H.E.DR. ABIY AHMED (ETHIOPIA NEW PRIME MINISTER)
The earth is, indeed, an expansive field of competition. It is a place where its micro-elements, individual humans, differently talented, ever get locked in unending battles to outdo one another in a rationality-moderated survival race. It is a place where micro realities impose a competitive existence on the macro, composed of communities, states, nations and even continents, on which nature has, similarly, bequeathed varying degrees of benevolence. It was a place where diverse agricultural endowments used to be the parameter that exclusively drew the line between the rich and the poor prior to the overpowering appearance of oil to dwarf land tillers and ram rearers in a new world dominated by drillers. A new world of possibilities where Ethiopia, normally rated as disadvantaged by its near-zero oil deposit, has manifested the all-time resilience and incomparable profitability of agriculture by emerging as that agrarian economy which currently shakes the earth with a lightening-speed growth.
It is never a fluke. It is an awesome reality certified by the World Bank and International Monetary Fund (IMF), the twin voice of authority on global economic affairs.
At a time when Nigeria and Saudi Arabia, two oil-producing giants of Africa and Asia, struggled to attain annual GDP growth rates of 6.5% and 3.7% respectively, Ethiopia, powered by its largely agrarian population which accounts for 85% of its total headcount, posted an amazingly higher rate that exceeded 10% .
Specifically, in 2015, the World Bank stated, in its reports, that Ethiopia had witnessed rapid economic growth with its real domestic product (GDP) growth averaging 10.9% within a ten-year space of 2004 and 2014.
This awe-inspiring declaration by the World Bank found a doubtless ally in the position of the IMF. It is no news that the Brenton Institution similarly affirmed this most populous landlocked Nation of the world as the fastest growing non-oil-dependent African economy for two consecutive years, 2007 and 2008.
Although the service sector played a significant role in this impressive performance, the pride of place occupied by agriculture in the Ethiopian economy can never be overemphasized.
Obviously, the typical economic benefits of a huge population have, over a long time, been most manifest in the Country’s agricultural sector.
A major indicator of the people’s power is the status of the Ethiopian agricultural production, which is dominated by small-scale farmers, as the largest source of the East African State’s commodity exports.
Amongst numerous other cash crops, coffee stands out as the largest earner of foreign exchange for Africa’s second largest maize-producing Nation. Other major crops cultivated and exported by Ethiopia include legumes, oilseeds, cereals, potatoes, sugarcane, vegetables and others.
However, Ethiopia’s agricultural prowess is not restricted to crop cultivation. In the business of nurturing varied animal kinds for commercial purposes, particularly export, it has carved for itself the image of a richly-diversified agrarian economy.
In this regard, global ratings, for instance, currently depict the only African Country that conquered invading European colonial forces as the possessors of the fifth largest cattle inventory in the world.
On the whole, the Ethiopian economy is not only flying on the wings of agriculture, it is also expanding and transforming in response to the steady growth of its thriving organized private sector, which increasing interest in agro-allied business is, at the moment, heralding a revolutionary transformation.
Concerning foreign influence, investigation revealed increasing prominence of designer leather products like bags in the Ethiopian export business. A major evidence of this lies in what may be rightly described as a foreign investment revolution, particular in the production sector that has birthed some international brands on the Ethiopian landscape.
Taytu is one of such international brands. As the first luxury designer label in the Country, this exotic brand of leather products, produced in Ethiopia, is currently a cash cow that breeds a large chunk of hard currency for Ethiopia.
The case of Taytu is never an isolated case. It is only an expression of a renewed global interest in Ethiopia, which is, evidently, a logical consequence of its highly impressive growth rate, a height which indeed has, for long, remained an impossible dream of so many a nation, even the oil-producing.
Some few more instances would, perhaps, further help convey the truth that the wise no longer ignore Ethiopia in their search for a fertile soil to grow their hard-earned resources, through business.
The Tiger Brands are one of the latest entrants into Ethiopia. Last year, this South Africa’s largest consumer-foods firm registered its foray into the cradle of coffee with a big acquisition, just as Diageo and Heineken recently paid nearly $400m combined to acquire state breweries in the Country that roundly manifests the fullness of nature’s opposites.
On the 9th day of May, 2017, a ‘Breaking News’ item jerked the world from its slumber, into alertness –
‘Schulze Global Investments launches a $100m Ethiopia fund’.
This is indeed epochal and historical. The initiative of this American investment firm and family office is the first-ever private-equity fund focused exclusively on Ethiopia. Anchored by at least $15m from Britain’s CDC, a government-owned provider of development finance, and $10m of the family’s own money, the fund will invest in sectors from agribusiness and cement to health care and natural resources.
The significance of this landmark investment lies not in its mouth-watering value; it actually resides in its status as a door-opener in the Country’s agricultural sector.
Perhaps, the largely small-scale nature of this highly lucrative sector, which universal strength of viability derives from the non-negotiable importance of food to mankind, has, for long, discouraged some notable international investors from looking towards its direction.
However, a reflective look at the state and prospects of agriculture in Ethiopia would unveil it as an exceedingly beautiful and fertile virgin that only the short-sighted and the internally ‘blind’ can ignore.
In the first place, its gigantic population represents abundant availability of human resources necessary for success in farming and its allied ventures in Ethiopia. However mechanized a farming enterprise may be, the significance of the human hand in its day-to-day activities can never be over-emphasized.
One thing that should particularly endear and attract agriculture-oriented investors, worldwide, to Ethiopia is the fact that 85% of its populace that far exceeds one hundred million is, presently, employed in the food production, processing, packaging or marketing industry. This is nothing but a clear indication that a large army of experienced personnel is readily available for existing and potential investors to draw from. Obviously, this comes with an added advantage of cost reduction, as training cost would, thus, be minimized.
Obviously, Schulze Global Investments and its ilk have succeeded in sighting abundant opportunities in a terrain where many others have failed to perceive the least of business prospects. The current low level of large-scale agricultural investments in Ethiopia is, in itself, a magnetizing advantage to the discerning. If anything, the status quo is that of near-zero competition for any business organization that chooses to go Ethiopian as Schulze has wisely done recently.
In the final analysis, the proven volatility of the oil and gas sector, which has plunged the global economy into its present state of devastation, is a compelling necessity for private enterprises, being the current prime movers of economies around the world, to rediscover and explore the largely under-utilized non-oil resources and opportunities that vastly litter the landscape of the second most-populous African Country, officially known and referred to as the Federal Democratic Republic of Ethiopia. Here lies the key to easy prosperity, admissible off-side goals, on the planet earth with its widespread fragile and volatile competition that scorches.
By: Our Senior Correspondence