Business Opportunities In Ethiopia Economics Essay

As there are batch of concern chances in Ethiopia in different sectors, as it is non possible to turn to all of them. But seek to concentrate and seek chances on some of basic and of import concern sectors for foreign investors

3.1 Business Opportunities in Manufacturing Sector

The fabrication sector plays an of import function in economic system of Ethiopia it has about a portion of 5 % of GDP and 37.8 % to the one-year end product value of industrial production in 2008/09 ( Central Statistical Agency Statistical Abstract 2009 ) . The of import fabrication sectors in Ethiopia areA production of nutrient, drinks, baccy, fabrics and garments, leather goods, paper, metallic and non-metallic mineral merchandises, cement and chemicals.A The production of fabric and garments, leather merchandises and agro-processing are one of the most of import countries for investing, because of its geographical advantage of easy and fast entree to Middle-East and Europe.

In fabricating subdivision we discussed on concern chances in fabric and garment industry and leather merchandise.

3.1.1 Textile and garment

In 1939 under the Italian authorities supervising and engineering, the first fabric mill was opened. Soon the current fabrics industry involves in the procedure of spinning, weaving and processing. Ethiopia has five public fabric mills bring forthing largely work-wear garments for the domestic market. Numerous privately-owned mills produce shirts, suits, work apparels and uniforms for national and foreign markets.

Ethiopia ‘s fabrics and vesture industry is undergoing major development, aided by the presence of a inexpensive, skilled and highly-motivated work force. This rush has been helped by the state ‘s impressive economic growing over the past old ages. Ethiopia ‘s tremendous export potency is made possible by the broad handiness of natural cotton and other natural fibres and Ethiopia ‘s entree to domestic, regional and international markets.

The footing for the full rhythm of concern chances and the tremendous growing potency for the fabric industries is the local production of cotton. Large-scale production is carried out under irrigation, chiefly in the Awash Valley, which has more than 50,000 hectares under cultivation. Another 45,000 hectares of high-quality cotton is cultivated by small-scale husbandmans. There still exists immense potency for the enlargement of cotton cultivation in Ethiopia, particularly in the Omo-Gibe, Wabi Shebelle, Baro Akobo, Blue Nile and Tekeze River basins. The production of cotton is good integrated into the fabric sector, with garment mills trusting to a great extent on domestically produced cotton.

Available within Ethiopia are all indispensable ingredients for a competitory fabric industry: natural stuffs, low rewards and low energy costs. This gives the state a comparative advantage over other states and parts. The Ethiopian Government is actively advancing the farther modernisation of the fabric sector with the purpose of pulling foreign investors that can perforate the planetary market.

Output and Merchandises

Ethiopia ‘s fabric fabrication industry embraces both medium and big public and private endeavors. Their chief activities include whirling, fabric preparation, dyeing, completing and run uping.

The Ethiopian fabric industry is the 3rd largest fabrication industry, merely 2nd to the nutrient processing, drink and leather industry. In the financial twelvemonth 2000/01, with a entire end product value of 699.91 million birr ( 1USD=8.6 birr ) , the part of fabric industry to GDP was 1.35 % and 8.31 % to the end product value of the fabrication industry.

The Ethiopian fabric sector chiefly produces 100 % cotton fabrics. Each endeavor produces one merchandise scope, such as cotton narration, cotton cloths, bed sheets, cover, knitwear etc. All the cotton narration in the Ethiopian market is supplied to the local handlooms. It is estimated that the one-year handwoven cloth is around 95 million square metres.

Supply of natural stuff and accoutrements

Out of the natural stuffs used by fabric endeavors, cotton is widely grown in Ethiopia and it is easy available from local providers. Other stuffs including chemical fibre, wool, dyestuffs and chemicals every bit good as a little portion of lint depend on imports.

Export Market

Datas from Ethiopian Export Promotion Agency show that the financial twelvemonth 2000/01 witnessed evident addition over the old twelvemonth both in the assortment and measure of fabric export. Assortment increased from 6 sorts, chiefly cotton narration and bleach fabrics made from pure cotton, to over 20 sorts including grey cloth pure cotton, bleach fabric, knitwear, bedding merchandises etc. Among them, grey fabric made from pure cotton is the major export point, approximately lending to 2/3 of the entire export measure.

