Abstract:
Agriculture is one of the main contributors to local economy of Ethiopia in terms of its products
ranging from plant-based foods to household materials. Despite these all benefits and
contributions of the sector, studies have shown that agricultural investment is still facing
financing challenges. In the literatures, the sources of finance for agricultural investment,
performance and challenges of agricultural investment and measures taken for those challenges
have been long justified. The main goal of this paper was to assess the agricultural investment
financing challenges in Gambella city administration and Itang special Woreda, Gambella
People Regional state, Ethiopia. To achieve this objective, data were collected from both
primary and secondary sources, mixed research design was employed, both exploratory and
descriptive research method were used and the 215 sample were selected using simple and
stratified random sampling technique from the total population of the workers of DBE,
investment agency and investors of Gambella city administration and Itang special Woreda. The
data were analyzed using both descriptive and inferential statistics and SPSS version 20 was
used for this purpose to come up with findings and discussions, conclusion and
recommendations. The study found it that, the major challenging factors are the low investment
return, farm risk, security issues, lending procedures, farm size, distant of investor’s farm from
lender, poor infrastructure, lack of technical capacity, farm age and budget failure with their
respective proportion. This study has further revealed that, budget failure, investment return,
farm risk, security issues, infrastructure ,farm age and technical capacity have positive effect on
financing agricultural investment, whereas, lending procedures, farm size, distant of investor’s
farm from lender, farm risk, and have the opposite effect. The study had also found that, all the
explanatory variables with exception of budget failure have significant challenging effects on
financing agricultural investment. Finally, this study recommended that, diversified sources of
finance for agricultural investment must be there, training programs on performance issues
must be there, each challenges must be seriously dealt with and others measures like strong
monitoring and evaluation need to be put into practice.
