For years, one of Africa’s biggest economies has run under the radar. But no longer is it going to sit on the sidelines. The buzz is real. The opportunity is real.” runs a testimony by Kurt Davis (2014) who has traveled to over 70 countries in search of new investment opportunities. In Ethiopia, he finds agribusiness to be one of the top.

Indeed the agribusiness industry of Ethiopia offers huge opportunities and potentials in a range of well-developed world class export sectors such as cereals, pulses, horticulture, spices, floriculture, and livestock. The country is the largest producer and exporter in the African continent of many globally highly traded products such as coffee, sesame, oilseeds like noug and linseed, cut flowers, aromatic gums, and livestock products and by-products.

Davis (2014) alerts “Livestock, fish, and poultry present the greatest space for growth”. The booming industries such as dairy and poultry could be greatly improved to satisfy the huge unmet domestic consumer demands despite rising prices whereas fishing is a virtually untouched industry that is also in need of commercial investors.

Key Reasons to Invest in Ethiopia Agribusiness

  1. Lead Sector of a Growing Economy
    • Ethiopia is one of the fastest growing non-oil dependent countries in Africa at an average rate of 10% since 2010. Agriculture is the mainstay of this growing economy. It accounts for more than 50 percent of the GDP and employs over 80 percent of the workforce.
    • Agriculture is a priority industry of the Growth and Transformation Plan of the Government of Ethiopia that envisions for “…building an economy which has a modern and productive agricultural sector with enhanced technology and an industrial sector that plays a leading role in the economy, sustaining economic development and securing social justice and increasing per-capital income of the citizens so as to reach the level of those in middle-income countries” (GTP 2010).
  1. Vast land, huge geographical diversity and natural resources base
    • Ethiopia’s vast land, favorable climate, and water and land resources combined make the country an incredible hub for agribusiness investment.
    • Nearly half (45% or 74.3 million ha) of the total land mass of Ethiopia is suitable for agriculture. Only 18 million ha of this is currently cultivated, implying the availability of vast land for agriculture.
    • Ethiopia’s huge topographic and ecological diversity begets it to be ideal for agriculture. With altitudes ranging from 148 meters below and 4,620 above sea levels, the east African nation has 19 major and 49 sub agro-ecological zones, each having its own agricultural and biological potentials and resources suitable for farming and related agribusiness activities.
    • Altitudes between 500 m (normally warm) and 2600 m (cool nights and mild day temperatures), and all altitudes in between, are common. This together with ample possibilities for irrigation makes it possible that a large variety of crops can be grown.
    • The hot lowlands are suitable for crops like sugarcane, palm oil, maize, cotton and sesame. On the higher altitudes crops like coffee, tea, teff and roses can be grown and on even higher altitudes wheat, barley and linseed. The variation in climate also makes it possible to grow all types of fruits, vegetables and flowers.
    • The climate is suitable for growing over 147 crops.
    • Ethiopia has the largest livestock population: 52 million cattle, 45 million chickens, 24 million sheep, 22 million goats, 4 million donkeys, 2 million horses, 1 million camels, and 0.4 million mules (Comelissen et al. 2012)
  1. Strategic geographic location and regional hub with wide market access
    • Ethiopia is geographically well-positioned to serve several export markets. Strategically located in the East and Horn of Africa, Ethiopia is at the crossroads between Africa, the Middle East and Europe. Within easy reach of the Horn’s major ports, Ethiopia is close to its traditional markets for export products — the Middle East and Europe. This geographical proximity provides the major exporters in the world unparalleled access to the Ethiopian agricultural and food market.
    • Ethiopia is the second most populous nation in Africa providing access to its close to 90 million inhabitants.
    • It is also a member of the Common Market for Eastern and Southern Africa (COMESA) providing preferential access to over 400 million people in 19 member countries.
    • As an export platform, Ethiopia also provides duty-free, quota-free access to the U.S. market under the African Growth and Opportunities Act (AGOA), the EU market under the Everything But Arms (EBA) initiative, China, India and Korea.
    • The Ethiopia capita Addis Ababa is a regional hub and the third UN hub next to New York and Geneva. It is home to key international organizations such as the African Union (AU) and the United Nations Economic Commission for Africa (UNECA) and many others.
    • The capital is also the main air hub for Africa and the home of the popular Ethiopian Airlines, widely reputed as the best airline in Africa. Ethiopian provides preferential price to investors who wish to use its services to 17 domestic destinations and flights to 80 international destinations. In total, it carries two thirds of Africa’s air freight (EIC 2014).


