Determinants of Private Investment Growth in Manufacturing Sectors: The Case of Akaki Kaliti Sub City, Addis Ababa

Abstract

Private manufacturing investment contributes to the economic growth and the ability of a country to reduce or alleviate poverty and improve the lives of its citizens. This study was conducted to identify the determinants of Private Investment Growth in manufacturing sectors in case of Akaki Kaliti Sub-city, Addis Ababa. The study employed an explanatory research design with quantitative and qualitative research approaches. Furthermore, the data was collected with a cross-sectional period. The required data were collected from 168 selected private manufacturing investments by adopting a systematic sampling technique. The data collected through a questionnaire were analyzed by using Stata software version 13. The collected data was analyzed using both descriptive and inferential statistics. The findings of the quantitative data were presented in tables and figures, while the qualitative data was presented in narration.  The findings of the study showed that work experience and availability of premises affect the private manufacturing sectors investment growth positively. Likewise, the availability of infrastructure facilities was important determining factors in delaying private investment growth. Shortages of materials and services such as transformers, internet facilities, and water supplies have been cited as the major obstacles which delay the investment growth in the study area. In conclusion, the main determinant of Private Investment Growth in manufacturing sectors were working experience, premises, infrastructure, location of enterprise, planning, good governance, market access, and investment incentives. Therefore, the study recommends that Addis Ababa city administration in collaboration with other stakeholders should give training to private manufacturing sectors and facilitate knowledge share program among each other.  Likewise, Addis Ababa city administration in collaboration with trade and industry office needs to involve effectively in supporting private manufacturing sectors by offering convenient display room, selling premises, and creating market linkage with unions, cooperatives, government organizations, and non-government organizations.

Keywords: Private Investment, Manufacturing sectors, Growth

DOI: 10.7176/DCS/11-3-01

Publication date:March 31^st 2021