Ethiopia's Economic Climate

Investment Opportunities In Agriculture & Agribusiness

Cotton

Large-scale irrigated cotton production is carried out in the Awash Valley where there is about 50,OOOha under cotton. Small-scale farmers cultivate around 42,OOOha of cotton annually. There is a huge potential for the expansion of cotton cultivation especially in the Omo-Gibe, Wabi Shebelle, Baro-Akobo, Blue Nile and Tekeze river basins. There are also export opportunities for lint cotton. Cotton is one area of production which is relatively well integrated into Ethiopia's existing economic structures, with a large number of textile and garment factories established in the country.

Tea

Tea was introduced to Ethiopia in the early 1920s. Since 1980 tea has been planted on a commercial scale. Currently there are 1,300-1,500ha of land under tea cultivation and both domestic markets and exports are growing steadily.

Sugarcane and Spices

Considerable opportunities exist for the production of sugar and spices for both domestic and export markets.

At present, there are three large-scale sugar estates in the country; two of them in the Awash Basin and one in the Blue Nile Basin. Spice bearing plants are cultivated extensively in the southern and southwestern parts of the country. Ethiopia currently exports significant quantities of spice extracts.

Oil Seeds

Oil seeds serve primarily as raw materials for the domestic edible oil industry. Some oil seeds, most notably sesame, are also important export crops. Favorable agricultural and climatic conditions exist for the introduction of coconut into the country, allowing the production and processing of palm oil.

Tobacco

Tobacco is presently grown at two different sites, Shoa Robit and Blatie. The Addis Ababa Cigarette Factory operates the farms. The Show Robit farm covers 80ha and the Blatie farm 250ha. In addition, 350ha of land are cultivated by out-growers who receive extension services from the factory. Nevertheless, the cigarette factory is not self-sufficient in the supply of tobacco and the country is a net importer of tobacco and tobacco products.

HORTICULTURAL DEVELOPMENT

The Agro-climatic conditions of Ethiopia are suitable for the production of a wide variety of horticultural crops, notably fruits, vegetables, flowers and shrubs. The involvement of the private sector is highly encouraged in both the production of edible fruits and in the production and marketing of flowers, horticultural seeds and other ornamental crops. Prompted by the new economic climate, a series of successful flower and horticulture enterprises have begun successfully exporting over the past few years. Ethiopia offers considerable land and labor cost advantages over countries who are already well established in such export markets. There is also significant scope for the establishment of nurseries, storage and preservation facilities. Ethiopian Airlines excellent network of cargo flights provides the possibility for swift and economical export of horticultural goods to Europe and other export markets.

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