14 March 2018

Ethiopia: Agro-Processing - Epicenter of Transformation

In its quest to promote commercialization, the government of Ethiopia has been striving to build market oriented agriculture and strengthen the agro-processing sector in hope of producing and exporting value added products; and making the country an ideal place and a player in global commodity value chains.

The Ethiopian case is a clear testimony on how far a committed, developmental state by clearly articulated and contextualized development road map and strategy to set a country on sustained development path. The government's central economic strategy guiding the integrated and comprehensive policies aimed at achieving poverty reduction and broad based economic growth is the Agricultural Development Led Industrialization (ADLI).

However, the growth and development targets Growth and Transformation Plan (GTP) has enabled the country to maintain or exceed an average GDP growth rate of 11 percent and achieve the MDGs targets.

The GTP puts strong emphasis on the development of agro-industry sector, which is based on the comparative advantage that the country has in the agriculture sector. Agro-processing could contribute to achieving the proper balance between agriculture and industry to expedite the much anticipated economic transformation.

Presently, the major Ethiopian export produces include; coffee, livestock products, oilseeds and pulses, fruits and vegetables, flowers, textiles, natural gum, spices and mineral products.

In addition to the current efforts underway to increase the supply and improve the quality of these export commodities, Ethiopia is highly encouraging investments in Agro-processing due to the firm believe that agro-processing is epicenter for the transformation of the Ethiopian economy, said President Dr. Mulatu Teshome at the Second International Agro-processing Industry exhibition.

The President further underlined that Ethiopia has tremendous potential for investment in the agro-processing sector. "Many of our agricultural products are exported without being processed, while it could have been processed before they are supplied to domestic and foreign markets."

Though the government encourages the export of agricultural products, it has placed a priority on the export of processed products, which involves and stimulates the growth of the agro-processing sector. Through the development of agro-processing, Ethiopia's agricultural sector can achieve swift and sustained long-term economic development, according to the President.

The rational for emphasizing the role of agro-industry lies on the high degree of interdependence with forward and backward activities, agro-industry can play a very important role in accelerating the economic development and achieving the goal of industrialization.

Agro-industry parks are built in an integrated manner to address constraints related to land access, infrastructure, trade logistics, customs regulations and skills.

In this regard, the Ethiopian government has strong commitment as demonstrated in the quick operationalization of the Bole Lemi, Eastern Industry Zone, and the state of the art Hawassa, Mekelle, Kombolcha Industrial Parks and those underway, earning the country international acclaim.

At large, the government is committed to transform the economy from agriculture to industry led and support private investors through providing platforms to meet and explore business prospects and enhance partnership opportunities in a nutshell, according to the Minister of Industry Ahmed Abtew.

The forums and platforms that government has been organizing in collaboration with its development partners are believed to have greater role in advancing trade and investment in the agro-processing sector, the Minister added.

The state owned wholesaler, the Merchandise Wholesales & Import Trade Enterprise /MEWIT/ is expected to solve the limitations witnessed in the input side in order to meet the intended level, Yonas adds.

Yahia Sayed Omar Spices Import-Export Company has maintained a good reputation on supplying Ethiopia's agricultural products such as pulses, oil seeds, and natural gum produce to the international market.

The export destinations of these products includes India, Sri Lanka, Saudi Arabia, Egypt, UAE, Turkey, UK, Germany, France, The Netherlands, Japan Singapore, USA, Israel and South Africa among others, Owner and President of the Organization Yahia Sayed Omer told the Ethiopian Herald.

Yahia says that the agro-industry sector in Ethiopia is very much lucrative and untapped. It can generate large number of hard currency to the country and ample employment opportunities to the youth, he added.

The Company is looking forward to enter the agro-processing with a view to ensure that the export of Ethiopian raw commodities should be replaced with high quality processed and semi-processed produces.

The idea of organizing agro-industrial investment forum came about as the government started to take intensive intervention to promote agricultural commercialization by building strong agro-processing sector, the Minister further stated.

