Assessment of Ethiopian agricultural import- export performances using GMM estimation approach

This study examines the import–export trends of Ethiopia, with a focus on the major crop exports: beans, coffee, and sesame over the period from 1998 to 2023. Descriptive statistics were used to assess the import–export composition and trends, and econometric modeling technique was employed using the Generalized Method of Moments to identify the factors influencing the export performance of these key crops. Descriptive analysis results showed that Ethiopia’s exports, particularly in agricultural products, significantly overtook imports during this period, with coffee, sesame, and cattle dominating the export composition. The study also revealed that Asia was the major importer of Ethiopian agricultural exports. It also implied that Ethiopia’s exports are influenced by factors such as the lagged value, Ethiopian gross domestic product, the weighted distance, official exchange rate, the foreign exchange rate and consumer price index of Ethiopia and trade partners. Specifically, the current exports of agricultural products had a positive and significant influence by the lagged values. Moreover, the weighted distance and gross domestic product of Ethiopia showed an important contribution to export performance. The study results depicted that the country should focus on the weighted distance so as to reduce transportation costs enhance macroeconomic policy reforms to boost gross domestic product growth, and manage exchange rate fluctuations to strengthen export performance. Moreover, policy recommendations highlight the importance of diversifying trade partners and improving the supply-side production of key agricultural exports to ensure sustained growth in the export sector.