Ethiopia

     In-depth analysis of investment cases
          Key financial and economic data
           Impact highlights (coming soon)

Ethiopia's agrifood sector presents high-impact investment opportunities to drive agricultural transformation, strengthen food systems, and accelerate economic growth. This year the Government of Ethiopia showcases four strategic agrifood investment cases: Agricultural Mechanization, Animal Feed Production, Extensive Rangeland Management (Ranching), and Grandparent Stock Poultry Farming.

These investment opportunities address key constraints affecting productivity, competitiveness, and resilience across Ethiopia's agrifood sector. They aim to modernize farming systems, improve livestock productivity through better feed and sustainable rangeland management, and expand domestic poultry breeding capacity to meet growing demand for poultry products.

Together, these investment cases offer scalable and commercially viable solutions that can enhance food security, create employment, increase rural incomes, and contribute to sustainable and at-scale agrifood system development in Ethiopia.

Geospatial Typologies

Agro-informatics connects information technology with the management, analysis and application of agricultural data to indentify territories with untapped agrifood potential and design more accurate and targeted agrifood interventions. The use of new technologies and techniques in agriculture, such as satellite imagery, remote sensing, and geographic information systems, enable the transformation of data into actionable information.

POVERTY
POTENTIAL
EFFICIENCY
Poverty
Potential
Efficiency
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Investment cases in Ethiopia

Investment Cases and Interventions

Hand in Hand initiative

Mechanization

INVESTMENT
USD 350.8M
INTERNAL RATE OF RETURN (%)
24%
NET PRESENT VALUE
USD 121.3M
DIRECT BENEFICIARIES
6.7M SHFs
INDIRECT BENEFICIARIES
12.75M
INCOME INCREASE PER CAPITA
4,866 USD/person
EMISSION REDUTION (EXACT)
+30,173,841 tCO₂e

This investment proposal focuses on establishing and expanding the local manufacturing of affordable and accessible agricultural machinery and equipment tailored to the needs of Ethiopian farmers. The proposed investment includes walking tractors (8-20 HP), compact tractors (20-75 HP), medium-sized tractors (70-100 HP), irrigation pumps (1.5-5 HP), and low-cost household and small-scale irrigation technologies. The investment aims to increase mechanization and irrigation uptake, thereby enhancing the productivity, efficiency, and competitiveness of Ethiopia's agrifood sector.

The investment requirement is USD 350.8 million. The project is financially attractive, with an estimated Internal Rate of Return (IRR) of 24 percent and a Net Present Value (NPV) of USD 121.3 million. It is expected to directly benefit approximately 6.7 million smallholder farmers and indirectly improve the livelihoods of an estimated 12.75 million people. In addition, the investment is projected to generate an average per capita income increase of USD 4,866 for direct beneficiaries, contributing significantly to poverty reduction, food security, and inclusive economic growth in rural Ethiopia.

Hand in Hand initiative

Animal feed

INVESTMENT
USD 248.2 M
INTERNAL RATE OF RETURN (%)
20.8%
NET PRESENT VALUE
USD 95.5M
DIRECT BENEFICIARIES
6,914 employees
INDIRECT BENEFICIARIES
2.6M
INCOME INCREASE PER CAPITA
3,735 USD/person
EMISSION REDUTION (EXACT)
+10,951,452 tCO₂e

The animal feed production investment case is designed to address one of the most critical constraints facing Ethiopia's livestock sector: the limited availability of sufficient, high-quality animal feed. The proposed investment focuses on the production of three key feed products, including manufactured feeds for both cattle and poultry, as well as the production of forage seed (alfalfa) to support sustainable feed supply systems. The manufactured feed portfolio comprises concentrate feed blocks and concentrate feed formulations for cattle, alongside quality feed products for the poultry industry. By improving the availability and accessibility of nutritious feed, the investment will contribute to enhanced livestock productivity, improved animal health, and increased efficiency across the livestock value chain.

The investment required is USD 248.2 million. The project demonstrates strong financial viability, with an estimated Internal IRR of 20.8 percent and a NPV of USD 95.5 million. In addition to generating attractive financial returns, the investment is expected to create approximately 6,914 direct jobs and indirectly benefit around 2.6 million livestock owners across the country. The project is also projected to deliver a per capita income increase of USD 3,735 per direct beneficiary, contributing to higher rural incomes, improved food security, and sustainable growth of Ethiopia's livestock sector. 


Hand in Hand initiative

Extensive rangeland 
management (Ranching)

INVESTMENT
USD 136.6M
INTERNAL RATE OF RETURN (%)
25%
NET PRESENT VALUE
USD 91.7M
DIRECT BENEFICIARIES
2,676 employees
INDIRECT BENEFICIARIES
13,380 households
INCOME INCREASE PER CAPITA
2,648 USD/person
EMISSION REDUTION (EXACT)
 -56,620 tCO₂e

Extensive rangeland management and ranching represent a promising investment opportunity. This initiative focuses on identifying and providing agro-ecologically suitable sites that meet established ranch development standards. It facilitates access to appropriate land and rangelands for both natural and improved forage production, enabling private investors to establish sustainable ranching operations and maintain replacement herds of suitable cattle breeds.

The investment model assumes the establishment of three ranches, each designed to meet an annual demand of 71,414 head of cattle. The estimated investment cost is USD 45.5 million per ranch, resulting in a total investment requirement of USD 136.5 million for all three ranches. The project demonstrates strong financial viability, with an estimated Internal Rate of Return (IRR) of 25% and a Net Present Value (NPV) of USD 90.5 million. It will directly benefit 2,649 individuals and indirectly support approximately 13,380 consumers. In addition, the estimated annual per capita income for each direct beneficiary is USD 2,648, contributing to improved livelihoods and rural economic development.

poultry Ethiopia

Grandparent poultry

INVESTMENT
USD 9M
INTERNAL RATE OF RETURN (%)
30%
NET PRESENT VALUE
USD 4.2M
DIRECT BENEFICIARIES
16,339 SMEs
INDIRECT BENEFICIARIES
406,320 SHFs
INCOME INCREASE PER CAPITA
60,000 USD/SME
EMISSION REDUTION (EXACT)
 +9,856 tCO₂e

The proposed Grandparent Stock (GP) Poultry Farm and Parent Stock Production Business in Ethiopia is designed to address the country's growing demand for day-old chicks (DOCs), eggs, and poultry meat. Demand for poultry and products is expected to increase significantly due to rapid population growth, urbanization, rising incomes, and changing dietary preferences. To meet this growing demand, the project proposes the establishment of ten Grandparent Stock (GP) poultry farms over a ten-year period. The first phase will involve the development of two GP farms, comprising one broiler GP farm and one layer GP farm.

The estimated capital investment for each GP farm is approximately USD 4.5 million. Consequently, the initial phase will require a total investment of USD 9.0 million for the two farms. This investment represents a strategic opportunity to strengthen Ethiopia's poultry breeding infrastructure, reduce dependency on imported genetics, enhance domestic production capacity, and accelerate the transformation of the country's poultry sector.

Resources

FAO's Hand-in-Hand Initiative
21/12/2023

The Hand-in-Hand (HIH) Initiative supports the implementation of nationally led, ambitious programmes to accelerate agrifood systems transformations...

In the Media

Contacts

For more information, please contact the Hand-in-Hand team