Development Economics

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Browsing Development Economics by Author "Berhanu Denu (PhD)"

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    Determinant of Export Performance: Case of Agro Processing Industries in Ethiopia Using Time Series Analysis
    (Addis Ababa University, 2023-02) Getachew Andualem; Berhanu Denu (PhD)
    Globalization forces countries to take their comparative advantage in the global market. Export plays a vital role in economic development of a nation as well as for the development of the particular exporting companies. Although, the benefits derived from export of agro processing products in an increasingly globalized marketplace are enormous, but for many industries, exporting agro processing is constrained by numerous challenges. The purpose of the study was to investigate the major determinants of the export performance of the four selected commodities of Ethiopia namely: leather & leather products, meat and meat products and fruits & vegetables and beverage products. The paper empirically examined the export performance and its major determinant factors in the Ethiopian context using time series data for the period 1991 - 2021 using a secondary data. To analyze the relationship between the export commodities and their determinants, gross domestic products (GDP), foreign direct investment(FDI),real effective exchange rate (REER) and trade openness (TOP) ,inflation and infrastructure (road) were used, VAR model that was applied and estimating by ordinary least square (OLS) regression analysis with Time series data data. The result from econometric analysis revealed that the infrastructure (paved road in kilometer) is the only variable significantly and positively affects the export of the selected commodities. Similarly, GDP positively and significantly affects the export performance of leather & leather products and fruit & vegetable products .Foreign direct investment (FDI) has positive and significant effect on the export of meat, fruit & vegetable and beverage products. While trade openness (TOP) has negative coefficient and significant effect on the export of leather & leather products, meat and beverage products, but it has positive and statistical significant with on the export of fruit& vegetable products. Since all the export commodities were positively impacted by infrastructure (road), increasing quality and coverage of road development would bring a vital outcome for increasing the export performance of the agro processing commodities, which can be regarded as the key finding for the research. From the result, the study concluded that the export performance of the agro processing industries in Ethiopia have been affected by the independent macroeconomic variables. In general, due its potential the export of the agro processing product is increasing time to time. This is due to the fact that the government has prioritized the sector and as a result the agro processing sector is growing. But still there are various external and internal microeconomic and macroeconomic factors that are adversely affecting the export performance of the sector.
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    Determinants of Unemployment in Ethiopia
    (Addis Ababa University, 2023-06) Zeru Nikedimos; Berhanu Denu (PhD)
    The unemployment rate has been the most persistent issue in both developed and developing nations. Thus, all the relevant ideas, key factors, and concepts had been discussed at first including the macroeconomic factors that affect the unemployment rate in Ethiopia. This study is an attempt to investigate the determinants of unemployment in Ethiopia. The yearly data was used from the period 1990 to 2021. Unit root test is used to check the stationarity of the variables and employed Autoregressive Distributed Lag Model (ARDL) regression method. In Addition, Nonlinear ARDL model has been employed to detect the symmetric impact of different variables on unemployment rate in Ethiopia. When we come to the long run ARDL result all four variables namely (economic growth, real effective exchange rate, inflation and foreign direct investment) were a significant determinant of unemployment rate in Ethiopia. , in the long run, the lag of the natural logarithm of total unemployment has a positive and significant effect on the current unemployment level. The effect of economic growth on the level of unemployment in the long run, economic growth expressed as (natural logarithm of RGDP) has a negative and significant effect on the unemployment rate. Slow economic development dynamics will raise the long-term unemployment rate (non-employment growth). All variables except foreign direct investment affect unemployment rate negatively they decrease Unemployment, while foreign direct investment affect unemployment rate positively. Finally, the researcher recommended that the Ethiopian government should to consider in its policies and strategies to create more jobs and to efficiently utilize the abundant labor force available in the country. Moreover, the government authorities should efficiently utilize the capital resource generated locally or donations and grants from abroad (like the revolving fund) in job creation
