Factors Affecting Effectiveness of Private Investment in Holeta City, Oromia Ethiopia

Abstract

This study was mainly focused to examine factors affecting effectiveness of private investment activities in Holeta City, intends to provide as much valuable information as possible about the City investment Challenging area for investors. In addition, the study examines the trend of private investment in Holeta City. Explanatory type of research design was used in this study by giving more emphasis on quantitative data analysis method. The study used both primary and secondary data. Pre-designed self-administered questionnaire was used to collect primary data. The investment office documents used in gathering the secondary data in this study. In order to obtain primary data, a total of 168 questionnaires were distributed to investors found in Holeta City. The outcome of this study revealed that, the major Factors affecting effectiveness of private investment in Holeta City are Administrative and policy related factors, Infrastructure related electric power fluctuation, water supply and Investment land provision, absence of adequate amount of loan for investors, Unavailability of foreign exchange and exchange rate fluctuations and Market related factors. And Geographic factors are considered as opportunities of private investment in Holeta. The researcher selected three sectors—manufacturing, agriculture, and service—in which private investments were registered at the Holeta city Investment Office in 2024. From the total population of 290 investors in the three selected sectors (Manufacturing, Agriculture, and Service), a sample of 168 investors was taken as sample respondents based on Yemena's formula (67). The questionnaire distribution sample was selected using a probability sampling method, specifically stratified random sampling. The sample for interviews in the qualitative part of the study was chosen using purposive sampling. In the analysis part, the respondents were asked to rate factors from 1- 5(strongly disagree to strongly agree) depending on the degree of effect of variables. If the mean score value of the analysis is below 3, it indicates the variables do not affect the effectiveness of private investment while if it is above 3, the variables are factors that affect private investment. Analysis of data was done using the statistical package for social sciences (SPSS) version 26.0. Based on the summary findings and conclusions, the city's moderate road infrastructure and accessible topography make it an attractive location for private investment. However, the city has various factors that affect the effectiveness of private investment. The researcher has suggested the following recommendations to improve affecting factors, enhance transparency and accountability, give attention to the construction of the industrial park, Facilitating and providing credit services, as well as offering training on asset management and consultancy services for both existing and potential investors and Appreciate commerce and Agro Manufacturing activities and create more Market linkage.