This research would never have materialized without access to a vast accumulation

of research and writings published by other insightful scholars. I hereby acknowledge my

indebtedness to them all. I wish to record my profound gratitude to my supervisor Yang

Liu for her much needed guidance, support and encouragement towards the completion

of this work. I'm extremely grateful.

I would like to thank Secretary Gao,all the professors, assistant professors and all

my and classmates with whom I have been privileged to interact in the MBA class. They

have all played a great role in enhancing my knowledge throughout Ihe two years of my

course. I also extend my appreciation to China Scholarship Council for providing

financial support. Special thanks to Mr. Ogunyinka, Emmanuel Kayode, and Miss Paula

Nansambu for their ideas and keen eye in helping to edit this research paper.

Above all I would like to Thank God Almighty for sustaining me alive and well in a

foreign country and Wuhan International Christian Fellowship for being a home away

from home and last but not least my frieaids and biological family in China and back

home for tiieir prayers, emotional and financial support.

ABSTRACT

This research work was set out to find and analyze the relationship between Foreign

Direct Investment (FDI) and growth in Uganda's energy sector as a vital part of

economic development considering the ever present correlation between activities in

various industries within an economy.

To study the relationship between FDI and energy development, time series data for

the years 1970-2011 was retrieved from secondary sources namely United Nations

Statistics Division, International Monetary Fund (IMF) and World Bank.

Gross Domestic Product (GDP) was the measure for economic growth used.

Reference was made to other variables such as changes in Standard of Living, Inflation,

Exchange rates and others in an attempt to further explain the effect of FDI.

The first definition of GDP in this paper is the total income of all sectors or

industries in the economy. (Mankiw, 2009)

Industries in Uganda are categorized into;

1.Agriculture, hunting, fishing and forestry

2.Mining, extraction and utilities

3_ Manufacturing

4.Construction

5.Wholesale, retail trade, restaurants and hotels

6.Transport, storage and communication

7.Other activities

The energy sector lies under mining,extraction and utilities. Water, production of

electricity by hydro generated power, solar and bio fuels as well as extraction of natural

resources through mining and drilling are all within this section. Growth or decline in the

energy industry was estimated from the percentage of mining extraction and utilities

contribution to GDP.

Stock in the energy industry includes pipelines for crude oil transportation,

refineries and dams for generation of hydroelectric power among others. Increase in

stock led to increase in energy output (production and consumption) which were duly

represented in the GDP equation. Where GDP is equal to the sum of Consumption

spending, Investment spending, Government expenditure and Net exports (exports less

imports). GDP=C+I+G+(X-M)

Foreign Direct Investment is 10% or more interest in foreign assets; that is assets in

a foreign country or equity stake of in a foreign-based enterprise. It is a portion of private