure, public and private and high expenditure
maintenance are needed to reduce this constraint.
Generally a good investment climate provide opportunity and incentive for firms to
invest productively, create jobs and expand, therefore promoting economic growth
and poverty reduction.(World Bank (2005).
2.6 THEORETICAL AND CONCEPTUAL FRAMEWORK
2.6.1 THEORETICAL FRAMEWORK
Theoretically, the private investment sector exhibit competitive market.
The market has many producers of both goods and services that they sell them to
different consumers.
The study will test the hypothesis that:
1. Profitability and growth of private investment is enhanced when there is good
organization of Kenya private sector alliance.
2. There is positive relationship between the roles played by the private investment
and growth and development of the Kenyan economy.
3. Government regulation influences positively the growth and profitability of the
private investment sector in Kenya.
2.6.1 CONCEPTUAL FRAMEWORK
The major aim of research should be either relate data to a theory or generate a theory
from data. Thus, in order to hold existing and new knowledge, theory should provide a
conceptual framework so that knowledge can be interpreted for empirical application.
The conceptualization is based on the following variables;
a) Organizational structure of private investment
b) Problem affecting growth and profitability of private investment businesses
c) Role of government regulation in promoting efficiency and profitability of private
investment sector.
These variables form the study’s independent variables. The dependent variables
are profitability and growth of private investment.
FIGURE 1.1 THE CONCEPTUAL FRAMEWORK
2.7 OVERVIEW OF LITERETURE
Despite the important role played by the private investment sector our economy, the
objective of making the private sector profitable well regulated, attractive to invest in
and efficient in service delivery has not yet been met.
There is therefore a gap posed on the need to study the factors that hinder growth and
profitability of the private investment in Migori County.
CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY
3.1 INTRODUCTION
This chapter gives the various method used to carry out the study and gather the
necessary data.
It gives the study Area, the Target population, the sample size, Research design,
sampling procedure and also discusses the data collection and analysis procedure.
3.2 RESEARCH DESIGN
The research design will be descriptive. The major purpose of this research design is to
give an explanation of the state of affairs as it exists at present.
The researcher will apply this design in investigating the current situation pertaining
the factors inhabiting the growth and profitability of the private investment in Migori
County.
3.3 STUDY AREA
The study area of this research will be private investment in Migori County. This area
comprises of five constituencies. The area is at the boarder of Kenya and Tanzania. The
area of study of Migori county will only cover five major towns; Rongo, Awendo,
Migori, Sirare, and Kehancha.
The area experiences various types of private investment but the study will majorly
dwell on; agriculture, financial, transport, education, wholesales and hotels as the main
area of study.
3.4 THE TARGET POPULATION
The target population of this study includes all private investors; including employers
and employees who have operated in Migori County at least for the past six months.
The study will also consider the young entrepreneurs in Migori County and focuses on
the challenges they are facing.
3.5 SAMPLE SIZE AND SAMPLING PROCEDURE
The sample for this study will be drawn through a mixture of methods.
This will target 50 informants as follows:
Informants
Numbers
percentage
Agricultural investors
15
30
Transportation investors
10
20
Investors on Education
5
10
Investors on financial
sector
Investors on hotels
8
16
6
12
6
12
50
100
Investors on wholesales
and other small
enterprises
TOTAL
The private investigate target population must have served on the market for at least
six months.
The sample size will be considered appropriate based on the ground that social
researchers agree that on the extreme 30 cases are generally regarded as minimally
adequate for statistical data analysis (Singleton, 1993).
To come up with the sample size proposed above, multistage sampling methods will be
used.
To come up with the sample from the sample frame, the names investors and their
employees who have served the markets for more than six months will be extracted
and then using random sampling, 15 investors on agriculture, 10 investors on
transportation, 5 investors on education, 8 investors on financial sector, 6 investors on
hotels and 6 investors on wholesales and small businesses.
The list of investors with more than 12 months in the market will be extracted and this
will be treated as Key Informants (KI) and information will be gathered from them
through interviews and questionnaires.
3.6 DATA TYPE AND SOURCE
Both primary and secondary data will be collected and used. Primary data will be
collected by administering questionnaires to private investment operators and their
workers.
The questionnaires will be useful in collecting data that the researcher can’t observe
and will also allow respondents the freedom in answering questions and a chance to
provide in-depth responses. For those who will indicate inability to comprehend the
questionnaire, the researcher will use the questionnaire to conduct a face interview.
In addition, the researcher will also use secondary data from published sources to
supplement the primary data.
3.7 SAMPLING TECHNIQUES
Probability random sampling strategy will be made use to ensure the selection of an
appropriate sample of the study.
The investment function will also be used:
I=F(r, Y G)
Where;
r is the interest rate.
Y is the real income
G is government.
3.8 RESEARCH INSTRUMENTS
Primary data will be collected by use of questionnaires. Questionnaires will be
administered during off peak hours when the respondents are less busy and a polite
deadline will be agreed between the researcher respondents. After the stipulated
period, filled questionnaires will be collected for analysis.
Secondary data will be collected from published and unpublished sources to help the
researcher in coming up with the recommendations.
The attached is the questionnaire sample that will be used during data collection.
A PROPOSED QUESTIONNARE TO BE USED DURING DATA COLLECTION
MIGORI COUNTY PRIVATE INVESTORS QUESTIONNAIRES
DISTRICT..............................................................................................................................
NAME OF AN INVESTOR......................................................................................................
TYPE OF BUSINESS..............................................................................................................
PERIOD OF TIME OF HIS/HER BUSINESS IN MIGORI COUNTY.............................................
CHALLENGES FACING HIS/HER BUSINESSES
1..........................................................................................................................................
2.........................................................................................................................................
3..........................................................................................................................................
4..........................................................................................................................................
5..........................................................................................................................................
INVETORS RECOMMENDATION ON THESE CHALLENGES
...........................................................................................................................................
............................................................................................................................................
............................................................................................................................................
3.9 DATA COLLECTION
Data will be collected by administering questionnaires to Migori count private
investors and their workers as well.
The questionnaires will be useful in collecting data that the respondent can’t observe
and will also all respondents the freedom in answering questions and a chance to
provide in-depth responses.
For those who will indicate inability to comprehend the questionnaires, the researcher
will use the questionnaire to conduct a face to face interview.
In addition, the researcher will also use secondary data from published sources to
supplement the primary data.
3.10 DATA ANALYSIS
Descriptive statistics will be used to analyze the data to meet the study’s objectives.
Both qualitative and quantitative data will be analyzed and adopted so that it can be
possible to extract meanings from the study results.
Quantitative analysis will involve use of graphs and percentages to determine the
factors hindering growth and profitability of private investment in Migori County.
3.11 DATA PRESENTATION
The data will be presented in form of tables and graphs to show the factors inhibiting
growth and profitability of private investment in Migori County.
Calculations of percentages of respondents per each effect will also be shown.
The findings of the study will be able to show to what extend the identified factors
affects the growth and profitability of private investment in Migori County.
It will also show the organization structure of the Kenya private sector alliance in Kenya
and how the regulatory framework has affected profitability and performance of
private investment in Migori County.
3.12 ETHICAL ISSUES
The study will be conducted with the permission of relevant authorities who will
facilitate in the researcher in getting the necessary data to achieve the research
objectives.
Answering of questionnaire items will also be done by willingness of the respondents
and no one will be forced to answer what they don’t want to do or answer.
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