Major Economic sectors Analysis and Banking Opportunity
Ethiopia's economy has recorded remarkable rapid growth in the last decade. The recent growth performance of the country indicates the structural change in the economy, from agriculture to the service sector. In addition, all economic sectors have been registering a promising growth rate. The change in the structure of the economy has forced banks and non-bank financial institutions to revise their strategies to be grown with the promising sector of the economy. Awash Bank, as one of the financial service providers in the country, would like to craft its financial service delivery strategy by the promising and policy favored sectors. Thus, using secondary data, the study analyzed the overall economic performance and the structural change process of Ethiopia, considering the three major economic sectors Agriculture, Industry and Service, to Search for possible intervention strategies for the Bank, in terms of financial service involvement, in most growing and favored sectors and sub-sectors. Based on the data analysis results, the study found that the country recorded a high growth before three years then later showed declining trends more recently, since two decades. Also, the economic structure showed the structural change from low productive agriculture sectors to high productivity and more capital intensive service and industry sectors. The achieved growth of economic sectors and economic transformation of the country has been also supported by high value-added sub-sectors of the economy such as trade service, manufacturing and construction, while about 77% of the employed labor is still engaged in agricultural activities even though it is declining slightly. From all economic sub sectors, the average share of production of crops, from agricultural sectors, Construction sub-sectors from industry and Wholesale and trade retailers from the service subsector have the highest performer of Ethiopian economic growth drivers. Thus, the Bank shall consider such more enhancer of economic growth and adjust itself in making the relationship with well-performing economic growth, increase attention towards capital oriented sectors; support export-oriented agricultural producers; avail comprehensive financial service package for growing sectors such as trade and manufacturing; periodically revise the prices and products targeted to selected subsectors; develop out-grower scheme product; provide working capital, develop suppliers credit products; develop a platform to settle exports online and a system to establish cashless transaction between two or more economic subsector key players on the value chain, to win the competition and remain profitable in the industry
Year of publication: |
2022
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Authors: | Kenea, Moroda |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (45 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 4, 2022 erstellt |
Other identifiers: | 10.2139/ssrn.4268041 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014236229
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