12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

December 28, 2022

    

HOME POLITICS ECONOMY INVESTMENT AGRIBUSINESS MANUFACTURING FINANCE

OIL & GAS TECHNOLOGY HEALTH EDUCATION CULTURE & TOURISM TRAVEL HOSPITAL

NBE BLOG EXCLUSIVE NEWS RESEARCHES BUSINESS DIRECTORY ETHIOPIAN PRODUCTS A

Agribusiness  

Why agriculture is promising investment in

Ethiopia
 May 16, 2021 
BEHAK  1255 Views  arable land, barley, crop production, Ethiopia, fishery, foreign investors,

fruits, Investment, investment in agriculture, investment opportunity, Irrigation, livestock, Maize, meat production,

population growth, promising investment, teff, vegetables, Wheat


6 min read

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 1/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

BY ANDUALEM SISAY GESSESSE –

As the saying goes, problem and shortage

are opportunities for business and
investment. The fact that Ethiopia has been
known for long not been able to feed itself
is an opportunity for those who invest in
agriculture sector.

Like many African countries, Ethiopia at the moment spends billions of dollars every year to
import food items including wheat, rice and processed foods. Changing this using the
underutilized and favorable land and water resources of the country is a rewarding business
venture for investors.

IT/OT Cyberse

With the new home-grown economic reform that give emphasis to improve the country’s
agriculture performance, the Government of Ethiopia has vowed to make food imports history
in a few years period. Indeed, its abundance arable land, water resources, and good weather,
makes the east African country the most favorable place in the world for agricultural
production.

In Ethiopia the average share of agriculture in the gross domestic product is 34 percent. While
its share for employment and foreign exchange earnings in 2018, is 65 percent and 77 percent,
respectively.

The fact that the increase in the number of private farms in Ethiopia over the past few years,
suggest that the government dedication to boost performance of agricultural sector.

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 2/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

The fact that regional governments such as, Oromia Region has been disseminating thousands
of agricultural tractors to cooperatives and farmers unions, is also expected to boost
agricultural output of Ethiopia in the near future by improving performance of smallholder
farmers.

Demand & potential

Boosting investment in agriculture not only helps the country to end become food self-
sufficient, but enables it boost it export to the neighboring Middle East countries as it has been
exporting meat to the United Arab Emirates and Saudi Arabia, among others.

Globally, population growth is also expected to remain the dominant driver of total agricultural
commodity demand over the coming ten years period, in particular for commodities that have
high levels of per-capita consumption in regions with fast expanding populations, according to
the latest FAO & OECD forecast for the coming ten years.

Such opportunities pave the way for countries like Ethiopia to standout as major agriculture
investment destinations. That is why the vision set by the Ethiopian Government to boost its
agricultural products becoming food self-sufficient and exporter of the surplus can be taken as
a feasible plan.

In Ethiopia at the moment crops take the highest share in total production and area coverage
which constituted on average 68 percent of the Ethiopian agricultural gross domestic product.
Agricultural value-added products of the country has increased from $6.65 billion in 2000 to
$20.367 billion in 2019. This signals the potential for the market to expand further with more of
active participation of the private sector.

Finance, new directives

At the moment irrigation agriculture in Ethiopia represents about 6 percent. One of the major
barriers was lack of finance. Though agriculture is one of the most lucrative business with high
return on investment, it is also the most expensive business for investors.

Of the total lending of the banks in Ethiopia not more than 30 percent on average has been
invested in agriculture. As result, farming in Ethiopia has remained to be dominated by
smallholder farmers who are engaged primarily in rain-fed agriculture.

Meanwhile the latest trends like introduction of machinery leasing companies, that provide
agricultural machineries such as, tractors, to farmers’ cooperatives and investors, is likely to
reduce the amount of investment required to embark in farming business in Ethiopia.

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 3/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

The recent aggressive move

by the government, which
helped smallholder farmers
to produce wheat in over 300
hectares of irrigated land,
shows the potential of the
country for developing
irrigation further.

When supported with the

right government policy
intervention and
implementation, which can
Why agriculture is promising investment in Ethiopia
fix the previous abuses of
investment incentives
provided by the government
to the private sector, agriculture indeed can be one of the top economic growth drivers for
Ethiopia in the coming years.

Investment opportunities
Other than crops production, vegetables such as onions, tomatoes and carrots production
using irrigation system, has also been expanding in Ethiopia over the past several years.

In many parts of the country smallholder farmers have been partnering with people from
urban areas who can invest to provide water pumps, fertilizers and pesticides, have been
playing critical role in increasing the production of vegetables and stabilizing the prices of the
produces.

Such venture, which is often mentioned as ‘telephone farming’ has been generating additional
revenue for the investors twice a year with 50 to 100 percent return on investment) and helped
the farmers to fetch half from the total profit.

Expanding such kind of investment in other agricultural produces with more of a structured
‘crowd funding agriculture’ format is likely to help the country fully utilize it potential and
generate good revenue for the investors, while creating thousands of jobs for the youth.

Expanding investment in agriculture is not only about generating profit to the investors,
increasing food production, stabilizing food prices, and increase export revenue for the
country, it also helps in reducing rural to urban migration of youth in Ethiopia.