The government of Ethiopia and its partners have strong desire to expand the richest sector into continental level and the government will do its level best to make this objective a reality.

Linking potential investors with global value chain

The government of Ethiopia has demonstrated a strong commitment to the agriculture and rural development sectors through allocating more than 10 percent of its total budget. It is also working to increase agricultural production, and productivity thereby enhance sector's economic performance and successfully realize national agricultural policy.

As the result of the collaborative efforts between the government and partners in the past five years and since the Agricultural Development Program project has been launched in 2011, it is enabled to reach over 1.2 million people, create more than 6,000 jobs and generate 181 million USD from farm gate sales, according to sources.

The industry sector is expected to take over the leading role of the Ethiopian economic sector by 2025. To facilitate the transformation process, hence, the Ethiopian Agricultural Transformation Agency (ATA) has been undertaking several activities to modernize the agriculture sector and ensure the industrialization process.

With this same purpose last February, the ATA and Ministry of Trade (MoT) had facilitated Ethiopia's participation in two prominent international trade shows for food and agriculture products, according to ATA.

The Biofach 2018 Exhibition for Organic Foods and Drinks, held in Nuremberg, Germany from 14-18 February 2018 and nearly 2,950 exhibitors took part and 50,000 visitors dropped in, was the exhibition that Ethiopia presented its organic produces and exchange views with visitors and exhibitors.

Meanwhile, Gulfood, the world's largest annual food and beverages trade show held in Dubai, UAE from 18-22 February, and attracted over 5,000 food and beverage professionals from across the globe and 97,000 visitors, was also the other opportunity for Ethiopia.

These trade shows have created a tremendous opportunity for Ethiopia to showcase its exportable food products, acquainted with potential buyers from around the world with a view to familiarize the Ethiopian exporting commodities in the global value chain.

The major commercial commodities exhibited at the trade shows were pulses and oilseeds, spices, honey, coffee, teff, meat and live animals. Close to one hundred Ethiopian exporting companies, including two cooperative federations, have taken part in the two trade shows.

Simultaneously, bilateral discussions were also conducted between government officials, agencies and potential investors. A food counter serving bite-sized portions of classic Ethiopian dishes, catered by 'Gursha Restaurant' in Dubai, allowed visitors to sample the country's cuisine, and in some instances, get their first taste of enjera made of teff. The live traditional coffee ceremony was also one of the Ethiopian pavilion's main attractions.

Moreover, to exhibiting samples of Ethiopian commodities at dedicated booths (accompanied by informative materials on specific commodities and general investment opportunities) one-to-one discussions were held between exporters and buyers in the Ethiopian pavilion.

State Minister of Trade, Ayana Zewdie said on the occasion that "We are increasingly looking to create the exposure Ethiopia needs globally, and such trade shows offer the perfect opportunity. Last year, Ethiopia's sales at Gulfood far exceeded our projected amounts, and we plan to build on this in future years."

In order to ensure the smooth execution of both trade shows, a multi-sectoral technical committee composed of staff from ATA and MoT and other key institutions undertook major marketing and logistical activities. These included booth selection, design, and exhibitor scheduling; identifying and liaising with participants; producing a website and promotional materials; coordinating the activities of the various parties; and briefing participants on how to maximize their effectiveness at the trade shows. Ethiopia's engagement at the trade shows was financed in large part by the ATA and MoT. Other developmental institutions, such as USAID, also contributed funds to the endeavor.

The ATA's Senior Director of Agribusiness & Markets, Mirafe Gebriel Marcos for his part said that Ethiopian commodities are in high demand because of their quality and many of the produces are organic. "In addition to diversifying our export markets, taking part in these trade shows helps Ethiopia to attract potential investors to engage in agro-processing and value addition."

The involvement of the Ministry of Foreign Affairs, the Ethiopian Consulates in Frankfurt and Dubai and the Ethiopian Pulses, Oilseeds, and Spices Producers and Exporters Association (EPOSPEA), was pivotal in the success of both trade shows.

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