African Journal of Economics and Business Research

Employment Dynamics and determinants of Transition from Solo Self-Employment to Employer status

John Massito — 2026-07-30

The labour markets of many developing countries, particularly Tanzania, are dominated by small businesses that are typically owned and operated by a single family member. Evidence suggests that these individual owned businesses make a slow transition from solo self-employment to employer status. There is little understanding of the mechanisms behind this low transition, particularly in the context of Tanzania. Using panel data, a Markov transition framework is employed to model movements between employment states. A logit regression model is then applied to estimate the determinants of transitioning from selfemployment in period t to employer status in period t+1. The findings reveal that the extent of transition between labor market status is small while owner characteristics, environmental and business-related factors, play a significant role in explaining the transition across labour market status. According to the study, policies promoting balanced regional development, enterprise market experience, education, microcredit accessibility, and business information access are critical in accelerating the transition of solo elf employment to employer status.

The Impact of Financial Services Access on Household Entrepreneurship in Ethiopia

Abdulhamid Yusuf Adem — 2026-07-30

This paper analyzes the influence of financial accessibility on entrepreneurship in small business ownership in Ethiopia, using data from the World Bank’s Ethiopia Socioeconomic Survey of 2018-2019. The analysis seeks to find out whether different financial services, including using ATM cards, online banking, mobile banking, and agent banking influence household business ownership. The methods used in this study include descriptive statistics, as well as binary logistic regression analysis. The analysis of results reveals that urban location, and proximity to financial institutions have a significant positive association with entrepreneurship, whereas interest-free banking has a significant negative association. Variables, including other measures of financial access, such as ATMs, mobile, online, and agents, have
insignificant positive relationships. The results imply that financial inclusion does not essentially influence entrepreneurship but depends upon the functional form of financial services, either as a facilitator or as a barrier to entrepreneurship in different contexts. From this study, it is clear that for Ethiopia to grow in terms of entrepreneurship, a combination of infrastructure development in financial sectors, as well as improvement in financial literacy, and an
overhaul of interest-free banking to accommodate small to micro-enterprises, is necessary.

Systematic Review of E-commerce Adoption Barriers among SMEs in Africa

Ishetu Yonas Mengesha — 2026-07-30

Digitalization facilitates more efficient communication and operations between firms, provided that businesses adopt and effectively utilize digital technologies. In developing countries, particularly in Africa, SMEs are facing significant challenges in e-commerce adoption.
The studies conducted on e-commerce adoption in Africa are inadequate and fragmented
with country-specific studies. This study used Technological-Organizational-Environmental
factors framework and analyzed 22 peer-reviewed articles published from 2015 to 2024. The
findings revealed that limited digital literacy and inadequate ICT infrastructure are the most
significant technological factors affecting e-commerce adoption. Among organizational factors, top management support and commitment play a crucial role, while legal and regulatory
factors, as well as security and privacy concerns, are key environmental factors influencing ecommerce adoption among SMEs in Africa. Thus, a collaborative approach involving various
stakeholders in each country is essential for facilitating successful e-commerce adoption.

Effectiveness of Road Transportation Strategies and Accessibility in the Sidama National Region, Ethiopia: A Multilevel Analysis

Shudda Dangisso Siquarie — 2026-07-30

The study examines the effectiveness of the road transport services strategies using service reliability, accessibility, and system integration indicators and multilevel modeling to capture both individual and kebele-level variations in the Sidama Region, Ethiopia. A cross-sectional survey was conducted with 379 households to measure perceptions of service reliability characterized by availability, accessibility, affordability, and integration in the sample kebeles in the study area. Data indices are composed of 32 Likert-scale items, and a multilevel linear model described for clustering at the kebele level (ICC = 0.538). The results showed that service availability (β = 0.42, p < 0.001), accessibility to essential services (β = 0.36, p < 0.001), and integration and efficiency (β = 0.31, p = 0.001) are the strongest predictors of perceived transport services’ effectiveness. The income of respondents positively influenced the perceptions of respondents, while household size presented limited effects. The substantial variation in kebele level was observed, which implies the importance of logistics infrastructure and institutionalization and governance at localized interventions. The findings advocate optimizing availability, access, and service coverage and system integrity; consolidating modal integration to users’ satisfaction; and progressing toward Sustainable Development Goals, particularly SDG 9, SDG 10, and SDG 11. The study significantly contributes empirical evidence and a validated multi-dimensional framework to transport strategies in developing and localized service-oriented interventions over transport planning and equitable services provision.

Drivers of Inflation in Sub-Saharan African Countries: A System Generalized Moment Method

Fassil Eshetu Abebe — 2026-07-30

The aim of this research is to establish the causes of inflation in Sub-Saharan African (SSA) countries through the use of the demand-pull theory and the cost push theory of inflation as the theoretical framework and the system generalized method as the analytical framework. Panel data for 36 SSA countries covering 34 years was used. The result of the descriptive analysis indicated that the rate of inflation follows the money supply rate in SSA countries while periods of high economic growth had relatively low levels of inflation rates. On the other hand, the result of the regression analysis indicated that factors like money supply, population growth, and last year’s price positively relate to inflation while economic growth, government spending, and exchange rates negatively relate to inflation in SSA countries. These findings provide evidence for both the quantity theory of money and the demand-pull theory of inflation. To curb inflation in SSA countries, it is necessary to promote economic growth. A tight monetary policy helps to manage the levels of short-run inflation by restricting aggregate demand, whereas productive government spending helps to manage the inflation levels in the long run owing to the gains made in productivity. Inflation can thus be managed effectively by adopting a well-balanced strategy.

Innovation Financing of Ethiopian Tech Start-ups: Challenges and Opportunities from a Survey Study

Wendewosen Ajeme Tuffa — 2026-07-30

This study intended to identify the challenges and opportunities of innovation financing
among tech startups in Ethiopia. The study further analyzed the association between financing mechanisms used and perceived financing mechanism challenges, factors influencing financing mechanism selection. The study employed descriptive and correlational survey
design using a quantitative approach. Data were collected from 138 tech startups out of
227 eligible tech startups identified from the Ministry of Innovation and Technology through
purposive sampling techniques. The collected data were analyzed using descriptive statistics, Chi-square tests, and multinomial logistic regression analysis through SPSS software.
The findings revealed that the major innovation financing challenges reported by respondents which include limited access to debt, non-dilutive and equity financing. The study
also identified opportunities such as enhancing financial literacy, expanding collaboration
among stakeholders and Leveraging the 2025 Ethiopian Startup Proclamation to Overcome
Regulatory Barriers. The Chi-square analysis shows all the p-value exceeds the standard
threshold of 0.05 indicating there is no statistically significant association exists between financing mechanisms usage and reported financing mechanisms challenges. On the other
hand, the multinomial logistic regression results of the overall model were statistically significant (χ² = 27.590, df = 12, p = 0.006) and showed prior use of a financing type significantly
increases the likelihood of choosing that same type, while perceived challenges do not have
a significant effect. The study suggests to utilize various alternative source of financing like
traditional informal financing options, enhancing stakeholder collaboration, importance of
coordinated efforts among stakeholders and creating supportive regulatory frameworks to
improve startup financing accessibility. The study contributes to understanding of Ethiopia’s
tech startup ecosystem and provides empirical evidence.