Ethiopia, located in the Horn of Africa, is one of the most populous landlocked countries in the world with 92 million inhabitants. Its economy is characterised by an agricultural orientation, with approximately 80% of Ethiopians working in agribusiness and related industries and 46% of the national GDP stemming from the agricultural sector. It is no wonder that this sector is the main driver of the Ethiopian economy. The agricultural industry can not only take advantage of an enormous domestic market, its sheer size can offer competitive advantages in exporting agricultural products.
The current government strategy strives for agricultural transformation through increased efficiency and more value-added production. Accompanied by an increase in public investment, it has proven successful. Over the past few years Ethiopia has achieved high economic growth (GDP annual growth rate of 10.9%, according to the World Bank) and it is expected that especially agribusiness will provide interesting national and international business opportunities. The most important agribusiness sectors in Ethiopia are horticulture, dairy, seeds and sesame, with other promising sectors being poultry, potatoes, spices and aquaculture.
However, despite the recent growth and economic development Ethiopia remains a low income country, with 29% of the population living below the poverty line. The previous paragraphs notwithstanding, Ethiopia is often equated with food insecurity, as market inefficiencies often cause discrepancies between supply and (national) demand. In order to correct these inefficiencies and contribute to increasing food security, the Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) and the Embassy of the Kingdom of the Netherlands have established the Agribusiness Support Facility (ABSF). The main objectives of the ABSF include attracting foreign direct investment in the agribusiness sector, increasing the number of domestic companies and providing hands-on business support services.
Ethiopia and the Netherlands maintain a close relationship, demonstrated by the financial and technical support by the Dutch Embassy for the ABSF. This close relationship is strengthened by the strong complementarity between Dutch agribusinesses and their Ethiopian counterparts. To accommodate further and deeper collaboration, the ABSF facilitates Dutch agricultural companies in setting up new business, joint ventures or expanding existing business in Ethiopia. This includes providing the necessary information on topics such as tax and revenues, investment licenses, land lease and logistics. ABSF also organizes subsector (poultry, dairy, soy and spices) platform meetings to connect both Dutch and Ethiopian chain actors and chain enablers, in order to help develop these sectors.
The ABSF offers several opportunities for Dutch companies to get in touch with the Ethiopian agricultural sector, for example via matchmaking sessions during incoming trade missions or while joining a trade mission to Ethiopia. NABC has and will organise a number of these missions, putting its decades of experience in connecting Dutch and African businesses at the disposal of the ABSF.
Soy trade mission to the Netherlands: 26 until 31 January 2014
The goal of the trade mission was to introduce Ethiopian stakeholders to the Dutch soy sector and it served as a first step towards further cooperation between Dutch and Ethiopian businesses active in this industry. Participants included soy producers and processors for food and feed. Their expectations included seeing state-of-the-art technologies, expanding their network, exchanging knowledge and getting advice on business management. To this end, the delegation visited companies like SGS Nederland, Tradin Organic, ABZ and De Kruijf. The Ministry of Economic Affairs, Solidaridad, GMP+, DIBcoop and AAA gave presentations during the trade mission on import and export regulations, sustainable soy production and quality standards. The mission proved very successful and new linkages through several Dutch-African agri-platforms were established.