7 December 2017

Ethiopia: Pulses, Oil Seeds and Spices - Diversifying Ethiopia's Forex Sources

Ethiopia, after decades of socioeconomic and political reformations has become exemplary in terms of sustainable development and economic growth in Africa. The nation is now among the fastest growing nonoil dependent economies in the continent.

As it kept moving on the track of sustainable economic growth, the nation is attracting foreign investment from around the globe in different sectors. The sustainable peace and stability as well as the enabling investment policy have attracted investment that supports the country's forex earnings.

Currently, the country is endowed with untapped and immense investment opportunities in the areas of agriculture with favorable climate, which is suitable for the production of varieties of pulses and oilseeds, compounded with considerable quality products that would meet the standards of international markets, said President Dr. Mulatu Teshome at the opening ceremony of the seventh International Conference on Pulses and Oilseeds held here recently.

President of Ethiopian Pulses Oilseeds and Spices Processors and Exporters Association, Haile Berhe also said the sector has earned 472.2 and 343.3 million USD during the first and second Growth and Transformation Plan periods (GTPI & II) respectively. This nearly accounts 24 percent of the nation's forex earnings. Even though this is a great achievement, there are gaps in meeting the plan set in GTPII. This is due to the slow down of the global economy, the fall in the international price of spices, and unfavorable rainfall. But the sector has been and can still contribute to the overall economic development of the country, he noted.

Currently, Ethiopia is exporting its pulses and oilseeds to more than fifty-five countries around the world, according to him.

Minister of Trade, Dr. Bekele Bulado for his part said the core of the agricultural development strategy is indicated on the rapid and sustained increase in land and labor productivity as well as commercialization of small scale agriculture so that smallholder farmers could have market based opportunities to lift themselves to prosperity.

Thus, efforts will be made to strengthening rural capacity through extension services, training, research and investment. The government is committed to expand heavy infrastructural services such as roads to facilitate commercialization of agriculture. It is also constructing schools to substantially upgrade the human resource in agriculture and electricity to enhance agro-processing.

The Minister also said that the country is trying to establish an efficient marketing system. "Our nation is very keen in attracting investments that can link our smallholder farmers to predictable and guaranteed output markets and local and global supply chains. In this regard, we believe highly profitable opportunities exist in Ethiopia. So, we are ready to engage with partners who are interested in agro-processing and to unlock markets in this sector," he added.

On GTPII, the country has targets to increase production, productivity and improve quality as much as possible.

Brihanu Amsalu, coordinator at Ethiopian Agricultural Research Institute of Melcasa Center, told The Ethiopian Herald that the main concern is conducting demand based research. "We gather information from such International conferences about what type, color and volume of pulses, oilseeds and spices that exporters need. Thus, we provide improved seeds for farmers. But that doesn't mean there is no problem in production and productivity."

The first major reason for this problem is pests that affect pulse and oil seeds. "Therefore, in order to reduce this, we intensify efforts to reproduce pest-resistant seeds. In addition, it is mandatory to provide more improved seeds in terms of productivity and quality, which is also one of our major area of focus," said Brihanu.

He also stressed that the main factor that is posing challenge in securing quality is awareness gap. There are also arguments that the market at local level doesn't provide a fair price based on product quality. This could affect the farmers' in terms of quality and productivity. Thus, much effort should be exerted in improving the exchange system based on product quality and fair price, according to Brhanu.

Biniam Bedewi is owner and manager of Zablone Trading, which is one of the well-recognized export companies who have contributed highest forex earnings this year. It has contributed close to eighteen million USD from its exports. He said that the company started by exporting two commodities and now has improved the variety to twelve. It has also expanded its export destinations.

Even though, the government is providing incentives in terms of loans and tax, the company is not engaged in value addition. "We have been planning to participate in value addition for more than five or six years. But due to the inefficient logistics system in the country, we haven't been able to engage in value addition. Meanwhile, there is a hope that we could involve in value addition when the Addis Ababa- Djibouti railway goes fully operational," he noted.

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