Over $1.2bln Loan Dispersed to Private Sector Engaged in Agriculture this year

ADDIS ABABA – Loans to Private Sector engaged in the agriculture sector have reached 1.2 billion US Dollars this year, Prime Minister Abiy Ahmed said.

Authorities allocated a total of 267 billion Birr loans to the private sector in the 2021/22 Ethiopian budget year.

More than 34% of the loan was allocated to those engaged in the agriculture sector, Abiy told membera of parliament today, adding at least 1.2 billion dollars (73bln birr) has already been disbursed.

This decision is a part of the government’s effort to boost agricultural productivity in Ethiopia, said the PM.

In addition, the PM said several steps are being taken to increase productivity with a focus on expanding mechanized farming and the application of cluster farming methods.

In the current Fiscal year so far, he said more than 5,000 tractors have been deployed and increased the land covered by mechanized farming to 28%.

The cluster farming system has been registering remarkable achievements over the past years, he said noting that 45% of the total farmland is now included in the system.

Some 336.6 million quintals of various crops have been harvested nationwide during the 2021/22 “Meher” season. Authorities also expect to harvest at least 24 million quintals of wheat from the second round of summer irrigation schemes.

This was achieved due to efforts to resolve the main challenges in the sector, particularly shortage of finance, through increased loan access, claimed the PM, who said the government subsidised additional 15 billion Birr for fertilizer purchase.

The PM said the recent sector reforms have helped the nation to increase its annual export earnings to $4 Billion Dollars in two years from less than $3 billion prior to the reform.

The agriculture sector is the main contributor to the revenues.

The country has earned more than one billion US dollars from Coffee export in the first ten months of the current fiscal year while fruits and vegetables brought in 82.9 million USD.

The PM said efforts will be intensified with a view to boosting agricultural productivity and Ethiopia’s export sector, adding Ethiopia is reaching a stage where it will be able to export wheat.

There are however key commodities such as Sugar that the country has failed to meet demands as the government previously pledged.

In response, Abiy said the government has managed to add five more new factories, up to a total of active nine sugar mills.

 “Despite security challenges in some areas, we have managed during the reforms to increase what was 200,000ton production capacity to 360,000tons of sugar production following efforts to bring into productivity all the factories,” he said

The PM blamed it on the increasing demands in the country while bureaucracy in bringing the desired changes in maximizing the production at the factories. “We know that the demand is still high and… the government will continue to exert its efforts in order to meet that,” said the PM.