Ethiopia ‘s fabric export is chiefly targeted at European and African markets. In Europe, the export finishs for Ethiopian fabrics are Italy, Sweden, and Belgium etc. African major export finishs are Djibouti, Kenya, and Swaziland etc.

Ownership and geographical distribution of fabric endeavors

Due to the reform undertaken by the Ethiopian authorities in recent old ages, such as denationalization and the favourable conditions for the influx of foreign and domestic private investing into the fabric sector, ownership of the industry has diversified. Assorted type of ownership, such as public endeavors, in private owned endeavors, shareholding corporation, partnership endeavor and single endeavors etc have come into being and developed.

Broadly sorting the endeavors into public and private, there are presently 19 public and 16 private endeavors which makes a sum of 35 endeavors. Most public endeavors are big graduated table, playing taking functions, as evidenced by the figure of endeavors and employees, entire end product values, income from gross revenues etc.

Most fabric endeavors are situated inA dumbly populated big or average metropoliss. Out of the entire 35 fabric endeavors in Ethiopia, 18 are in Addis Ababa, the capital metropolis. Textile enterprises located in Amhara and Southern ( S.N.N.P ) parts are 6 and 5 severally.

Marketing System of fabric merchandises

Merchandises such as narration, cloth and cover made by Ethiopian fabric endeavors are normally distributed by private trading companies to the local market. The export of the merchandise is chiefly handled by the endeavors themselves.

Imported fabric keep a big market portion in Ethiopian market and about one thousand small-scale family-owned trading houses and a little figure of big trading companies are engaged in the import concern of fabric.

Favorable Conditionss for the Development of the Textile Sector inA Ethiopia

Abundant Cotton Resources

Ethiopia covers an country of 1.1036 million square kilometres and boasts huge fertile land, rich geographical and upwind conditions, and abundant H2O resources. Domestic cotton production has already developed to a certain graduated table and for a long clip it has made major part to fulfilling the demand of fibre by the fabric sub-sector. Ethiopia has a big country of irrigated farming area which is really suited for seting cotton. There is besides great potency for farther spread outing the cultivation and increase the current output.

Abundant inexpensive labour resource

With a population of more than 70 million, and with inexpensive cost of labour, Ethiopia can supply sufficient labour force with cost-competitiveness for the development of labour intensive fabric sub-sector. The cost of labour in the Ethiopian fabric sector is non merely lower than some Asiatic states with developed fabric sector, such as China, India, Pakistan but besides than some African states such as Tunisia, Mauritius, Kenya, etc.

Support through policy and inducements

Ethiopia identifies fabric as the key industry to the development of industrialisation every bit good as the development of local resources to advance export in conformity with the policy of A?A° Agriculture Development led Industrialization ( ADLI ) .A?A± The long-run scheme of the Ethiopian authorities is non merely to develop the fabric and garment industry and spread out portions in domestic market, but besides to develop a competitory, profitable industry in the export market.

The Ethiopian authorities has been steadily forcing towards market-oriented reform by agencies of developing the private sector, deregulating stiff control over the economic system, liberalising foreign exchange, take downing duty rate, etc. Given that export publicity is of paramount importance, the authorities has issued a series of export inducements. All in all, in footings of macroeconomic policy, the Ethiopian authorities has created an enabling environment for the development of fabric sub-sector.

Investing policy and inducements

Harmonizing to the freshly revised investing policy, the minimal capital required for foreign investors has been lowered, making a contributing investing environment.

-A A A A A A A A A A The minimal capital demand for foreign investors on a individual investing undertaking has been reduced to 100, 000 USD from 500, 000 USD for entirely invested undertakings and for joint venture it has been lowered to 60, 000USD from 300,000USD.

In add-on, a series of investing inducements have been put in topographic point, such as:

-A A A A A A A A A A Remittance of foreign currency of net income and dividends from investing

-A A A A A A A A A A Exemption from income revenue enhancement from 1-5 old ages etc.

In order to advance export, assorted flexible revenue enhancement encouragement steps have been undertaken such as export revenue enhancement refund, revenue enhancement voucher and bonded warehouse. Simplified processs have greatly shortened imposts clearance clip.

The Ministry of Trade and Industry has launched fabrics and garment export forum to pull domestic fabric and garment exporters into the treatment of issues and future development for fabric and garment sector in order to advance the export of fabrics and garments.