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    Effect of Access to Health Services on Poverty in Ethiopia
    (Addis Ababa University, 2022-06) Iranfechisa Lechisa; Berhanu Denu (PhD)
    The importance of good health cannot be under estimated. However, presence of high poverty rate can lead to lack of health care service and vice versa, thus ,poverty reduction and improvement of health care access are important in ensuring enjoyment of good health . Despite Ethiopian commitment to reduce poverty and improve health status of her citizen, poverty remained high over 22 million people are living below national poverty line. Ethiopian health indicators have also not been impressive. Infant mortality rate for instance 29.5 death per 1,000 live birth, maternal mortality rate remained high at 401 death per 100,000 live birth. This poor performance in the health indicates that the country need to address the health challenge otherwise it will miss on the developmental goal by 2030 .this study , therefor , was too investigate the relationship between access to health care and poverty in Ethiopian . The study employed non-experimental pooled cross-sectional research design. The study used Ethiopian demographic and health survey (EDHS) data collected 2005, 2011 and 2016. To achieve the main objective , the study used simultaneous regression model, the specific objective was addressed usingdescriptive analysis method .study finding showed that there was relationship between access to health care service and poverty ,increase in the access to health care service , which implies reduction in poverty , due to increased wealth , individual are able to afford health care and hence they easily access health service more and motivate individual to seek health care service from provider who give quality service lead to improved health status and make productive. Thus although Ethiopia missed some health related development Goal , if access to health service is addressed, the country can do better in its efforts to achieving the sustainable development goal and the country’s development plan ,Ethiopian vision 2030 . KEYWORDS; Access to Health Service, Poverty, Simultaneous Equation Model
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    Factors Affecting Smallholder Farmers’ Access to Agricultural Extension Services: The Case of Sodo Zuria Woreda, Wolayta Zone, Southern Ethiopia
    (Addis Ababa University, 2022-06) TesfayeTadesse; Berhanu Denu (PhD)
    The study examined the factors affecting smallholder farmers’ access to extension services, in the case of soddo zuriaworeda, wolaita zone in the southern part of Ethiopia. A multi-stage sampling technique was employed and 100 sample households were selected by using a formula for sample size determination.Both quantitative and qualitative data types were collected fromprimary and secondary sources. The data surveywerecollected usinghouseholds survey, key informant interview, focus group discussion,structured questionnaire, and checklists. The analysis was employed usingboth descriptive statistics and binary logit model.The resuls were presented in the form of tables and graphs through frequencies, percent, mean and standard deviation as well as statistical tests such as chi-square,. The result showed that out of 100 sample farm household heads, 28 do not access agricultural extension services due to weak links between farm households and agricultural extension agents, lack of effective coordination and communication between those farmers and concerned institutions i.e., agricultural extension, credit institution and other local administration.On the other hand, lack of agricultural input; (oxen holed, fertilizer and improved seed, ..), the limited size of farmland, illiteracy, lack of knowledge to use information technology,and distance to extension center are the major reasons (challenges) that made sample households’ unable to access agricultural extension package. The regression model result revealed that the size of farmland, dependency ratio, the annual nonfarm income of the household, access to credit, number of oxen, livestock owned, experience to use fertilizer, soil characteristics, price of farm input and household willingness to access extension service were found to significantly determine the smallholder farmers access to extension service at different significance levels with the expected sign. The result also revealed that the size of farm and grazing land, number of oxen, soil fertility, and experience in using fertilizer found a strong and positive effect on access to extension services. Thus, based on the above results it is possible to conclude that small farm households’ access to agricultural extension services is not effective to result in an efficient agricultural productivity in the study area. Therefore, policy measures that could avert the above challenges are recommended to include measures like empowering and strengthening smallholder farmers’ training, awareness,prizes for the successful ones, and field visitwith practical training (demonstration), delivering and facilitating basic agricultural inputs through agricultural extension services. Keywords:small hold farmers’ agricultural extension service, binary logistic model.
