Agriculture is the backbone of the economy, providing employment to 85 percent of the population. The sector contributes about half of
the GDP and three-fourths of total exports, with coffee alone accounting for up to 65 percent of total exports. Furthermore, agriculture plays a crucial role in providing raw material inputs for industry.
Ethiopia is
endowed with wide-ranging agro-ecological zones and diversified resources. Nearly all types of cereals, fiber crops, oil seeds, coffee, tea, fruits and vegetables are grown. The potential for irrigated agriculture is
estimated at 3.5 million ha.
Ethiopia has the largest livestock resources in Africa. Fishery and forestry resources are also significant.
Considerable opportunities exist for new private investment in the production
and processing of the above agricultural crops and resources.
Food Crops
The major food crops grown include teff, wheat, barley, sorghum, maize, beans, peas, lentils,
soybeans, chickpeas, etc.. In 1993 Ethiopia managed to produce only 7.8 million tons of these food crops on about 5.2 million hectares of land. This is far short of the country's needs for these
crops, and great
opportunities exist for commercial production and processing of food crops. Some pulses can also be produced or processed for the export market.
Oil crops such as rape seed, linseed, groundnuts, sunflower, niger seed
and cotton seed serve as raw material inputs for the edible oil industry. Some oilseeds, including sesame, are important export crops. Favorable agro-climatic conditions also exist in the south western parts of the
country for introducing coconut for the production and processing of palm oil and ghee.
Beverage Crops
Coffee remains the single most important export cash crop, with over
400 thousand hectares under cultivation. The volume of coffee export has steadily increased from 58 thousand tons in 1990/91 to just over 100 thousand tons in 1995/96. The potential for private production and processing
of coffee is significant.
Diversification into tea production and processing, which began with 3 tons in 1974, had reached 3,657 tons in 1993. The favorable agro-climatic conditions existing in the south western parts
of the country offer excellent opportunities for the production and processing of tea, especially for export.
Cotton and Sugar
These crops hold significant opportunities for
export. Existing textile industries demand approximately 50,000 tons of lint cotton annually. However, only a portion of this demand is met from domestic production, with the remaining need being met through import. In
addition, there are good prospects for exporting lint. Therefore, opportunities for production and processing of cotton in Ethiopia are significant.
Considerable opportunities also exist for the production of sugar
for the domestic as well as the export market, especially in view of acute domestic shortages.
Horticulture
Ethiopia is endowed with agro-climatic conditions that are
suitable for the production of a broad range of fruits and vegetables, including temperate, tropical and sub-tropical crops. Horticultural crops currently being produced include citrus, banana, mango, papaya, avocado,
guava, grapes, pineapple, passion fruit, apples, potatoes, cabbages, cauliflower, okra, egg plant, tomato, celery, cucumbers, pepper, onion, asparagus, water melon, sweet melon, carrots, green beans and cut flowers. The
largest citrus plantation in East Africa is found in Ethiopia. Cut flower production is a fast growing export business with about 26 thousand tons of flowers and vegetables exported in the 1993/94 production year. The
agro-processing of fruits and vegetables can be vertically integrated with production. There are already some integrated agro-industrial processing plants run by a state enterprise. The horticulture sub-sector in
general holds great potential for private investment.
Livestock
Despite the large livestock resources of the country, which include 32 million cattle and 42 million sheep and
goats, the contribution of the sector to the national economy leaves much to be desired. In view of the traditional methods of animal husbandry, the current output per unit of domestic breed of livestock is low.
Therefore, investment opportunities are potentially attractive in the areas of modern commercial livestock breeding, production and processing of meat, milk and eggs.
New investment areas of potential significance are
also available in ostritch, civet cat and crocodile farming.
Fishery
Opportunities exist for fresh water fish production and processing using artificial ponds. In addition,
the country's fresh water bodies have an estimated annual fish production potential of 53 thousand tons, of which less than ten percent is presently being exploited.
Forestry and Apiculture
An estimated 3.5 million hectares of natural forest presently remains in 58 areas designated as National Forest Priority Areas (NFPA). Of these, 13 are managed under integrated forest
management systems, with about 80,000 hectares of industrial forest having been established for limited sustainable exploitation. Investors are welcome to invest in integrated commercial production of structural timber,
pulpwood, match wood or even fuel wood. Production of rubber and natural gum also offers exciting opportunities for private investment.
Possessing some seven million bee colonies, Ethiopia happens to be the leading
honey and bee wax producing and exporting nation in Africa, and provides excellent prospects for private investment in apiculture.
Agricultural Services
Considerable scope exists for investment in the
provision of agricultural support services such as pest and disease control, technical consultancy, agricultural machinery, cold storage, transport and marketing services.
Manufacturing
The manufacturing
sector is at an early stage of development, currently accounting for about 11 percent of GDP and 9.5 percent of employment. There are about 130 state-owned and 7,000 private manufacturing industries of all sizes, mainly
engaged in the production of food, beverages, tobacco, textile, leather and foot wear, paper, metallic and non-metallic mineral products, cement and chemicals.
Ethiopia's industrial policy is based on Agricultural
Development Led Industrialization (ADLI) strategy, whose main objective is the gradual structural transformation of the economy from agricultural to industrial development using the country's human and natural resources.
