DETERMINANTS OF AGRICULTURAL PRODUCT EXPORTS PERFORMANCE OF ETHIOPIA

The paper has explored the factors that determine agricultural product export performance in Ethiopia (1993-2022) with a highlight on the major trends, issues, and opportunities that influence the performance of exporting agricultural products. While agriculture remains the backbone of Ethiopia’s economy—driving GDP growth and providing the bulk of national employment—its export potential is stifled by low productivity, fragmented supply chains, and limited access to modern farming technology. The mixed-methods research design was used, which involves quantitative method in order to offer a thorough analysis of the factors that influence the performance of agricultural exports. Secondary sources such as trade statistics, economic reports, were used to collect data, which were analyzed with the help of Autoregressive Distributed Lag model and Error Correction Mechanism to determine both short and long run association between the variables. This research established that GDP growth, government debt, corruption level, infrastructure quality, and Consumer Price Index have a major determinant on the export performance. It is worth noting that although the first attempts at controlling corruption adversely affected exports, it later had a positive effect on the growth. The analysis showed that there was a quick adjustment process applying an average of 67.25 percent of any imbalance in export performance within a year. The results indicate that a long-term economic growth and strong domestic capital formation are critical in increasing the export capacity. Nonetheless, the existence of high levels of indirect taxation always discourages the competitiveness of exports, which means that the policy changes are to be implemented. The report concludes that specific actions are needed to help deal with the structural inefficiency of the agricultural export sector in Ethiopia. Some of the recommendations involve the use of fiscal policies to lower the indirect taxes imposed on exports, investment in infrastructure and the enhancement of governance to allow trade. Keywords: Agricultural exports, Ethiopia, Export performance, Corruption, Infrastructure, Economic growth, Autoregressive Distributed Lag Model, Error Correction Mechanism.