A Increased Domestic Demand

Ethiopia has a big district with a big population. The growing rate of the population is 2.7 % , making a big possible market.

Harmonizing to the state economic development plan, the mean growing rate of GDP in the coming old ages will make about 7 % . As a consequence of the development of economic system and the advancement in decrease of poorness every bit good as the betterment of peopleA?A?s life criterions, it is believed that non merely the present market demand would increase, but besides a new market demand will originate. Presently the Ethiopian per capita fibre ingestion is approximately 1kg, which is far below the universe ‘s mean degree of 8.7kg and Africa mean degree of 3.2 kilogram. It is estimated that domestic fibre demand will increase at an one-year rate of 5 % and the big and continuously increasing domestic market will fuel the development of the fabric sector.

Easy entree to international market

In the latter half of the 20thA century, the ingestion of fibre merchandises all over the universe has increased five times, while the universe population has increased merely 1.4 times.A A The improved life criterions quality of human existences has created 2/3 of the addition in fiber production. In recent old ages, along with the resurgence of universe economic system, peculiarly the economic growing of U.S.A, Europe and Japan, the market demand has increased. In 2000, import volume of fabrics in the universe amounted to US $ 167.13 billion. The United States and EU were the two largest fabric importers, A A busying 39.2 % of the worldA?A?s fabric import value.

Africa Growth Opportunity Act ( AGOA )

In May 2000, the United States approved Africa Growth Opportunity Act ( AGOA ) to give sub-Sahara part of Africa, specifically 48 states, particular discriminatory trade policy. In August 2001, Ethiopia was entitled AGOA makings and is one of the 18 beneficiary states which can export fabrics and garments to the United States free of responsibility and without quota limitations.

“ Everything but Arms ” of the European Union

The European Union ( EU ) has given discriminatory trade policy to the Lesser Developed Beneficiary Countries ( LDBC ) including Ethiopia. Consequently, Ethiopia is a beneficiary of Everything but Arms enterprise of the EU in which all Ethiopian export merchandises except weaponries can come in the EU market free of responsibility and without quota limitations.

Common Market for Eastern and Southern Africa ( COMESA )

Ethiopia is a member of the Common Market for Eastern and Southern Africa ( COMESA ) understanding encompassing 20 states in Eastern and Southern Africa with a population of about 353 million. Exports and imports with member states enjoy discriminatory duty rates.

Bilateral Agreement

Ethiopia has signed bilateral trade understandings with 16 states such as Russia, Turkey, Yemen etc which provide legal model for basking most-favoured-nation intervention and taking duty barriers. Harmonizing to Generalized System of Preference ( GSP ) , most of the merchandises made in Ethiopia bask duty intervention in the United States, Canada, Switzerland, Norway, Sweden, Finland, Austria, Japan and the bulk of EU member states.

3.1.2 Leather merchandises

Ethiopia exports processed and semi-processed fells and teguments to the universe market. Some of the merchandises, such as Ethiopian upland fleece ( which has gained an international repute for doing baseball mitts ) , are known for their quality and natural features. Ethiopian fell and skin exports include pickled sheep tegument, wet bluish sheep tegument, crust sheep tegument, wet blue caprine animal tegument, crust caprine animal tegument, crust cow fells, finished garment leather, finished baseball mitt leather, lining/upper leather, suede leather, full grain leather, embossed leather and patent leather.A

The fabrication and export potency of finished leather and leather merchandises ( such as leather garments, footwear, baseball mitts, bags and other leather articles ) is besides extremely assuring.

Production capacity of fells and teguments

Ethiopia has a major comparative advantage in the natural stuffs sector needed for the leather sector which makes it in rule really appropriate for leather merchandise exportation: Yaltopya has the largest farm animal production in Africa, and the 10thA largest in the universe. Ethiopia ‘s farm animal population is presently estimated at 35 million cowss, 21 million sheep and 16.8 million caprine animals. Annually it produces 2.7 million fells, 8.1 million fleeces and 7.5 million goatskins. [ 1 ] A This comparative advantage is farther underlined by the fact that the cost of natural fells and teguments constitute on norm between 55 to 60 % of the production of semi-processed leather ( Kiruthu 2002 ) .

