The Ethiopian Government has developed comprehensive agricultural and economic development plans that have contributed to the country’s substantial growth in agriculture, industry and services. There has also been tremendous growth in the number, diversity and market share of private businesses in the Ethiopian economy. However, basic challenges such as unskilled labor, high transport costs, limited availability of financial and telecommunications services, and land tenure insecurity require further attention.
We work closely with the Government of Ethiopia to implement activities that promote increased trade. USAID Trade and Investment Hubs are designed to reinforce regional and bilateral efforts to strengthen Africa's economic competitiveness and assist countries to take greater advantage of the trade opportunities provided by the African Growth and Opportunity Act and other global trade initiatives. The Trade and Investment Hub programs include trade capacity building, improvements to the private sector enabling environment, better market access and opportunities, trade facilitation, food security programs, and export promotion support for African products.
Learn more: East Africa Trade and Investment Hub
Private Sector Development
Our mission in Ethiopia works to advance an environment that supports increased private sector investment and growth. In the past five years, Ethiopia has experienced substantial growth in all three major economic sectors (agriculture, industry and services). However, investments by the private sector lag far behind those of government and the country continues to rank lowest in the region for the World Bank’s Ease of Doing Business Index.
We endorse private sector development within core Feed the Future activities along with stand-alone activities and the New Alliance for Food Security and Nutrition to create the necessary environment for private sector growth. We work with producers, processors and suppliers to build private sector capacity and competitiveness. We also foster private sector development by enabling a more stable and inclusive financial system. This is achieved by promoting discussion between private and public institutions and improving business development services for small and medium enterprises.
Launched in 2012, the New Alliance for Food Security and Nutrition ushered in a new phase of global investment in food security and nutrition, building on previous G8 efforts. The New Alliance is a shared commitment to achieve sustained and inclusive agricultural growth and globally raise 50 million people out of poverty over the next 10 years.
Development Credit
Ethiopia’s farmers lack access to finance, which they need to modernize their practices and purchase or lease machinery. Ethiopian banks generally require collateral valued at a minimum of 100 percent of the value of the loan, plus interest, which is unattainable for most farmers. Since all Ethiopian land belongs to the government, farmers cannot use the land they lease as collateral and banks do not accept crops or other farm stock as collateral.
We encourage growth of the private sector and microenterprises in Ethiopia by improving access to finance and credit for underserved populations. Our development credit portfolio focuses on women, diaspora and local entrepreneurs engaged in small- and medium-sized business activities in agriculture and health.
To expand access to credit in the agricultural and health sectors in Ethiopia, we established a loan portfolio facility shared by eight private commercial banks. For agriculture, the program supports the banks in extending credit to agricultural cooperatives, livestock marketing groups, private sector agro-processors, and private sector commercial horticulture producers. We have a dedicated loan guarantee focused on the expansion of women-owned businesses. In health, with funding provided by the President's Emergency Plan for AIDS Relief, we will increase lending to private health sector enterprises, particularly those providing HIV/AIDS and TB services. Loans will enable private clinics, pharmacies and hospitals to make quality improvements and expand services to more people living with HIV and TB.
Activities Include
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Development Credit Authority: Increase access to short-term marketing credit and medium-term investment capital for local business owners, diaspora, women-owned businesses, and the agriculture sector.
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Feed the Future Ethiopia Commercial Farm Services Project: Build 40 farm service centers to reach at least 200,000 smallholder farmers. Each center provides smallholder farmers with brand label, high quality inputs and services, customized to their local production needs. Video: Developing Farm Service Centers in Ethiopia.
