The Effect of Coffee, Oilseed and Sesame Export on Economic Growth of Ethiopia
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Date
2025-02-13
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AAU
Abstract
The study's objective was to assess the trend and impact of Ethiopia's agricultural exports coffee,
oilseeds, and sesame on the country's economic growth during the preceding 20 years by looking
at three key factors: the rate of long term adjustment, the trend of agricultural export and
economic growth, and the existence of a causal relationship between agricultural export and
economic growth. The primary agricultural products that have supported the nation's export
economy are sesame, coffee, and oil seeds, notwithstanding its incentives. These products are
characterized by price and quantity volatility and are not very competitive on the global market.
The analysis was done by using co-integration model and Granger causality model. The analysis
includes descriptive statistics and time-series data econometric techniques and ARDL model is
used for analysis. The study's findings showed that coffee exports (lnCOFX), Sesame export
(lnSMX), and gross domestic fixed capital formation (lnCA) proxy for investment has a
significant and positive impact on Ethiopia's economic growth while Oilseed exports
significantly and but negatively affect Ethiopia's economic growth and real exchange rate has a
positive sign and is statistically insignificant in explaining economic growth in the long run.
And there is a strong positive correlation between economic expansion and coffee and sesame
exports. On the other hand, a unidirectional correlation was found between the export of
oilseeds and economic growth, while a bidirectional correlation was found between the export
of coffee and sesame and economic growth. Based on the findings, it is recommended that
policies aimed at increasing the productivity and quality of these cash crops(coffee, oilseed and
sesame) should be implemented to be better on balance of payment and to achieve the desired
goal of economic growth