These informations are provided by LLPTI and ETA. Muchie ( 2000: 539 ) provided somewhat different estimations for the late 1990 ‘s: 30 million cowss, 24 million sheep and 19 million caprine animals, while CSA ( 2002 ) provided diverging figures for 2000/01, particularly in the instance of teguments: 35.4 million cowss, 11.4 million sheep and 9.6 million caprine animals.

Leather processing classs and providers

With in the leather sector, the CSA distinguishes two wide classs. The first 1 is the tanning/dressing of leather, industry of baggage and pocketbooks, while the 2nd concerns the industry of footwear. The footwear endeavors are more legion, but smaller in footings of employment than the former class. For illustration, in 1999/2000 out of 53 leather constitutions, 38 ( 72 % ) were in footwear, using merely 49 % of the entire individuals engaged ( CSA 2002 ) . Since the ruin of the Derg, a rapid enlargement has been taking topographic point in the tannery sub-sector. In 1990 there were merely eight sixpences, dwelling of six public and two private workss. In November 2002, 19 tanneries were registered with the Ethiopian Tanners Association ( ETA ) : 15 private and 4 public 1s ; the latter are in the procedure of denationalization. Furthermore, six private tanneries are in development.

The one-year sheep and goatskin production of an estimated 15.6 million teguments falls below the capacity of the 19 tanneries ( LLPTI ) . Harmonizing to the ETA, the current day-to-day capacity of the tanneries of 133,450 teguments is being utilized for merely 50.1 % , while this per centum is higher for fells ( 65.6 % ) , albeit of a much lower day-to-day capacity of 5,055 fells. All but one tannery can bring forth teguments, while merely half of them have the capacity to bring forth fells.

Sing small-scale footwear manufacturers in Addis Ababa, some surveies have been undertaken ( e.g. Tebarek 1997, Tseguereda 2002 and Zewdie et. Al. 2003, this volume ) . There is a clear bunch of such manufacturers in a specific portion ofA Merkato, the largest alfresco market in Africa. Within this bunch ( i.e.WoredaA 5 ) , there is a sub-cluster calledA Shera Tera, where there are non merely many manufacturers, but besides the largest concentration of providers of about all natural stuffs necessary for shoe production. The really being of a well-developed system of providers in the footwear sector represents one of the chief assets of little shoe manufacturers. The ability of providers to fabricate a broad assortment of merchandises with short bringing times allows the shoe manufacturers to prorogue to the last minute their purchase of inputs.


“ Sheep and caprine animals teguments represent the majority of Ethiopian leather production. Ethiopian upland fleeces ( cabretta ) , in peculiar retain a high repute in international markets for some natural features of lucidity, thickness, flexibleness, strength and compact texture which make them particularly suited for high quality baseball mitts, athleticss equipment and garments.A Goat skins classified asA Bati-genuineA andA Bati-typeare characterised by midst, extremely flexible and clean inner surfaces and are in high demand for the production of manner leathers, particularly suede ( aˆ¦ ) . Hides, in position are non regarded as peculiarly attractive in international markets due to the hapless quality and the little size of theA zebu, A the most common bovine in Ethiopia. ” ( Bini 2002: 17 ) .

The Ethiopian leather and leather merchandise sub-sector produces a scope of merchandises from semi-processed leather in assorted signifiers to processed leathers such as shoe uppers, leather garments, stitched upholstery, school bags, pocketbooks, industrial baseball mitts, and finished leather. Such leather merchandises have been exported to markets in Europe, the USA, Canada, Japan and the Far East. There is besides export to states in Africa, in peculiar to Nigeria and Uganda, every bit good as to the close East, i.e. Yemen. The market for leather merchandises is mainly international and non domestic.


During the past two decennaries leather and semi-processed fells and teguments have constituted the 2nd major export merchandise of the state with between 10 and 20 % of entire foreign net incomes, 2nd merely to coffee with between 50 and 60 % of net incomes ( apart from the late 1990 ‘s when it was merely under 10 % ) . The per centum has been fluctuating, and the most recent figures indicate aA decreaseA in exports. In 2000/2001, 12,170 dozenss of teguments and fells were exported, bring forthing 618 million Birr ( about US $ 73 million ) ; this accounted for 17.2 % of entire foreign net incomes. However, in the 2001/2002 financial twelvemonth a smaller volume ( 10,462 dozenss ) of teguments and fells were exported, and, as a consequence, merely 481 million Birr was obtained, accounting for 14.1 % of entire foreign net incomes ( Addis Tribune 2002 ) . It has to be said though that the twelvemonth 2000/2001 witnessed a extremum in the foreign net incomes in this sector.