Major manufacturing opportunities offering attractive potential benefits to prospective investors are hereby outlined in the food and beverage, leather and textile, chemical and paper, electrical and electronic,
building materials, and non-metallic mineral and metallic industrial sub-sectors. Nearly all of these investment opportunities are based upon the needs and/or resources of the country.
Food and Beverages :
Processing and preserving of meat products; integrated production, processing and preserving of fish and fish products; processing and preserving of fruits and vegetables; integrated production and processing of
dairy products; manufacture of starch and starch products; processing of animal feed; manufacture of sugar; manufacture of brewery, mineral water, winery, soft drinks, etc.
Tannery and Leather Goods and Articles
: Integrated tanning up to finishing; manufacture of luggages, handbags, saddler, harness, footwear and garment.
Textile: preparation and spinning of textile fibers, weaving of textile fabrics,
and made-up textile articles.
Glass and Ceramics: table ware and sanitary ware, sheet glass, and manufacturing of containers based on raw materials.
Chemicals and Chemical Products: manufacture of
basic chemicals based on local raw materials, including PVC granules from ethyl alcohol, formal dehyde from methanol, manufacture of caustic soda and chlorine based chemicals, carbon black; activated carbon;
precipitated calcium carbonate; textile dyes; ball-point ink; and tallow for soap.
Drugs and Pharmaceuticals: Manufacture of pharmaceutical, medicinal, chemical and botanical products in the form of tablets,
capsules, syrups and injectables.
Paper and Paper Products: pulp from indigenous raw materials, paper and paper products.
Plastic Products: high pressure pipes, pipe fittings, shower hoods, wash
basins, insulating fittings, lighting fittings, office and school supplies and fittings for furniture.
Building Materials: manufacture of cement, lime, gypsum, marble, granite, limestone, ceramics, roofing
tiles, corrugated sheets, tubes, pipes and fittings.
Electrical and Electronic Products: Manufacture of office, accounting and computing machinery; manufacture of electric motors, generators, transformers,
capacitors, resistors, switch gears, electrical fittings and integrated circuit boards; manufacture of radio, television, VCRs, printers, floppy disc drives, communication and other equipment and apparatus for the
domestic and export market.
Metallurgy: manufacture of basic iron and steel; operation of blast furnaces, steel converters, rolling and finishing mills.
Structural Metal Products: manufacture of metal
structures, fabricated steel structures, bridges, towers and recycling of metal and non-metal waste and scrap.
Machinery and Equipment: assembly and manufacture of agricultural machinery and equipment,
industrial, transport and mining machinery and parts, construction machinery, machine tools and accessories, miscellaneous light engineering products, components and parts.
Mining
Ethiopia offers very good prospects for mineral prospecting and development. According to the Ministry of Mines and Energy, "Ethiopia's green stone belts offer one of the finest prospects for gold
mineralization anywhere in the world", and already more than 500 metric tons of gold deposits have been identified by Government exploration efforts. Additional gold reserves are expected to be identified in at
least seven regions of the country. In addition to gold, Ethiopia is blessed with good prospects for tantalum, platinum, nickel, potash and soda ash. Included in the construction and industrial minerals are marble,
granite, limestone, clay, gypsum, gemstone, iron ore, coal, copper, silica, diatomite, bentonite, etc. With regard to fossil energy resources, there are significant opportunities for oil and natural gas in the four
major sedimentary basins of the country, namely the Ogaden, the Gambella, the Blue Nile and Southern Rift Valley.
The details of the mineral resources of the country have been published by the Ministry of Mines and
Energy in a two volume prospectus. (Fax: 251-1-614574 / 251-1-515788)
Tourism
Given its unique cultural heritage, magnificent scenery, pleasant climate, rich flora and
fauna, important archaeological sites and friendly and hospitable people, Ethiopia has the potential to be one of the leading tourist destinations in Africa.
The highlands of Ethiopia have an attractive landscape,
scenery and wildlife. In the African Rift valley system, a wide variety of wild life and numerous bird species, both endemic and common, are found and a substantial volume of traffic is directed to this area. The
magnificent Tis Issat falls on the Abay River, the endemic wild life in Semien mountains, the Sof Omar grottos in the South-East are some of the interesting sites in the country.
The rock-hewn churches at Lalibela,
the ancient buildings of Yeha, the ancient obelisks at Axum, the medieval palaces at Gondar and the monasteries of Lake Tana, Debre Damo and Debre Libanos are important tourist attractions.
Despite the enormous
potential, the tourism industry has not developed sufficiently to make significant contributions to the economy. Nevertheless, the more enabling environment of recent years has resulted in a steady increase in tourist
arrivals that reached 120 thousand in 1995/96.
The available tourism infrastructure is, however, inadequate to cope with the growing tourist traffic. Hence, great opportunities exist for private investment in hotels,
lodges and international restaurants.
Service
Opportunities exist for private investment in the following services:
exporting the country's various products by way of undertaking market promotion, quality improvement or packaging;
construction, comprising first grade contracting and rental of construction machinery as well
as real estate development;
social services, such as health, and education and sports facilities;
other projects in these sectors to be identified by potential investors.