New Alliance for Food Security and Nutrition
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Feed the Future Ethiopia Advanced Maize Seed Adoption Program: Help farmers transition from open-pollinated varieties of maize seed to higher yielding hybrid maize. DuPont Pioneer and USAID are investing more than $2 million to provide improved varieties of maize seed and technical assistance. A New Alliance for Food Security and Nutrition public-private partnership with the Ethiopian Ministry of Agriculture, Agricultural Transformation Agency, DuPont Pioneer, and USAID. Video: Success of the Advanced Maize Seed Adoption Program,
Featured Articles
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Verde Beef - Expanding the Private Sector [Video, 2:54]
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Public-Private Partnership Delivers Seeds of Change in Ethiopia [Frontlines]
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A Right to Land [Frontlines]
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A Powerful Piece of Paper [Frontlines]
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Putting Local Wealth to Work in Ethiopia [Frontlines]
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Agriculture in Africa: Less Talk, More Action [Feed the Future Blog]
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Financing Women Owned SMEs: A Case Study in Ethiopia [PDF, 4MB]
Related Resources
Related News
New Alliance for Food Security and Nutrition
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USAID-DuPont Partnership Helps Hundreds of Thousands of Ethiopian Farmers Transform Production and Livelihoods (May 8, 2017)
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USAID Expands Wheat Flour Fortification (October 8, 2015)
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U.S. Congressional Delegation Looks at Impact of American-Ethiopian Development Cooperation (August 27, 2015)
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New Fortified Wheat Flour Launched by ASTCO Food Complex (March 17, 2015)
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New Chickpea Products Launched by New Alliance for Food Security and Nutrition Partner Guts Agro Industry (April 10, 2014)
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New Maize Public-Private Partnership Will Enhance Incomes of More Than 35,000 Farmers (May 17, 2013)
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USAID Project to Increase Availability of Affordable and Nutritious Foods in Ethiopia (April 18, 2013)
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Government of Ethiopia Leads Start-Up of New Alliance for Food Security and Nutrition with G-8 and Private Sector Partners (September 12, 2012)
Commercial Farm Service Centers
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Feed the Future Ethiopia Commercial Farm Services Project Opens Center in Bako (May 12, 2017)
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USAID Expands Farm Service Center Network (December 21, 2016)
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USAID Commercial Farm Service Program Opens Center in Shashemane (June 12, 2014)
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USAID Commercial Farm Service Program Opens Bishoftu Farm Service Center (December 17, 2013)
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New Pilot Project to Launch Farm Service Centers as Businesses in Oromia Region of Ethiopia (February 4, 2013)
Coffee, Chickpea, Maize, Sesame, Honey, Livestock and Dairy
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USAID Activity Puts Ethiopiaan Agribusiness on World Map (February 16, 2016)
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USAID Inaugurates Livestock Feed Manufacturing Facility (November 19, 2015)
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ECX Launches Independent Food Traceability System (November 12, 2015)
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The Impact Angel Network Announces Investment in Ethiopian Food and Beverage Company (november 3, 2015)
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USAID Inaugurates Livestock Feed Manufacturing Facility (November 19, 2015)
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The U.S. Impact Angel Network Announces Investment in Ethiopia (October 4, 2015)
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New Chickpea Processing Facility in Adama (August 25, 2015)
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USAID and Irish Aid Collaborate to Award Ethiopian Dairy Innovation Fund Recipients (March 16, 2015)
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International Coffee Conference Focuses on Innovations in Quality and Traceability for High Value Export Market (November 6, 2014)
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Forum Connects Investors to Opportunities in Sesame, Dairy and Honey Sectors (January 16, 2014)
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USAID Facilitates U.S. Investment into Ethiopian Coffee Company (November 22, 2013)
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Promotion of Ethiopian Coffee and Export Opportunities (November 4, 2013)
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USAID and Ethiopian Commodities Exchange to Strengthen Coffee Trading and Marketing (January 31, 2013)
Development Credit Authority
- Loan Agreement Will Increase Access to Finance for Ethiopian Businesswomen (September 29, 2016)
Textiles
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U.S. Supports Trade and Investment in East Africa (October 21, 2015)
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Origin Africa Designer Showcase Spotlights Ethiopian Talent and Textiles at U.S. African Growth and Opportunity (AGOA) Forum (August 12, 2013)
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100 Traditional Weavers Connect with Export Market (February 7, 2013)
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