By: Yinebeb Bahru
Agriculture is the backbone sector in Ethiopia’s economy due to its significant contributions to GDP growth, employment opportunities for a majority of citizens and substantial export earnings through key commodities like coffee and sesame seeds. The government’s unwavering commitment to promoting agricultural development through various initiatives underscores its recognition of this sector’s vital role in sustaining economic prosperity for the nation.
Agricultural sector contribute to over 40% of the country’s GDP. Additionally, it serves as the primary source of employment for more than 80% of the Ethiopia’s workforce and accounts for a significant 83.9% of exports. The leading agricultural commodities in Ethiopia include coffee, sesame seeds, and pulses.
The agricultural sector in Ethiopia showcases remarkable diversity, with a wide variety of crops and livestock being cultivated. Among the crops, cereals such as teff (ጤፍ), wheat, and maize are the major ones. Following closely are pulses, oilseeds, and fruits. Livestock also plays a crucial role in providing sustenance and income for the population, with cattle, sheep, goats, and poultry being prominent sources.
Ethiopia boasts a rich history of agricultural production that has garnered continuous attention from the government over the years. To foster agricultural development further, numerous policies and programs have been implemented by the government. These initiatives encompass land reform measures, irrigation projects to enhance water management systems, as well as agricultural extension services aimed at providing farmers with valuable knowledge and support.
The Ethiopian agricultural landscape confronts obstacles like periodic droughts, soil degradation, taxation burdens, and inadequate infrastructure. These elements contribute to reduced productivity, food insecurity and poverty. To counter these concerns, the government has pinpointed priority areas for intervention, targeting increased smallholder farm productivity and large-scale commercial farm expansion. Strategies include enhancing input access, credit availability, market reach, irrigation facilities, extension services, and land tenure security.
Agriculture’s role extends beyond sustenance, propelling Ethiopia’s economic transformation. The Oxford Handbook of the Ethiopian Economy highlights the Agricultural Development-Industrialization (ADLI) approach as Ethiopia’s primary developmental strategy. By amplifying agricultural output and income, the rural sector stimulates demand and supply for urban and industrial counterparts, fostering growth and structural change. Yet, critics note ADLI’s limitations, emphasizing the need to facilitate urban and international demand for high-value crops and value-added products.
Amid these dynamics, promising signals emerge. Over the past decade, the sector has achieved a consistent 5% annual growth rate, accompanied by improved productivity. Notably, the government and international donors have bolstered efforts. BIC Ethiopia represents a particularly promising development.
BIC Ethiopia is a project that aims to support business incubators in Ethiopia, especially in the fields of agri-tech and agri-business. The project is funded by the European Union and implemented by a consortium of six partner organizations, led by Sequa, a German based non-profit organisation that promotes development cooperation. The project started in January 2022 and will run for four years. The main objectives of the project are:
- To enable existing and new incubators to support high potential start-ups with innovative business models that address market needs and potentials in terms of job creation and income generation.
- Additionally, to enhance business incubators’ ability to unlock the potential of agri-tech and agri-business by delivering necessary tools to enable business growth along different stages of maturity.
The project strengthens incubators and start-up’s innovating in agri-tech and agri-business. BIC Ethiopia will provide critical tools and resources to unlock the potential of these ventures to create jobs, incomes and sustainable growth.
The R&D Group Ethiopia office collaborates closely with Sequas in this endeavour to implement the starter and catalyzer programmes, bringing essential experience. By fostering this ecosystem, BIC Ethiopia can help revitalize and advance Ethiopia’s agricultural industry. The collaborations present a promising path to revitalizing Ethiopia’s agricultural sector, offering valuable insights and avenues for sustainable growth.
Yinebeb Bahru is a Training Associate for the Dutch-based consulting firm R&D Group Ethiopia office. He is passionate about technology, start-up’s, innovation, finance, writing analysis, political economics, research & development. The writer can be reached at: Yinebeb251@gmail.com.