Research Article
Measuring Size and Causes of Shadow Economy in Ethiopia
Wondimu Mekonnen*
Issue:
Volume 10, Issue 3, September 2024
Pages:
47-59
Received:
16 August 2024
Accepted:
18 September 2024
Published:
10 October 2024
Abstract: The paper estimates the size of the Shadow Economy (SE) in Ethiopia from 1995 to 2022 and rigorously tests the statistical relationships between the SE and various causal variables. In order to carry out the comprehensive econometric analysis, a multiple indicator multiple causes (MIMIC) model was effectively applied. The main causes of the Ethiopian SE are carefully analyzed, and several economic policies aimed at reducing it are thoughtfully suggested. An appraisal of the reliability of these estimates is conducted, along with an alternative benchmark strategy for the MIMIC approach that was proposed for enhanced accuracy. The findings reveal that the causal variables, including tax burden, inflation rate, trade openness, and economic freedom, significantly influence the shadow economy. Furthermore, it shows that indicator variables, such as currency in circulation and official economic growth rates, significantly indicate the presence and extent of a shadow economy. Thus, based on the insightful findings of the research, the author recommends that the government increase trade relations with the rest of the world and promote greater economic freedom. It also endorses adjusting inflation and tax burdens to effectively minimize the shadow economy in Ethiopia.
Abstract: The paper estimates the size of the Shadow Economy (SE) in Ethiopia from 1995 to 2022 and rigorously tests the statistical relationships between the SE and various causal variables. In order to carry out the comprehensive econometric analysis, a multiple indicator multiple causes (MIMIC) model was effectively applied. The main causes of the Ethiopi...
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Research Article
Examining the Effects of Ailing Ajaokuta Steel Plant on Industrialization and Technological Growth in Nigeria
Issue:
Volume 10, Issue 3, September 2024
Pages:
60-72
Received:
9 September 2024
Accepted:
29 September 2024
Published:
18 October 2024
Abstract: Nigeria, out of the exigency to feed her bulging population established a mega iron and steel complex in Ajaokuta, Kogi state to drive technological innovation for productive activities in the country. The steel project was designed to serve as a catalyst for growth and development of industries as well as other sectors of the Nigerian economy. While the existing literature is replete with studies focusing on the factors undermining the operations of Ajaokuta Steel Plant, the effects of underutilized Ajaokuta Steel Plant on the Nigerian economy has received less academic attention. It is against this backdrop that the study examined the effects of ailing Ajaokuta Steel Plant on industrialization and development of technology in Nigeria. The study relied on documentary method of data collection and qualitative descriptive method of data analysis. The study revealed among others that the ailing state of Ajaokuta Steel Plant has adversely affected the growth of indigenous technologies and industries in Nigeria. The failure of the Ajaokuta Steel Plant to produce iron and steel products for the creation of indigenous means of labour has made the Nigerian economy an outrageous consumer of foreign techs and manufactured products. This has not only halted country’s quest for industrialization but has truncated its ability to manufacture what it consumes.
Abstract: Nigeria, out of the exigency to feed her bulging population established a mega iron and steel complex in Ajaokuta, Kogi state to drive technological innovation for productive activities in the country. The steel project was designed to serve as a catalyst for growth and development of industries as well as other sectors of the Nigerian economy. Whi...
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