Assessment of Factors that Affect Export of Chemical and Chemical Products: the Case of sample firms operating in Addis Ababa

Abstract

The export performance of the chemical industry is much lower than the performance of other industries in the manufacturing sector. It contributed 0.052 Million USD in 2012/13, which increased to 18.63 USD million by 2015/16. Even though the export of chemical and chemical products is increasing, the amount of export in terms of value is very low compared to other sectors like leather and leather industries sector, textile industries sector and meat and milk products industries sector. The main aim of the study is to assess and identify the critical factors that hinder export of chemical and chemical product in Addis Ababa. The internal and external factors that can hinder the export of chemical and chemical product manufacturers are given much emphasis in the study. To this end primary data are collected from 43 chemical industries and employee of Ministry of Industry. Questionnaire and interview were the main data collection tools used in collection of primary data. Secondary data are also collected from different institutions. The study has found lack of expertise, not fulfilling international quality standards, shortage, low quality and inaccessibility of raw materials in the local market, inadequate infrastructure, shortage of power, shortage and inaccessibility of loans to finance export business and shortage of foreign exchange to import raw material from the foreign market. Finally the study recommended facilitation of an experience sharing program with exporters, striving and promoting to fulfill international quality standards, investing in firms which can produce raw material, improving the efficiency of infrastructure, avoiding bureaucracy in different government institutions, inviting foreign companies to invest in the sector and strengthening university-industry linkage.