ASSESSMENT OF THE OPPORTUNITIES AND CHALLENGES OF PRIVATE INVESTMENT IN HARARI REGIONAL STATE, ETHIOPIA

Abstract

The aim of the study was to assess the Opportunities and challenges of private investment in the regional state of Harari. The study was survey type which was collected from sample respondents of 246 investors out of 684 investors in the region. The study has employed survey questionnaire so as to gather data from large number of respondents with in specified period of time. The study used stratified random sampling design because it endeavored to stratify the population in different sectors of investment. Within the strata to select the respondents, simple random sampling; lottery method was used. The study was analyzed using mixed approach both qualitative and quantitative research approach by applying descriptive statistics with the tool Statistical Package for Social Science (SPSS Version 26) computer program to run the questionnaire. From the finding the opportunities include being a world heritage city which is a known tourist destination, tax incentives provided by the state, the availability of infrastructure, being a potential market area (center of trade) among the rural areas surrounding the region and less operational cost mainly labor cost are amongst them. The study has also identified the challenging factors which include high inflation, unavailability of foreign currency, exchange rate fluctuation, interruption of electric power, interruption of water, political instability, poor tax administration and customs procedure, contraband, land provision, less work on awareness creation by the investment office, ethnic conflict among dwellers of the region were among the challenging factor of private investment in the region. In order to overcome the challenges and enhance the opportunities available to investors, the region, as well as the investment office has to work together with investors to create a conducive investment climate to achieve the GTP II goal which is becoming a middle income country by 2025.