IFAD Grants $106.54 million to Ethiopia’s Agriculture Program

ADDIS ABABA – The International Fund for Agricultural Development (IFAD) and Ethiopia on Monday signed a 106.54 million US Dollars grant agreement.

The UN specialized agency says the Participatory Agriculture and Climate Transformation Program (PACT) grant will support rural households to sustainably improve their incomes and food and nutrition security and help them build their resilience.

The agriculture sector in Ethiopia accounts for about 45% of the country’s GDP and provides employment to approximately 80 % of the population, the majority of whom live in rural areas.

Small-scale farmers, who produce the bulk of the country’s food, depending on rainfall to grow their crops.

Unfortunately, due to increasingly unreliable rainfall and the escalating cost of inputs, their production capacity has been reduced significantly, according to IFAD.

“The grant comes at a critical time for the country, to build the resilience of smallholder farmers to multiple shocks and safeguard food and nutrition security,” said Sara Mbago-Bhunu, IFAD Regional Director for East and Southern Africa.

PACT aims to benefit 750,000 rural people in Amhara; Oromia; SNNP; Sidama; Somali; and South western Ethiopia regions with a focus on women (50%), and youth (40%).

To achieve its goal, the grant will support community-led, climate-smart initiatives that aim to improve productivity through equitable and sustainable access to natural resources and market-led production.

The project will also promote agribusiness development to strengthen farmers’ and pastoralists’ capacity to access remunerative markets and rural finance.

Additional financing, to expand the geographic area to the rest of the country, is being negotiated with other financiers, as per the IFAD.

The PACT grant is funded by IFAD (US$ 78.2 million), the European Union (US$ 17.84 million) and ASAP (US$ 10.5 million).

“This grant offers us the opportunity to build on IFAD’s previous work in the country to facilitate farmers’ access to rural finance, technologies and markets, and to scale up these interventions that have a multiplier effect on building resilience of food systems in Ethiopia,” IFAD Regional Director Sara said.