The largest portion of the foreign net incomes comes from fleeces ; in 1995 fleeces, chiefly in pickles, accounted for 66 % of the sum of US $ 61.3 million in foreign net incomes by the leather sector, while this per centum was 18 % for ( wet-blue ) goatskins and 16 % for fells and other teguments ( Muchie 2000: 549 ) . It is besides sometimes claimed that the big bulk ( i.e. 90 % ) of all the fleeces that are produced in Ethiopia are exported. The importance of Ethiopian exports relative to other African states, can be indicated by the portion Ethiopia contributes to entire African tegument exports: 51 % in the instance of sheep and 30 % in the instance of caprine animals. Exported merchandises go in peculiar to the UK and Italy ; in 1996 these states took up 27 % and 26 % severally ( Kodama 2001 and Muchie 2000 ) .

Constraints for development


A major job with the leather sector is the byproduct position of fells and teguments: Cattle, caprine animals and sheep are chiefly used for meat ( californium. Kodama 2001 and Worku 2002 ) . Therefore, the merchandise, i.e.A fells and teguments, arrives when meat is needed, non when it is appropriate for leather processing. In Ethiopia meat is needed in three moving ridges because of sacredly induced fasting seasons and festivals ; for illustration, in Amhara, which provides the largest volume of fleeces, these festivals are Easter ( April ) , Ethiopian New Year and Mesqal ( September ) , and Christmas and Timqat ( January ) .


As a consequence of this byproduct position, non adequate attending is paid to keeping the quality of the fells and teguments. Different serious jobs at the beginning impacting on the leather quality are: flay cuts, rot, animate being diseases ( ekek ) , branding, hapless form, soil and droppings, hides/skins are non sold when monetary values are considered to be excessively low ( deteriorating quality ) , etc. Estimates of the loss to the Ethiopian economic system due to such jobs reach US $ 14 million per twelvemonth. In order to turn to these jobs, ( pilot ) undertakings are afoot with the engagement of ESALIA, CFC, UNIDO, FAO, UNIC and others.

At the same clip, meat ingestion, particularly in the rural countries, is intertwined with the system of nutrient security. Unless the nutrient security of provincials is ensured, the meat ingestion will non increase.

Berhanu and Kibre ( 2002 ) have made an interesting survey of fight in the Ethiopian leather sector. For the tanning sector, they have concluded that the chief factors affectingA fight are:

low capacity use ;

the hapless economic substructure: inefficient substructure and inefficient bureaucratic constructions combined significantly raises the dealing costs of houses, doing it hard to vie nationally or internationally ;

the engineering employed is non updated ( on a regular basis ) , in peculiar the deficiency of acquisition in production direction ;

the deficiency of difficult currency to buy trim parts and inputs ;

the comparative deficiency of export support and/or publicity services

For the leather footwear houses, the chief factors impacting fight are the hapless quality of domestic leather, and the high cost of ( imported ) inputs.

They conclude that resource gift is non plenty for fight, and that, likewise, the handiness of inexpensive and abundant labor by itself does non look to be sufficient to vie internationally. Labour costs in Ethiopia, for illustration, are estimated to be lower than those in China: the basic pay in Ethiopia is around US $ 0,7 per twenty-four hours, or about 6 Birr, while it is around US $ 1 in China. Most relevant with regard to engineering is the deficiency of timely and efficient care, alteration, and invention. This has in peculiar to make with the deficiency of trim parts ( foreign currency deficit ) , and unsatisfactory larning attempt exhibited by labor and direction.

3.1.3 Recommended Modes of Entry in Manufacturing Sector

Recommend manner for Textile and Garment Industry & A ; Leather merchandises

The authorities of Ethiopia invites companies to take part in the investing of Ethiopia ‘s fabric industry. Foreign companies can take part in this industry in the undermentioned three signifiers:

1.A A A A A A A A By puting up wholly-owned ( exclusive ) endeavors by themselves.

2.A A A A A A A A By puting up endeavors in joint venture with Ethiopian companies.