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    Factors Affecting Students’ Academic Achievements in Public Primary Schools: The Case of Yeka Sub-City, Addis Ababa, Ethiopia
    (Addis Ababa University, 2024-10) Lemmi Hundesa; Berhanu Denu (PhD)
    This study was undertaken to estimate factors affecting students’ academic achievements in public primary schools in Yeka sub-city using data from a cross-sectional survey of 397 randomly selected respondents (students, teachers, principals and parents). The survey was conducted using a direct face-to-face interview as well as questionnaires to get necessary information from the respondents. This study was motivated based on the results of National Learning Assessment that has been conducted in Ethiopia since 2000 every four years in primary schools, and measures the students’ academic achievements showed that the students’ academic achievements were below the minimum expected score of 50 percent target(EAES, 2023) and it invites researchers for further investigation why it was so. The ordered logit model was used to investigate factors affecting students’ academic achievements. The results of the model revealed that each significant variable among the total of 11 explanatory variables was interpreted based on its corresponding coefficient. These significant variables are: study hour at 5%, school distance at 1%, number of students in the given class at 5% and doing homework at 1% significance levels, respectively. Thus, study hour that students spend studying per day helps students’ achieve higher semester’s average score, as far as school distance increases the semester’s average of students decreases, the higher the number of students in the given class the result of students lowers and the burden of homework on the same day also hinders the students not to score higher results. And also this study puts its recommendations for the stakeholders like supervisors, principals and ministry of education to solve or even try to minimize the problem of large class sizes (large number of students in the given class) to make learning environment conducive. And also as far as doing homework is mandatory to students since it helps them practice activities, it will also be burden if all subjects will be given on the same day to students. so, it is recommended that teachers have to prepare home work schedule and give it for students. Similarly, the researcher forwards recommendations for the unexplained variables that require diagnosis in further investigation to fit the model summary. Key words: Academic Achievements, Factors, Students
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    Factors Influencing Project Implementation Delay: The Case of Projects Financed by Development Bank of Ethiopia
    (Addis Ababa University, 2023-06) Dereje Feyissa; Berhanu Denu (PhD)
    Projects are essential for implementing strategies, involving the execution of well-planned activities within a set schedule. However, project implementation delays have global ramifications, affecting both involved parties and national economies through time and cost overruns. This study aims to assess project implementation delays and evaluate factors influencing implementation delays in projects financed by the Development Bank of Ethiopia, hindering its goal of national development facilitation. It provides valuable insights for enhancing project planning and management practices. The research employed an explanatory research design, collecting qualitative and quantitative data through structured questionnaires and interviews. The target population consisted of projects financed by the bank's head office, with respondents’ selected using purposive sampling and stratification. Data analysis employed econometrics/inferential analysis. The analysis revealed statistically significant factors influencing project implementation delays, such as project planning, loan approval processes, follow-up and supervision, promoter competency, contractor experience, and clarity in drawings and material costs. To address these delays, it is recommended to prioritize thorough feasibility studies, risk assessments, and timely fund approval in project planning. Regular site visits, progress assessments, and proactive problem-solving are crucial for effective monitoring and timely identification of delays. Additionally, investing in professional development and training for promoters, contractors, and project managers will improve their skills, leading to more efficient implementation and reduced delays. Implementing these recommendations will support the Development Bank of Ethiopia's national development facilitation goal while ensuring successful project execution.
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    Monetary Policy Transnission Mechanism in Ethiopia: Structural Var Analysis
    (Addis Ababa University, 2022-07) Berhanu Berihun; Berhanu Denu (PhD)
    Monetary Policy is increasingly important to maintain price and exchange rate stability and support sustainable economic growth. The main objective of this paper was to study and identify the main transmission mechanism of monetary policy in Ethiopia. To achieve the objective, secondary source of data was collected using quarterly time series data from 2000/01Q1 to 2020/21Q4. Small open economy structural Vector Auto Regression (SVAR) model with two vectors of variables. All the variables are tested for unit roots using Augmented Dickey Fuller and the Phillips–Perron test and model stability and other necessary tests was conducted. The results of Structural impulse response and structural variance decompositions derived from Structural VAR show that direct monetary transmission which is the Reserve Money in case of output and reserve money, domestic credit and nominal effective exchange rate have significant impacts on price level in short term. The monetary aggregate (M2), the average lending rate, the reserve requirement and nominal effective exchange rate have significant impacts on output and price level in medium term in Ethiopia indicating that monetary policy transmission channel is effective in influencing macroeconomic variables in the Ethiopian economy. However, the results of interest rate channel-which is represented by the average lending rate in affecting output and price is not effective in short run relative to other channels. while the study also illustrates that the monetary aggregate contains important additional information in the transmission process of monetary policy shocks in Ethiopia. Key Words: Impulse, Monetary, Policy, Response, Decompositions, Ethiopia
