- East Africa
- Agriculture - Development - Finance
Ethiopia gets multi-million dollar funding for agriculture sector
The Board of Directors of the World Bank has approved a 150 million dollar fund to Ethiopia. The fund aims to support and increase the country’s agriculture productivity, and also to enhance market access for key products. It also seeks to improve the country’s food security.
The World Bank’s Agricultural Growth Program (AGP), which is the brain behind the recently promised funding, has expressed its aim to support Ethiopia in reducing its food insecurity, vulnerability and environmental degradation. AGP will be backed by the International Development Association (IDA) and other sources.
Of the total 150 million dollar funding, Ethiopia will be liable to pay back 108.4 million dollars, which the World Bank considers as a long term loan. The remaining 41.6 million dollars will be issued to the Horn of Africa country as a grant.
With 90 percent of the country’s export product and 84 percent of its labor force dependent on agriculture, the government of Ethiopia’s five year strategic plan, which began this fiscal year, has made the development of the agriculture sector a major priority.
The strategic plan seeks to double the current agriculture output at the end of the 5 year period from 18.08 million metric tones to at least 39.5 million metric tones
The funding, according to observers, seeks to demonstrate World Bank’s dedication to the Ethiopian agriculture sector, and especially as an important element to the World Bank Country Assistance Strategy (CAS) for Ethiopia.
The fund is to help improve farmer’s access to knowledge and information, market, finance and other services through support from key public and private institutions.
The World Bank has expressed its intention to improve small scale agriculture water development and management that would strengthen the management of micro-watersheds and thereby increase agriculture productivity and mitigate weather induced risks including those related to climate change.
“This project will bring much needed attention to a critical sector that can help the government of Ethiopia address food security, increase its resilience to climate variability and promote jobs and small business development,” Karen Brooks, the bank’s sector manager for Africa Region Agriculture Department said in a statement last week.
Despite its great potential, the Ethiopian agriculture sector remains largely untapped. And according to the World Bank, Ethiopia’s agriculture sector is the largest contributor to the country’s overall economic growth.
The livelihood of almost the entire Ethiopian rural population, which stands at about 39.3 percent of the total population and lives below the poverty line, is fully or partially dependent on agriculture.