Opportunities and determinants of rural non-agricultural activities in Ethiopia

Abstract

The main goal of this study is to investigate the characteristics and determinants of rural non-agricultural activities using country representative household survey. This study is based on 14,616 sampled households which was collected from the four main regions of Ethiopia, namely Tigray, Amhara, Oromia and SNNPR which represent more than 90% of the population of Ethiopia. Descriptive statistics and probit model were implemented for the analysis of the study. The study revealed that non-agricultural participation ranges from 17 to 37% in Amhara and SNNPR regions, respectively. The main non-agricultural activities of Ethiopia covers major economic sectors were manufacturing (brewing traditional alcohols and grain milling among others), trade activities (whole sale and retail trade) and service activities (transport, carpentry, repair service and small restaurants among others). The determinants of rural non-agricultural activities include lack of access to agricultural land, low/volatile earnings and social/economic independence. Majorly, lack of market opportunities, limited access to credit, poor access to road and lack of education were most prominent. It was recommended that rural infrastructure development is critically relevant for facilitating the promotion of rural non-agricultural activity of Ethiopia. Key words: Non-agricultural activity, determinants, households, Ethiopia, Probit model.