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Weakening of financial institutions and capital capacity There is not enough capital capacity to invest in Ethiopia to produce enough products. The government lends most of its loans to banks. In addition to loans, the biggest investment in this country is government.
On the other hand, the profit margins of the banks are very low and the participation is low. The country’s economy is based on cash, which has left banks without sufficient credit. Only 10% of the population saves and saves money in the bank. Due to limited resources, banks are not lending enough money to individuals or groups seeking loans. This has led to a lack of strong investment in the country.
There is a high birth rate in developing countries. When the EPRDF joined, Ethiopia’s population was 25 million, now more than 110 million. But the country’s growth has not slowed down. There is a huge gap in terms of making new manpower skilled and productive. If the population does not become more productive, it will increase demand. If this growing population is not productive, there will be a shortage of produce. He is experiencing. Eighty-five percent of Ethiopia’s population is subsistence farmers. It also has a high birth rate in this part of the country.