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The Determinants of Medium Scale Private Investment in Gedeo Zone, Snnpr, Ethiopia

Year: 2025
Type: article
Abstract: Medium scale private investment plays a very important role in a country’s overall economic growth by increasing the productive capacity of the economy, creating employment opportunity and promoting technical progress through the introduction of new production techniques. However, the development and expansions of medium scale private investment activities are low in Ethiopia. Hence, this study aimed to identify the challenges and determinants of medium-scale private investment in Gedeo zone, Ethiopia. The study mainly used cross sectional survey data collected through questionnaire from selected respondents in the study area. The study employed a mix of qualitative and quantitative research methodologies, including interviews, surveys, and document analysis. Both descriptive and inferential statistics were used to analyze the collected data. The results of the study reveal that private investors face challenges in accessing investment permit/license, lack of investment incentives, corruption, lack of access to credit, political instability, lack of market access, lack of access to land, existing bureaucracy, lack of adequate infrastructure facilities, and tax rates and administration are found the major challenges making it difficult for them to start and operate businesses in the study area. Inferential statistics results also indicates that the level of education and business experience have significant positive effect on the medium scale private investment, however lack of credit access, lack of adequate infrastructures, lack of land access, bureaucratic red tape, lack of investment incentive, lack of market demand are significant variables which negatively affect the development and expansion of medium scale investment activities in the study area. Therefore improving access to finance, enhancing infrastructure, providing investment incentive, land access, and simplifying regulations would encourage and enhance medium scale private investment activities in the study area.
DOI: 10.20372/nadre:19029
Author: BEREKET ELIAS GENALE
Language: English
Open Access status: green
OpenAlex ID: W7082637152
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