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 4/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

Such investments will result in fast rural development and wealth creation for the urban youth,
who gradually venture into ago-processing in partnership with both local and foreign investors
and loans from financial institutions.

In addition to major food crops such as, wheat, the gluten free teff, maize, barely, sorghum,
cereals, pulses, oil seeds, vegetables, fruits, roots and tubers, Ethiopia is also endowed with
huge number of livestock. The country has the largest population of livestock in Africa with 56.7
million cattle, including 12.65 million milking cows, 30 million sheep and 23 million goats, 57
million chicken, and huge potential for fishery development.

Meanwhile like that of crop production, the performance of the sector has not been
satisfactory so far. Like that of crop production, one of the major challenges hindering the
growth of the sector is lack of finance. Pastoralists and smallholder farmers haven’t been able
to access enough finance from banks to invest more in animal husbandry.

But with the latest directive of the National Bank of Ethiopia that allows stallholder farmers and
pastoralists to use their livestock as collateral to get loans from banks and microfinance
institutions is likely to improve the performance of the sector.

The fact that the country has recently inaugurated a major animal medicine factory, is also
expected to improve the productivity of livestock sector, while cutting animal medicine import
bill of Ethiopia.

In addition, expansion of infrastructure in rural areas especially close to the pastoralists, who
contribute about 12 percent of the total population of Ethiopia and major livestock suppliers, is
also expected to boost investment in meat processing factories.

In addition fishery will be the biggest investment area as the country completes filling its mega
hydro dam (Great Ethiopian Renaissance Dam) which created one of the biggest artificial
lake in Africa. This also provides huge investment opportunity for both local and foreign
investors to venture in meat, dairy and poultry production of Ethiopia, which ultimately will
https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 5/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

boost Ethiopia’s current hard

currency earning from export
of these products.

Investors can make good profit

by satisfying the growing local
and international demand for
agricultural products as the
demand for these products in
Why agriculture is promising investment in Ethiopia developing countries is
expected to double by 2030
from it was in 2015, according
to the UN Food and Agriculture Organization (FAO).

MATERNITY WEAR MARKET PARTNERS TO UNLOCK

TO GROW BY $2.91 BILLION ADDITIONAL SUSTAINABLE
INVESTMENT
OPPORTUNITIES IN AFRICA

Share This Post:  

Free Master's
See the list of available

Master's Degree Progra

 You May Also Like

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 6/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

Which hotel brand to join

Ethiopia to host 2020
if you have $200
World Economic Forum
thousand?
 January 23, 2019
Ethiopia advised to invest  July 16, 2019
in fighting child marriage
 February 6, 2022

Ethiopian helicopters kill

35 Al Shabaab fighters
Ethio Telecom revenue up
Ethiopia daily COVID-19 18 percent
 January 29, 2019

case increases to 1778

 July 15, 2021
 August 21, 2020

Free Master's
See the list of available

Master's Degree Progra

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 7/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

Founded In 1976. ISO & CE Get a Free Masters in Canada Buy China P

Ad LIMING Crusher Ad Master's Degree Programs Ad made-in-china.co

Stone Crushing Plant Liquid Fertilizer Factory - New-

Used Cars C
Nutri Liquid Fertilizer

Ad Vipeak® Ad new-nutri.com Ad EchoPark® of St.

Latest Headlines

Travel  

Ethiopian Airlines resumes flights to Mekelle

 December 28, 2022 
NBE 
2 min read

Ethiopian Airlines, the largest network operator in Africa, announces the

resumption of its flights to Mekelle from Addis Ababa, the

Politics  

Ethiopia officials arrive at rebels-held

Mekelle
 December 26, 2022 
NBE 
1 min read

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 8/9
12/28/22, 10:34 PM Why agriculture is promising investment in Ethiopia – New Business Ethiopia

A delegation of the federal Government of Ethiopia led by Speaker of the House of Peoples Representatives
(Ethiopian Parliament), Tagesse

Mining  

Local gold mining invests $2

billion in Ethiopia
 December 25, 2022 
NBE 
1 min read

With a total of $2 billion Investment capital, a local

gold mining investment by Time Mineral of Time
General Business

Health  

Start Network finances efforts against Ebola in

Uganda
 December 22, 2022 
NBE 
4 min read

Start Network, through the Start Fund, has disbursed GBP £250,000 across
frontline interventions aimed at curbing further spread of the

    
Home
Politics
Economy
Investment
Agribusiness
Manufacturing
Finance
Trade
Construction
Energy
Mining
Oil & Gas
Technology
Health
Education
Culture & Tourism
Travel
Hospitality
Humanitarian
Tragedy
Crime
NBE Blog
Exclusive News
Researches
Business Directory
Ethiopian Products
About Us
Privacy Policy
ወሬዎች በአማርኛ
Copyright © 2022 New Business Ethiopia  All rights
reserved.

 Powered by BEHAK Multimedia PLC, +251118932529

Addis Ababa, Ethiopia

https://newbusinessethiopia.com/agribusiness/why-agriculture-is-promising-investment-in-ethiopia/ 9/9