Sectors - Agriculture

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Agriculture is the backbone of the Ethiopian economy. Over 85% of the population is engaged in it, mostly in subsistence farming. The sector contributes about half of the GDP and three-fourths of total exports. Ethiopia's vast and untapped agricultural potential can be fully unleashed with continued privatization in the agricultural and transportation sectors. Farmers must freely farm the land and easily transport their goods across the country and beyond.

Farming

The Ethiopian government estimates the potential for irrigated agriculture at 3.5 million ha. The major food crops grown include teff, wheat, barley and sorghum. The continued reliance of the farming community on sporadic rains results in massive (and famine contributing) crop failures. Private businesses (and the government as a last resort) must invest in irrigation methods to decrease the reliance on rain fall for agriculture.

Coffee remains the single most important export cash crop accounting for 65% of total exports. The volume of coffee export has doubled between 1991 and 1996. The government continues to be heavily involved in this important sector for obvious reasons. It must slowly privatize coffee production and exporting. In fact, the Ethiopian Coffee Export Commission would be an ideal institution to take "public" by issuing shares to the general public (shareholders) and assigning it an independent board of directors elected by these shareholders.

Livestock 

Ethiopia has the largest livestock resources in Africa which includes 30 million cattle and 35 million sheep and goats. The means by which this livestock is reared and raised and utilized are still very traditional. Due to the cultural values of the society (and the lack of available investment sources), modern means of livestock management are not widely spread. This needs to change - albeit slowly -to continue to meet the needs of the population.

Honey (and other associated products such as bee wax) production is also another important investment opportunity in Ethiopia. Ethiopia has one of the largest collection of bee colonies and it happens to be the leading honey producing and exporting nation in Africa.

Textiles

Opportunities for production and processing of cotton in Ethiopia are significant. Investment opportunities are potentially attractive in the areas of modern commercial textile production. Increased liberalization in the distribution of fabricated goods will also allow for increased distribution of clothing in the country.

Sources Utilized: The World Bank, The Ethiopian Embassy in Washington, D.C. and The International Monetary Fund.