Conditions for Agribusiness Investment in Ethiopia
Ethiopia harbours an extraordinarily rich agro-biodiversity resulting from its geography, climatic differences, ethnic diversity and strong food culture. Unique is the great variation in climates, due to the great variation in altitude ranging from sea level up to 4500 meters. Altitudes between 500 metres (normally warm) and 2600 metres (cool nights and mild day temperatures), and all altitudes in between, are common. This together with ample possibilities for irrigation makes it possible that a large variety of crops can be grown. The hot lowlands are suitable for crops like sugarcane, palm oil, maize, cotton and sesame. On the higher altitudes crops like coffee, tea, teff and roses can be grown and on even higher altitudes wheat, barley and linseed.
The variation in climate also makes it possible to grow all types of fruits, vegetables and flowers. Besides the climatic conditions also the investment conditions in Ethiopia are important.
The government is giving priority to the horticultural sector and other export products like leather, oilseeds and coffee, and as a result the investment package offered is attractive. It includes amongst others a tax holiday and favourable financing possibilities and active assistance for obtaining land. Land can be leased on long-term at very favourable conditions, labour is cheap and loans can be obtained at advantageous terms.
Other important advantages of Ethiopia are the personal safety and the fact that government offices work according to procedures. This results in a relatively low level of corruption compared to other African countries.
The floriculture sector has grown within 5 year from almost nothing to more than 1000 hectares at the end of 2008. At the moment mostly roses are grown but summer flowers show a rapid growth. Recently also lilies and freesias are being cultivated. In addition, the climatic conditions are ideal for the production of plant cuttings.
Export of fruit and vegetables has been limited but is now growing strongly with new investors coming in. Both in Europe and the Middle East a growing interest exists for products from Ethiopia. Presently, the main export products are fresh beans, strawberries, tomatoes, courgettes, peppers and fresh herbs. A new crop is table grapes.
The government gives high priority to the development of the horticulture sector and in
2008 the Horticultural Agency has been established with a specific focus to promote and support the further development of the horticulture sector.
Other fast growing export sectors are oilseeds and dry beans. Of course coffee remains important, with Ethiopia being the motherland of coffee. Furthermore, the meat and leather sectors are developing rapidly.
The demand for dairy and poultry products in the local market is growing and good business opportunities exist in these sectors. Other sectors, like sugar, tea and bio fuel enjoy growing interest from foreign investors.
This article is extracted from the following document under the creative commons license:
- Ethiopian Investment Agency and Embassy of the Kingdom of the Netherlands. October 208. Investing in the Agricultural Sector of Ethiopia: A Guide for New Investors. http://edepot.wur.nl/13. Accessed on December 13, 2014.