The Investment Climate In Eastern Africa: A Comparative Study Of Ethiopia And Uganda
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Date
2021-08
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Addis ababa university
Abstract
The investment climate has been viewed as a major stimulus to economic growth in developing countries that shaping the opportunities and incentives for firms to invest productively, create jobs, and expand. FDI has increased as developing countries continue to create the enabling environment to attract foreign investors serve as a strong mechanism for the encouragement and spread of business opportunities there by enhancing economic development and used as technology transfer for domestic investment. Ethiopia and Uganda, over the last decade, pursued various forms of economic reforms in order to become more competitive in FDI attraction. To attain the objective using time serious data from 2005-2019, primary and secondary data collection, as well as administering interview was tools of data collection method. Mixed research approaches both quantitative and qualitative methods are used and descriptive research analysis was applied for the collected data. Finally, triangulation methods used for collected data analysis against the information collected through interview. Analyses of time series secondary date indicate trends of FDI inflow and domestic investment in Ethiopia and Uganda. Depending on the findings and the response of interview from the concerned bodies in the two countries investment sector, the main challenges affecting FDI and domestic investment is weak promotion strategy and justice system, supply of full infrastructure, lengthy procedure of land providing and custom clearance. In addition corruption related problem particularly in Uganda and unequal treatment by the law for foreign and domestic investor especially in Ethiopia are major bottlenecks accounted for decline FDI and domestic investment over years.
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Keywords
Investment climate, FDI and domestic investment, the role of government on investment, the nature and trends of investment, Ethiopian and Uganda Investment sectors