Abstract

Private investment is one of the mainsprings of economic growth. Jimma city has been identified as the low private investment activities in the development and growth of the economy. Thus, the objective of this study is to explain the determinants of private investment in the city. In an attempt to achieve this objective, data was collected through self-administered questionnaire from 171 sample respondents through a systematic sampling technique and analyzed through inferential analysis. Seventeen variables were considered for analysis and the result reveals nine variables, that is, education, marital status, age, personal saving, inflation, public investment, investment incentive, raw materials and land are a statistically significant determinant of private investment of Jimma city. Therefore, if the city has to benefit from the economic rewards of the private investment, it is recommended for all stakeholders to pay more attention to those determinants.

Key words: Administrative factors, factors of production, financial factors, personal factors, private investment.