3.A A A A A A A A By set uping cooperation with Ethiopian public endeavors. These endeavors, which are in the procedure of denationalization by the authorities, have their ain hereafter chances and programs. Some wish to spread out their endeavors by put ining new and modern machinery and equipment, some would wish to develop their human resources through preparation. Some would wish to analyze new market chances, etc. Therefore, there are assorted ways of cooperation with these endeavors, which may necessitate treatment with specific endeavors. However, there are three signifiers of cooperation which applies to all endeavors which foreign investors can take part. These are:

a ) A A A A A A A Joint venture

B ) A A A A A A Wholesale ownership

degree Celsius ) A A A A A A Contract Management

vitamin D ) Direct investing

3.1.4 SWOT Analysis


Handiness of first-class resources/huge domestic natural stuff base

Abundant and cheap labor force

Attractive investing inducement bundles and revenue enhancement construction

Significant growing industries: norm of circa 10-30 % per sector.


Lack of trained direction and skilled worker

Quality of finished merchandise

Lower Productivity in assorted segments.A

Industry is extremely dependent on Cotton and natural leather.

Lack of Technological Development that affect the productiveness and other activities in whole value concatenation


Large, Potential Domestic and International Market.

Product development and Diversification to provide planetary needs.A

Scope for move toward garment substructure and value added production

Scope for efficaciously working markets with stage out quota government efficaciously

Scope for Technology up step on equipment forepart


Continuous Quality Improvement is need of the hr as there are different demand patterns all over the universe.

International labour and Environmental Laws.A

To equilibrate the demand and supply.

To do balance between monetary value and quality.A

3.2 Business chances in Agriculture Sector

Agribusiness is the anchor of the Ethiopian economic system. The sector contributes about 43 % of the GDP and 86 % of exports.A The export of Ethiopia is dominated by java and oil seeds, which together accounted to 50.6 % in 2008/09. Other chief export trade goods are ‘chat ‘ , flowers, pulsations, and unrecorded animate beings.

Yaltopya with 18 major agro-ecological zones and assorted agro-ecological sub-zones has a suited clime for turning over 146 types of harvests.

3.2.1 Food and drink harvests


Maize is an of import harvest in Ethiopia. It is grown in the mid upland countries of the state. There are immense piece of lands of land in all parts suited for corn agriculture. Maize is chiefly produced in SNNPR and Oromia parts where there are about 1.77 million hectares under cultivation.

Wheat and Barley Farming

Wheat and barley are largely grown in the Highlandss and mid upland countries of the state chiefly in Oromia ( Bale and Arsi Zones ) and some parts of Amhara ( North Gondar and North Shewa ) Regions.A

Wheat and barley are the chief cereal harvests in the state with about 1,095,436 and 1,398,215 hectares under cultivation, severally. The potency for the private sector in agro-processing and out agriculturists ‘ strategy of development is important. It offers first-class chances for production of wheat under irrigation in the Afar, Gambella, SNNPR and Somali Regions.

Oil seeds and pulsations

A assortment of oil seeds ( e.g. benne, rapeseed, flaxseed, Indian potato, sunflower, Niger seed, cotton seed, etc. ) are grown in Ethiopia. The demand for benne has been increasing in the planetary market doing sesame an progressively of import export trade good in Ethiopia. In 2008/09, Ethiopia exported 287,000 dozenss of benne valued at 356.1 million USD, accounting for 24.6 % of the entire export net incomes. Rapeseed, flaxseed, Indian potato, sunflower, Niger seed and cotton seed besides serve as natural stuffs for the domestic comestible oil industry.A

Cultivation of pulsations like beans, peas, garbanzos, lentils, soya beans, etc. is besides common in Ethiopia. Cultivation is carried out in both the upland and lowland countries of the state chiefly by peasant husbandmans. Presently, the state exports a big measure of pulsations to the international market. There are besides a figure of mills that process pulsations in the state.

Rice Farming

Rice could appropriately turn in many parts of the state. The prevailing possible countries are: –

West cardinal Highlandss of Amhara Region ( Fogera, Gonder Zuria, Dembia, Takusa and Achefer ) ;

North West lowland countries of Amhara and Benshangul Regions ( Jawi, Pawi, Metema and Dangur ) ;

Gameblla regional province ( Abobo and Etang Woredas )

South and South West Lowlands of SNNPR ( Beralee, Weyito, Omorate, Gura Ferda and Menit ) ;

Somali Region ( Gode ) ;

South Western Highlands of Oromia Region ( Illuababora, East and West Wellega and Jimma Zones ) .


