Browsing by Author "Zemzem Ahmed"

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    Financial Performance of Banking in Ethiopia: a Comparative Study of Interest-Free Banking and Conventional Banking
    (A.A.U, 2025-01-18) Zemzem Ahmed; Kelifa Srmolo
    The main objective of the research was to analyze and compare the financial performance of conventional and interest-free banking systems in Ethiopia, focusing on key financial ratios. The study adopts a quantitative research methodology, using secondary data from the financial statements of selected banks over a period of three years (2021-2023). Key financial ratios such as profitability, liquidity, risk and solvency, leverage, and efficiency ratios are analyzed to evaluate the financia l health and performance of the two banking systems. The findings of the study reveal that the majority of the differences in financial ratios between the two banking models were not statistically significant. However, Interest-free banks while more stable, faced higher operational costs relative to their income. The comparative analysis highlights relative strengths and weaknesses of each banking system, with conventional banks demonstrating greater resilience to economic shocks and interest-free banks showing higher efficiency in using assets and equity to generate profits. The study recommends that conventional banks focus on technological innovation and enhanced risk management practices to maintain competitiveness. Interest-free banks are suggested to optimize their debt management and improve cost efficiencies to ensure long-term sustainability. Additionally, the study suggests further research into the impact of regulatory frameworks on the performance of both banking systems and their role in promoting financial inclusion. This research contributes to the understanding of financial performance in Ethiopian banking and provides valuable insights for both policymakers and banking institutions looking to enhance the effectiveness and stability of their operations Key Words Interest-Free Banking, Conventional Banking, Financial Performance, Comparative Analysis, Financial Ratios
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    Trade Liberalization and its Impact on Economic Growth: The Case of Ethiopia .
    (A.A.U., 2010-05) Zemzem Ahmed; Hussien Hamda
    These days the domestic growths of countries are related to liberalization and international donors are highly preaching its importance for less developed countries in particular. The purpose of this paper is therefore to estimate the impact of trade liberalization on Ethiopian economic growth. The massive reform undertaken in 1992 taken as a structural break, the study uses a time series data ranging from 1970 to 2009. Two-Stage Least Squares (2SLS) regression and Error Correction Method (ECM) methods were used to examine the relationship of trade liberalization with export, import and GDP. The empirical results indicate that the trade reform had positive impact on both imports and exports whereas its impact on imports is faster and higher than that of exports, worsening the trade balances. The result also shows that trade liberalization had negative impact on GDP growth as result of its worsening effect on trade balances. Therefore, the study suggests that the country should increase its exports to reap the jidl benefit of trade liberalization. Diversifying exportable through incentives, creating enabling environment for foreign direct investment and improving policy and institutions of the country are the policy implication of the study to get out of the worsening trade balance. Key words: Trade Liberalization, Economic growth, Export Growth, Import growth, time series analysis and Ethiopia.