  1. Potential labor supply at affordable cost
    • According to the World Bank’s Doing Business Report for 2014, Ethiopia has the second largest labor force in Africa (over 43 million workers)
    • Ethiopia’s minimum wage is among the lowest in Africa, with only 5 countries – Burundi, Uganda, Egypt, Gambia and Malawi – having lower minimum wages (International Labor Organization, 2010/11).
    • The cost of labor is very affordable. Private sector monthly salaries for university graduates range from USD 150 to USD 200, while construction sector monthly wages range from USD 60 for daily laborers to USD 300 for a foreman (Ethiopia’s Ministry of Urban Development and Construction cited in EIC 2014).


  1. Steadily Improving Economic Infrastructure
    • Power. Ethiopia has the second largest hydropower potential in Africa (Deloitte, 2014). Power production is in steady increase over the previous decade, with 99% sourced from clean energy in the form of hydropower. The country’s installed electricity generating capacity is expected to reach 10,000 MW by mid-2015.
    • Telecommunications. There is fairly good telecom infrastructure in favor of investors. Ethio Telecom is currently engaged in a major transformation work of Next Generation Network (NGN) projects to create a world class telecom service provider (
    • Railway. A 5,000 km-long railway network is currently under construction. The network is expected to reach every corner of the country. As a first priority, it will connect Addis Ababa to Djibouti’s main port, further improving the export-import shipping logistics.



  1. Competitive investment incentive packages and benefits


Increasingly competitive legal framework for investment


  • The policy for Ethiopian investment has been modified in the last 22 years for more than 4 times in favor of the investors in agribusiness, among other industries
  • Foreign investors can invest directly by themselves or in partnership with domestic investors in areas open for foreign direct investment
  • No restrictions on equity ownership in joint venture (JV) investment


Incentives – Regulatory

  • Guarantee against expropriation or nationalization (Constitution & Investment Law, MIGA & BITs)
  • Full repatriation of profits, dividends, principal and interest payments on external loans out of Ethiopia in convertible currency
  • The right to employ expatriate experts and management staff
  • Bilateral Investment Promotion & Protection Treaties with 27 countries, including Turkey
  • Double taxation avoidance treaties with 18 countries


Fiscal Incentives


  • Customs duty exemption on imported capital goods, construction materials, and spare parts worth up to 15% of the value of imported capital goods
  • Income tax exemption of 2 to 8 years for manufacturing or agroprocessing and agricultural investments;
  • Carry forward of losses for half of the tax holiday period;
    • Several export incentives, including the Duty Draw-Back, Voucher, Bonded Factory and Manufacturing Warehouse, and Export Credit Guarantee schemes.
    • The incentive policy does not discriminate between domestic and foreign investors,
    • Ethiopia has access to USA Market through AGOA and EU member countries through Everything but Arms agreement where in both USA and EU the country can export on cotta and tax free basis.



Other incentives and advantages


  • The Government of Ethiopia gives priority to export agriculture and gives attractive incentive packages which includes, amongst others, a tax holiday and favorable financing possibilities and active assistance for obtaining land.
  • Land can be leased for commercial investment on long term basis at very favorable conditions,
  • The peace stability and personal safety in Ethiopia and the fact that government offices work according to procedures, implying a relatively low level of corruption compared to many other African countries.
  • The government guarantees the remittance of profit, dividends, principals and interest payments on external loans. A foreign investor or employee of a company has the right to make remittances out of Ethiopia in convertible foreign currency at the prevailing rate of exchange.
  • The provision of land at competitive lease prices.
  • Private property is protected by the constitution and the investment law of Ethiopia.
  • Ethiopia is a member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank affiliate which issues guarantee against non-commercial risks in signatory countries, and of the World Intellectual Property Organization (WIPO).
  • Ethiopia has concluded 30 bilateral investment promotion and protection agreements, of which 11 are with individual European Union Member States. Significant other partners include China, India, South Africa, and Russia, and a number of regional economic partners (Israel, Egypt, and Sudan, among others).

