Factors Affecting of Private Investment Growth (A Case of Burayu Town, Oromia Ethiopia)

Abstract

Private investment plays an important role in the expansion of the economy production capacity and long term economic growth. This study was conducted with the main objective of investigating the factors affecting of private investment growth in burayu town Oromia Ethiopia. The researcher has been applied Private Investment growth as dependent variable and; infrastructure facility factor, market factor and access to bank credit, political instability, capital factor, and investment policy factor as independent variables. The study was conducted at two kebeles namely, Gefersa Gujjee and Abdi Nono purposively. Using proportional random sampling technique, 236 samples are drawn from 587total populations. (Private investment). By taking the research objectives and questions into considerations, as the research approach is quantitative and quantitative research as well as explanatory research design used for in this study. Quantitative of these research method was used through survey questionnaires which were constructed in 5-point Likert scales and distributed obtain primary data from managers/owners and employees of private investment in burayu City Administration from two kebeles, which means; Gefersa Gujjee and Abdi Nono. The qualitative research method would be used through document review and semi-structured interview. Data collected through, unstructured questionaries’ and analyzed data using SPSS version 20. Then, LRM regressions model was applied after the data sets were transformed to natural log form. The finding of the study show that that infrastructure facility, access to credit availability, market factor, Capital factor and Investment policy factor the independent variables have a strong positive relationship with private investment growth and the correlation result shows that Political instability the independent variables have a weakly negative relationship with private investment growth. Based on the finding the study recommended that the Burayu City administration Industry & Investment Office should assign professional that support and monitor the private investment sector. Moreover, the Office of Industry and Investment should increase investor awareness of regulations and acts pertaining to private investment. In addition the city administration in collaboration with the regional and Federal government bodies should allocate adequate budget to establish quality infrastructural facility in the city.