EAC & The Horn

Sh12 billion grant to expand Ethiopia’s wheat industry

In a significant boost to Ethiopia’s agricultural industry, the African Development Bank Group will advance a $84.3 million (Kes12.15 billion) grant to enhance the country’s wheat production while increasing farmers’ incomes.

The grant aims to drive Ethiopia’s agricultural self-sufficiency and foster economic growth within the sector.

Ethiopia’s Finance Minister Ahmed Shide and Abdul Kamara, Deputy Director General for East Africa at the AfDB sealed the grant agreement on August 2, 2023.

The agreement will boost the rollout of Ethiopia’s Climate Resilient Wheat Value Chain Development Project (CREW), an initiative set to transform wheat production in the country.

Climate Smart Wheat Productivity

The grant structure comprises various contributors, with $54 million originating from the African Development Fund, the Bank Group’s lending window designed for low-income nations.

Additionally, $20 million will come from the Dutch Government, $10 million from agribusiness firm OCP Africa, and $300,000 from the Global Center on Adaptation.

Further, the Ethiopian government is poised to contribute $10 million in counterpart funding for the project.

The CREW project is structured around three key components: Climate Smart Wheat Productivity and Production, Market Infrastructure, Linkages, and Agri-Finance, as well as Project Coordination and Management.

These facets are designed to elevate wheat production, enhance market accessibility, and ensure efficient project execution.

The project’s strategic design aligns with the overarching framework of the Technologies for African Agricultural Transformation (TAAT) initiative, spearheaded by the AfDB. Its objective is to enhance productivity in the agricultural sector across various African countries, with Ethiopia as one of its focal points.

The CREW project, spread over a five-year period, intends to benefit about 500,000 small-scale farmer households.

During the signing ceremony in Addis Ababa, Abdul Kamara emphasized the profound impact of the CREW Project. Kamara stated that the initiative’s aim is to ensure uninterrupted access to agricultural inputs for Ethiopian farmers, mitigating supply disruptions arising from global challenges such as the Russia-Ukraine crisis, Covid-19, climate change, and escalating living costs.

Read also: The man who brought East Africa’s roadside chapatis

Ethiopia’s wheat self-sufficiency

Kamara further highlighted that the CREW Project is designed not only to bolster wheat production but also to sustain Ethiopia’s progress towards self-sufficiency and export-oriented growth, setting a precedent for other African nations to follow.

Finance Minister Ahmed Shide expressed his gratitude for the Bank’s support and emphasized the potential of the project to accelerate and sustain Ethiopia’s wheat self-sufficiency goals.

At the moment, Ethiopia is the second largest wheat producer in sub-Saharan Africa, after South Africa. The country plans to become wheat self-sufficient and net exporter by 2025/26. It seeks to produce an additional 4.2 million tonnes of irrigated wheat by deploying proven technologies and innovations such as TAAT.

The grant brings the Bank’s current commitment to Ethiopia to $1.23 billion, covering the key sectors of basic services, energy, transport, water supply and sanitation, agriculture and the private sector.

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