Business Opportunities


According to EIC (2014) there are plenty of possible priority areas for investment in agribusiness.


  1. Food crops
    • Cereals and pulses
    • Oil crops
  1. Beverage crops
    1.  Coffee
      • Large-scale commercial coffee production
      • Coffee roasting, grinding, and packing for international market


    2.  Tea
      • Large scale commercial tea plantation
      • Modern tea blending and packing industries
  1. Horticulture
    • Fruits and vegetables
    • Herbs
    • Cut flowers
  1. Cotton
    • Commercial production (3 million hectares of suitable land)
  1. Sugar
    • Sugar cane plantation and sugar processing
  1. Rubber and palm tree plantation
    • Ethiopia has the potential for large scale rubber and palm tree plantation
  1. Biofuel production
    1. Feed stocks for biodiesel: jatropha, palm oil, caster oil, etc.
    2. Feed stocks for ethanol: sugar cane, sugar beet, potatoes, corn, etc
  1. Spices
  1. Livestock
    • Possible areas include:
      • Livestock farming
      • Meat processing
      • Livestock feed processing
    • In Ethiopia there are:
      • 88 million heads of cattle
      • 98 million heads of sheep
      • 80 million heads of goats
      • 05 million poultr
  2. Apiculture
    • With about 10 million bee colonies and over 100 honey source plants, Ethiopia is the leading honey and bees wax producer in Africa.
  3. Aquaculture
    • The total fish catch potential from fresh waters in Ethiopia from current sources is estimated at 40,000 tons per year.
    • There is opportunity for investment in construction of aquaculture to produce fresh water fish for local and international markets
  4. Forestry and related activities


  • Processing of fruits and vegetables
  • Processing of meat products
  • Integrated production and processing of fish and fish products
  • Integrated dairy farm or processing of dairy products
  • Processing of crude and refined edible oil
  • Processing of starch, cornflakes and edible oil from maize
  • Processing of spices
  • Manufacturing of baby food, roasted and ground coffee, soluble coffee, tea, yeast, vinegar, mayonnaise, artificial honey and similar products
  • Manufacturing of spaghetti, macaroni and other products
  • Brewing and wine making
  • Sugar and sugar related products

Key agricultural manufacturing industries for investment in food and beverage (Hunegnaw 2014)

  • Baby food: demand 59,289 tons. Sorghum, wheat, soya beans, chick peas, sweet potato, fruit and milk are locally available or can be produced.
  • Biscuits: demand 1.2 million tones. The required inputs such as wheat flour, sugar, salt, sweet jelly, glucose, and starch are available locally and they can also be imported.
  • Marmalade: demand 780 tones. The input fruit and sugar is available and citric acid can be imported.
  • Lemonade: demand 440,000 hectoliters.
  • Macaroni and pasta: demand 56,603 tones.
  • Margarine: demand 1,092 tones.
  • Milk powder: demand 2,136 tones.
  • Packed Juice and Syrup: 13,230 tones.
  • Tomato Sauce and Ketchup: demand 12,481 tones.
  • Vinegar: demand 105,754 litters.
  • Grounded and Packed Coffee: 2,712 tones but the export is more, input raw coffee is available locally.
  • High Potential for meat Industry Animal feed including poultry:- demand 3.7 million tons. Oil cake, molasses, bone meal, maize, salt and lime are available or can be produced locally.

Government priority sectors with backward linkages to agriculture

  • Production of textile fabrics
  • Production of garments
  • Production of other textile products (carpets, curtains, etc.)
  • Tanning of hides and skins up to finished level
  • Leather goods and articles (shoes, garments, etc.)

Business Support

The Dutch-funded Agribusiness Support Facility (ABSF) project hosted at Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) provides a range of support for agribusinesses. The project has an Information and Services Hub that strives to support soybean and other agribusiness companies with information and services on how to start and run a business in Ethiopia through its front office located in AACCSA’s office complex and online at its web portal available at

ABSF also support the establishment and operation of agribusiness Subsector Stakeholders Platforms with the aim of bringing together chain actors and chain enablers such as government institutions that provide business development support services to discuss on business opportunities and challenges and do business. Currently four subsectors are supported through this facility:

  1. Soybean which was established in 2011 with the support of a previous Dutch funded project on soybean value chain development,
  2. Poultry, launched on May 16, 2013 in Addis Ababa by five important stakeholders in the Ethiopian poultry sector(the Ethiopian Poultry Producers Association, the Holland-Africa Poultry Partners, the Ministry of Agriculture, the Addis Ababa Chamber of Commerce and the Netherlands Embassy).
  3. Spices, herbs and aromatics
  4. Potato

Since July 20013, ABSF has been organizing the Subsector Stakeholders Platform meetings held regularly on quarterly basis. The meetings help to keep new and existing entrepreneurs abreast of new development and investment opportunities in the specific agribusiness sectors/subsectors of Ethiopia while serving as a networking mechanism to do business. Key sub-sector wide issues and challenges raised during the meeting are further taken to be addressed through studies and other appropriate measures as capacity and resources allow.

Another key activity and support provided by ABSF is Advanced Business Plan Development Training Program for start-up fledging entrepreneurs in the different agribusiness subsectors. New university graduates who are granted undergraduate or postgraduate degrees in relevant fields and wish to pursue professional career in soybean can benefit from the Technical and Entrepreneurial Support programs provided by ABSF.

For instance, by participating in the post study four-month paid Internship Program, the first and only of its kind in the country, the graduates can be posted at soybean commercial farm establishments or soybean processing factories to gain practical skills and works experience while also developing entrepreneurial spirits and knowledge through real exposure and pre-in-service trainings by ABSF. Those who wish to start their own business in soybean production or processing can do so by partaking in post study Business Plan Competition Program of ABSF.

The project also has a facility to support private sector associations through a competitive fund grant of up to 400,000 birr for project proposals to build their capacities. This allows the awardees to professionalize their services to member and non-member agribusinesses and undertake sector-wide activities such as problem solving studies or trainings for agribusinesses.

ABSF also provides international B2B support services in selected agribusiness industry sectors/subsectors. These are aimed at enhancing export-import trade between Ethiopia and the Netherlands and EU. To that end, the project organizes international trade missions from/to Ethiopia to create B2B linkages for trade and joint investment.

How to Invest

Investors who wish to start and operate an agribusiness in Ethiopia need to fulfil legal and procedural requirements to establish and operate an investing business entity in Ethiopia. Consult our general quick guides in the Doing Business section of this website on how to start and run an agribusiness company that will invest in the aquaculture subsector.

Notes for Readers

This article is prepared by Amare Molla, Information Hub Coordinator for ABSF, and as such does not reflect the views and opinions of the institutions involved in funding or managing the website. The article is written with utmost care referring available and reliable information sources on the agribusiness sector profile and business opportunities that exist in the sector. It is also thoroughly reviewed by Gertjan Becx, the ABSF project coordinator, and other experts of the project. Despite that, readers are advised to check the accuracy of the information as facts and figures may change with changes in the development of the agribusiness sector.


  • Comelissen, Jessica; Vernooij, Adriaan;Giani, Alberto; and Duns, Hilde. 20012. Poultry production in Ethiopia. In: Poultry in Ethiopia: a survey of production, value chain and marketing of commercial poultry in Ethiopia. HAPP (Holland-Africa Poultry Partners).
  • Davis, Kurt Jr. 2014. Top five opportunities for investment in Ethiopia. Accessed on December 01, 2014.
  • Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA). 2013. Investment Guide of Ethiopia. ECCSA, Addis Ababa, Ethiopia.
  • Ethiopian Investment Agency (EIA) and Embassy of the Kingdom of the Royal Netherlands. 2008. Agricultural Investment in Ethiopia: a Guide for New Investors. EIA, Addis Ababa.
  • Ethiopian Investment Commission (EIC). 2014. Invest in Ethiopia. EIC, Addis Ababa. Acccessed on November 26, 2014.
  • Ethiopian Investment Commission (EIC). 2014. Investment brochure 2014. Accessed on November 26, 2014.
  • Hunegnaw Abebaw. October 2014. Manufacturing Industry Investment opportunities In Ethiopia. Paper presented at the Third Spices, Herbs and Aromatics Subsector stakeholders platform meeting held on October 28, 2014 in Addis Ababa.
  • Ministry of Finance and Economic Development (Ethiopia). November 2010. Growth and Transformation Plan, 2010/11-2015. Volume I. Accessed on November 27, 2014.