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January 18, 2010

Egypt becomes biggest commercial land investor in Ethiopia

by Desalegn Sisay

Ethiopia is set to grant 20,000 hectares of land to Egypt, making the latter the biggest foreign investor of agricultural land in Ethiopia.

A branch of the Ministry of Agriculture and Rural Development (MoARD), in charge of commercial farming, has agreed to accept Egypt’s proposal. "We are in the process of providing the farm land," said a source who demanded anonymity. The land is in the Afar Regional State. Egypt’s request was submitted through its National Bank which is expected to sign the deal by the end of the month.

Ethiopia’s policy shift made last year, allowing foreign entities to grab huge commercial farmlands, has attracted a lot of attention from both foreign companies and countries.

The Government of Djibouti was the first to obtain 3,000 hectares of farmland in Bale, a suitable agricultural zone in the Oromia region located some 400 kilometers south of Addis Ababa.

Karaturi, an Indian company, and Saudi Star, established by Sheik Mohamed Al Amudi, a Saudi national billionaire, have also obtained land with the aim of growing export crops for their respective countries. The land deals were made directly with the central government.

Ethiopia has no specialised institutions charged with the promotion of commercial farming despite the country’s new land policies.

But with a growing demand from many foreign entities, the Ethiopian "Government is in the process of establishing a federal body under MoARD" to handle such demands, the source said.

Recently, an Egyptian delegation headed by their Prime Minister, Ahmed Nazif, visited Ethiopia. The 26 member delegation made up of Ministers and heads of agricultural companies met with Ethiopian Prime Minister, Meles Zenawi and expressed both the Egyptian government’s and private companies’ interest to invest in Ethiopia.

According to Ahmed Nazif, the National Bank of Egypt will invest at least 40 million in the agricultural sector. He also said that five Egyptian drug companies were also preparing to invest in the Ethiopian health sector.

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