October 16, 2011

Ethiopian TPLF government to give away 3 mn hectare Land to foreigners

Ethiopia, a landlocked country located in the horn of Africa, is readying over 3 million hectare of land for investors to develop large-scale commercial farms, according to a government official.

“We have developed 3.6 million hectare from the National Land Bank to attract foreign direct investments. Of this, we have already allotted 400,000 hectare, with 70 per cent being to Indian investors. The remaining three million-odd hectare is now available for local and foreign investors,” said Esayas Kebede, director, ministry of agriculture and rural development, Ethiopia.

He was speaking to Business Standard at the India-Africa Business Partnership Summit, a two-day event focused on bilateral trade between the two countries organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here recently.
Ethiopia, which has privatised cultivation of cotton, palm oil, rubber and sugarcane, the identified investment priority areas, had so far seen investments to the tune of $6 billion from India. Over 9,200 investors had received licences for developing large-scale commercial farms in Ethiopia since 1996, out of which around 1,300 are foreign.

“There are also huge investment opportunities in the areas of agro processing, horticulture and floriculture, dairy, meat and leather products. The leasing rates are rational. What we are looking for is rich investors from India, China and other countries, who can contribute to the social development of Ethiopia and help reduce food insecurity,” Kebede said.

The leasing period depends on the crop. For annual crops, the lease period would be up to 20-25 years, while it would be up to 35-40 years for perennial crops, with the minimum investment to take land on lease being $100,000, he added.

Kebede said that the Ethiopian government had a clear policy, specially on the incentives side. Investors are facilitated with a seven-year tax holiday. They are also allowed to repatriate 100 per cent of their earnings to any country out of Ethiopia.

Brushing aside reports on forcible relocation of locals and poor wages to those working on the new farmlands, he said, “We are expanding large-scale farming only in areas where we have sufficient arable land without depriving local farmers of their livelihood. Around 3 million people here are expected to require foreign food assistance this year. We expect our commercial farming initiatives to solve this food shortage.”


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