Determinants Of Agricultural Commodities Export In Ethiopia.

Abstract

Most of Developing Countries are dependent on Agricultural activities in almost all aspects of economy. Therefore, the objective of this study was to analyze Determinants of Agricultural Export in Ethiopia by using Time Series analysis. The time range used in the study covers 1990-2023. Secondary data were gathered from two main sources, National Bank of Ethiopia and Agricultural office of Ethiopia. To analyze the data, Vector Error Correction Model (VECM) was employed after testing for order of stationarity to see the long-run and short-run relationship between Agricultural Export and its determinants. The result reveals that variables are stationary at first difference and existence of both long-run and short-run relationship among variables. Accordingly, GDP, Deposit interest rate, Exchange rate and Foreign Direct Investment have positive effect on Agricultural commodity export and they are statistically significant at 1%. On the other hand, Broad money supply and Openness are affecting level of Agricultural commodity export negatively and statistically significant at 1%. Based on the findings of this study, the concerned body, including Government and National Bank of Ethiopia, should formulate friendly policies and strategies on significant variables to improve the Agricultural export so as to get high performing economy in international market