Microfinanza visiting Ethiopia

Microfinanza visiting Ethiopia: new opportunities and facilities for the agro-industrial business sector

26 March 2024

The agro-industrial sector in Ethiopia plays a significant role in the country’s economy, as agriculture is the primary source of livelihood for the majority of the Ethiopian population. Ethiopia is rich in natural resources and has vast agricultural land suitable for cultivation, with various climatic zones supporting the growth of a wide range of crops. However, despite the potential of the sector, there are significant challenges to be considered for the broader development of the agro-industrial sector. To address these challenges and promote the development of the agro-industrial sector, the Ethiopian government and other international organisations have implemented various policies and programmes.

During the last two weeks, a Microfinanza team of experts has been working closely with the UNIDO team in Ethiopia in the framework of the Integrated Agro Industrial Parks (IAIP) programme.

Three agro-industrial parks are already operating in Bure (Amhara Region), Bulbula (Oromia Region), and Yirgalem (Sidama Region), while one is under construction in Baeker (Tigray Region). The parks cover an overall surface of more than 1 000 hectares and aim to create up to 400,000 jobs in the Country.

The agro-industrial parks are at the core of the Ethiopian government’s strategy to develop sustainable agro-processing practices, able to guarantee food security at the national level and to contribute to the economic development of the Country.

The current pipeline of operating and candidate companies shows a wide array of opportunities in different value chains, including avocado, coffee, dairy, soya beans, maize, fruit and vegetables, honey, and many others.

Standards, certifications, and traceability are key factors to increase the quality of the products and consequently their value, expanding the opportunities within the internal market and for exports. This is why the Italian Agency for Development Cooperation has largely invested in this direction, working in partnership with the Ethiopian Government and the UNIDO technical assistance.

In this framework the Microfinanza team is contributing towards the design of a dedicated financial facility to leverage the potential of this investment and to enhance the most promising businesses to flourish, while increasing their social and environmental impact.

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