DETERMINANTS OF FINANCIAL INDEPENDENCE IN KENYA

Abstract

The main objective of this study was to examine the determinants of financial independence in Kenya. Two theories were looked into, the Dependency Theory and the Classical Dependency Theory. The research was based on fourteen departments in the Kenyan government as in appendix 3. The three variables examined in this study include corruption, financial planning and balance of payment. The researcher measured to what extent each of the three variables affected financial dependency of a country. Secondary data from Transparency International, IMF reports, World Bank reports, Government reports by the auditor general, Vision 2030 reports, Kenya Economic Reports and other reports and journals were used. Regression analysis was performed on the data to come up with a mathematical function to express dependence in relation to the variables. This data was analyzed using Statistical Package for Social Scientists.. This data was presented in form of charts and graphs. This research established that there is a relationship between financial independence and financial planning as well as balance of payment. There was a positive correlation between financial planning and financial independence and also balance of payment and financial independence. The researcher recommended that the government adopts better financial planning strategies such as reduction of recurrent expenditure and tightening the noose on revenue collection methods used as well as to improve on the amount of exports by expanding the range of products produced by the by the country for export.