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    The Causes of Rural-Urban Migration in Addis Ababa: Thecase of Kolfe Kerianiyo Sub-City, Ethiopia
    (Addis Ababa University, 2022-06) Gidamu Hundecha; Berhanu Denu (PhD)
    Ethiopia is a developing country with a relatively fast-growing population and emerging economy, and the second most populated country in Africa. The main objective of this study is to analyze the causes of rural-urban migration in Addis Ababa; the case of Kolfe Keraniyo sub-city; the study also assesses the socio-demographic and economic characteristics of immigrants and examines the problem of lack of land ownership as a contributing factor for rural to urban migration. Multi-stage cluster sampling procedures used and migrants were purposively selected to cover a total of 217 migrants in the study area.. Data were analyzed using both descriptive and inferential statistical analysis models. The majority of migrants are male in which comprise 60.8% compared to total migrants. Similarly, the highest percentages (89.4%) of migrants are concentrated among youths and reproductive age groups. The greater number of migrants (about 89.8%) are single (unmarried). On the other hand, about 72.8% of migrants are originally from rural areas. Most of migrants (about 83.9%) attained formal education. The decision to migration (about 51.3%) was made by the migrants themselves. Economic reasons such as job seeking covers 38.2%, job transfer (10.1%) and migration for the purpose of advancements of education comprise 21.2%. The econometrics analysis of probit regression model shows, among variables, gender; age of migrants; educational status and job waiting are statistically significant to affect rural-urban migration in the study areas. Subsequently, the study proposes governments should focus on; job creation, provision of various social services, and formulate strong chain between rural cooperatives and organization and urban market systems. Key Words: Rural-urban migration, Kolfe Keraniyo sub-city, immigrants, probit regression model
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    The Impact of Exchange Rate Fluctuation on International Trade: In Ethiopia
    (Addis Ababa University, 2022-06) Abraham Siltan; Berhanu Denu (PhD)
    This study investigates the impact of exchange rate fluctuation on international trade in Ethiopia. The research is carried out under the assumption that exchange rate fluctuations are deemed to impact the volume of export and import trading activities. The study made use of secondary data from 1980 to 2021; on the following variables real effective exchange rate (REER), exports (Exp), imports (Imp), real Gross Domestic Product (RGDP), and inflation rate. The data were analyzed using descriptive and econometric methods in this study. Descriptive statistical methods such as mean, standard deviation, and graphical comparisons were used for measuring trends of the real effective exchange rate to compare with export and import sectors. Econometric methods in line with the theoretical and Empirical framework discussed in the literature review section, the following technique are applied, Johansen co-integration technique, vector error correction model (VECM), Granger causality, and variance decomposition to capture both short-run and long-run impact of the exchange rate. The VECM was used to capture both short- and long-run interactions. The results revealed a significant and positive association between the real effective exchange rate, real gross domestic product, and export, but have a negative relationship between inflation and export. At the same time, there is a significant and positive relationship between inflation, real GDP, and imports. However, the real effective exchange rate and imports have a negative relationship. This paper finds evidence that exchange rate fluctuation is the main factor that affects the level of international trade as measured by export and import flows in Ethiopia. It appears that if policymakers wish to promote export and decrease imports to improve the balance of trade in Ethiopia, they have to keep an open eye on steady appreciation of the exchange rate and reduce volatility. Key words: Exchange Rate Volatility, International Trade, Export, and Import
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    The Impact of Population Growth on Ethiopian Economic Growth
    (Addis Ababa University, 2022-07) Asamerew Dejenie; Berhanu Denu (PhD)
    This study empirically investigates the impact of population growth on the economic performance of Ethiopia for the period 1991-2021. Demographic transition enables in creating policy environment that considers maximum advantage of the nation’s demographic potential. VECM model was used to investigate the relationship between the population growth and economic performance of the country. The result of the model shows that the impact of population is negative and significant and the problem associated with huge population growth is the flood of the newly workforce, its management and providing different facilities even basic needs become a challenge for the government and policy makers. To tackle this issue, this study incorporated unemployment rate and agricultural growth rate to the model so as to investigate the impact of population growth directly and indirectly on economic growth in Ethiopia. The result of the study shows that population growth has negatively and significantly contributed to economic development contrary to agriculture. Saving rate, trade openness and human capital are also positive and significant factors to economic growth in Ethiopia. Hence, the government is advised to effectively and efficiently utilize the abundant labor force and work hard to eradicate the prevailing high level of unemployment. Key words: Population growth, unemployment, economic growth, VECM, Ethiopia