The major spices cultivated in Ethiopia are ginger, hot Piper nigrum, Greek clover, turmeric, cummins, cardamons, Chinese parsleies and black Piper nigrum. Presently, there are about 122,700 hour angle under spice agriculture. Spice production reached 244,000 metric tons per twelvemonth. The possible countries for the cultivation of spice are Amhara and Oromiya, SNNP and Gambella parts. The possible for low land spice agriculture is estimated to be 200,000ha.


Ethiopia is one of Africa ‘s prima exporters of java bring forthing most of its export net incomes. Coffee is grown over 600,000 hectares, the largest of these countries lie in the South and south western Highlandss of the country.A More than 60 % of Ethiopian java is produced as wood or semi-forest java. The four chief java turning parts in Ethiopia are: Harrar, Ghimbi, Sidama /Yirgacheffe, and Jimma/Keffa.

The state has more familial diverseness among its java assortments than any other county. A Nine different assortments are cultivated in the four major turning areas.A


Ethiopian tea is some of the best quality tea in the universe. Ethiopia ‘s current one-year tea production from three private estates is about 7000 dozenss of black tea per annum. The entire country covered by tea plantation is 2700 hour angle and the state merely produces black tea but has possible to turn all types of tea. Investment possible exists in large-scale commercial tea production and modern tea blending and wadding industries. The tea industry in Ethiopia has been missing investing. The Government has been proactive to increase private investing in tea plantations. As portion of its denationalization plan for province owned endeavors, in 2000, two estates covering 2,109ha for $ 27milliom USD were sold to private investors. Furthermore, an Indian company that owns and runs the Tata Tea Estate has signed an understanding with a domestic owned private company to pull off the tea estate. The company will reassign the latest engineering of tea planting, turning, reaping and fabrication of black tea, aid in seting tea in 5,000 hectares of land and besides have the option of puting in the equity of the company at a hereafter day of the month.

3.2.2 Horticultural harvests

Due to Ethiopia ‘s good agro-climatic fortunes it is able to bring forth fruits and veggies throughout the twelvemonth. Both the low- and upland countries offer good chances. The major fruits and veggies turning countries of the state are summarized as follows

East Hararghe ( eastern portion of the state ) with veggies ruling,

East Shewa ( Central Ethiopia in Oromia Regional State ) produces both fruits and veggies including tomato, green beans, orange, Citrus reticulata, papaia

West Shewa ( cardinal Ethiopia in Oromia Regional State ) which is good for bring forthing tomato and Mangifera indica fruits

Arsi ( cardinal Ethiopia in Oromia Regional State ) , peculiarly in the Awash River basin which is known for its assorted types of fruits and veggies,

Gamo Goffa ( Southern Nations, Nationalities and Peoples Regional State ) , peculiarly Wolaita and Sidama zones, are good manufacturers of banana, alligator pear, Ananas comosus, papaia in assorted territories

Dire Dawa and Harari ( eastern Ethiopia ) are besides good known production and supply countries of both fruits and veggies.

South Tigray and West Gojam parts of Amhara.

The Ethiopian authorities has selected four precedence countries for farther development of the horticultural sector. These four countries are Tana Beles, Rift Valley, Dedessa vale and Dire Dawa. In add-on, the regional authoritiess have made land available for gardening intents near to the regional capitals of Bahir Dar ( Amhara ) , Makelle ( Tigray ) and Awassa ( SNNPR ) , with good irrigation possibilities. Additional inducement bundles are provided by these regional authoritiess for first movers.


The figure of small-scale manufacturers involved in gardening is estimated at 5.7 million husbandmans. Few smallholder husbandmans are engaged in out agriculturists ‘ agreements and some husbandman ‘s concerted brotherhoods have been established.

The past five old ages have seen a major alteration in authorities policies towards the gardening sector, reflecting attempts to airt the economic system off from centralized planning to a more liberalized economic system. The Government of Ethiopia progressively considers the private sector as the engine for economic growing and the accelerator for employment creative activity and export enlargement. As a consequence private companies were allowed and facilitated with an array of inducements to prosecute in the sector. In the fruit and vegetable sector current production is dominated by two province farms, viz. the Upper Awash Agro-Industry Enterprise ( UAAIE ) and the Horticulture Development Enterprise ( HDE ) , both are presently in the procedure of being privatized. Alongside the province companies a figure of private sector companies are involved in production, processing and export of vegetable merchandises.


Small-scale husbandmans produce 2.1 million metric tons of veggies from 260 thousand hour angle while the State Farms produce 18 thousand metric tons from 880 hour angle. The supply of veggies for the European market comprises preponderantly green “ bobby ” beans.

There are two private exporters cultivating about 225 hour angle of green beans each with outgrowing agreements with a limited figure of husbandmans in their locality. The current production of green beans relies on surface or furrow irrigation. A joint venture near Koka was the first to do the considerable investing in drip irrigation. Van Oers Import and Ethio-Flora have been granted PSOM part in 2004 to put up the production, processing and wadding of green beans for export to the Netherlands. The province farms have reduced their green goods scope significantly over the past old ages and large balls of its land near Ziway have been leased out for flower gardening or are for sale.

Increasing figure of investings and experiments are undertaken by private companies to bring forth peas, mangetouts, cherry tomatoes and Asparagus officinales for export to the EU market. Agriculturists in Southern Ethiopia have besides successfully started herb production, partially in nurseries. Besides a Dutch agriculturist has already two old ages experience turning a broad scope of veggies of first-class quality in nurseries.


Entire fruit production is about 500 1000 metric tons, of which the State Farms history for about 10 % of production. The chief fruits produced and exported are bananas, citrous fruit, Citrus paradisi, Mangifera indicas, papaia and avocadoes. The chief export markets for these Ethiopian fruits are Djibouti, Saudi Arabia, Yemen and Sudan. The bulk of citrous fruit production is still mostly confined to province farms, but the productiveness of their groves is on the diminution. The production of Mangifera indicas is to a big extent scattered and unprofessional ; the assortments and quality tend to be non every bit good in quality as those produced in viing states and are normally unfit for farther processing. Upper Awash has a plantation of Mangifera indicas, chiefly for export and produces mango seedlings for sale. The company Green Focus allocated 270 hectares for Mangifera indica production in Wollega and programs to cultivate 2,000 hectares more of it in the approaching three old ages and besides plans to construct an agro-processing works. However 500 husbandmans from seven kebeles resettled on the same farming area, holding Green Focus ‘ programs. A national commission was established to look into the instance and come up with a possible solution.

In the Chencha Highlandss apples have been grown for decennaries by little husbandmans. Apple production is expected to travel up as the State of Oromia ordered 70,000 apple tree seedlings from Spain. Pineapple production is scattered and has been unstable over the past old ages, which causes a pineapple drying works near Nazareth to work below its production capacity.

In add-on to the export of comparatively low value fruits, late a figure of tests are undertaken to bring forth more high value harvests for export and to entree new or more attractive fruits markets ( i.e. grapes, alligator pear, passion fruit ) . A foreign strawberry agriculturist ventured into the trickle irrigated production of this fruit in Ethiopia chiefly for the fresh export to the EU market. The Netherlands is now successfully importing strawberries from Ethiopia. The fruits have a high brix degree and are harvested 7 yearss a hebdomad. Table grape production has started around Mojo and programs exist to spread out to countries in the North of the state. Foreign investors have besides come to Ethiopia to get down with alligator pear and passion fruit production and processing, chiefly on former province owned plantations.

3.2.3 Livestock and Fishery

Ethiopia is foremost in Africa and ten percent in the universe for its farm animal population. Harmonizing to Central Statistics Agency ( 2008-2009 ) , the state has 49 million caputs of cowss, 17 million caputs of sheep, 22 million caputs of caprine animals and 38 million poulets.

Ethiopia ‘s potency for piscary development is in its fresh water lakes, reservoirs and rivers. The entire fish gimmick potency from these Waterss is estimated at 40,000 dozenss per twelvemonth. There is besides an chance for investing in the building of aquaculture to bring forth fresh H2O fish for local and international markets.

This sector offers great investing chances. The possible for farm animal and piscaries have non been to the full exploited.

The investing chances in farm animal and piscary are in:

Meat processing ;

Dairy agriculture and milk processing ;

Raising and fattening of sheep, caprine animal, cowss and camel ; and

Fish agriculture and processing.

Recommended Mode of Entry in Agriculture Sector