Ethiopia and the liquidation of businesses due to the conditions set by the [Saudi] Agricultural Development Fund (ADF) to support and lend to investors in Ethiopia.December 11, 2013 (AlMonitor) — Saudi agricultural investor has warned about the failure of Saudi agricultural investments in
This is not to mention the negative impact of such conditions on the process of correcting the situation of foreign workers in Saudi Arabia,
including many Ethiopians. He revealed that some Saudi investors in
Ethiopia have begun to sell their investments due to the impossible
conditions set by the ADF for loans, in addition to the lack of
facilities to export their produce to Saudi Arabia.
The head of the Saudi Agriculture Investors Association in Ethiopia, Mohammed bin Abdul Rahman Al Shahri, told Al-Hayat that
Saudi investors in Ethiopia have filed complaints to the Saudi king
about the ADF conditions, which are in direct conflict with King
Abdullah’s Initiative for Agricultural Investment Abroad.
He also said that there are more than 400 Saudi businessmen in
Ethiopia investing in the cultivation of a variety of crops, namely
wheat, rice and barley. He added that the association was established to
introduce investors … and show them the best places for agriculture,
where water is abundant. The association also provides translation
services, investment management and communicates with the competent
authorities in Ethiopia. When it was first established, the association
had 10 members, whose number increased to reach 60 agricultural
Shahri also said that Saudi investors in Ethiopia began work in 2008,
following the king’s Initiative for Agricultural Investment Abroad. The
size of Saudi investments in the agricultural sector in Ethiopia is
currently estimated at 13 billion riyals [$3.47 billion].
Moreover, he stated that the investment environment inside Ethiopia
differs from one place to another, as some areas are very weak in terms
of infrastructure. In certain places, investors contributed to building
roads, transportation means and bridges for farmers, since the country
is riddled with rivers. He confirmed that investing in Ethiopia helped
the Ethiopian people, as it created job opportunities. Ethiopian workers
in some small farms number more than 1,500 for a season. Ethiopians
have also received training to use modern equipment, machinery and
techniques relating to the agricultural sector.
He confirmed that Saudi Arabia is one of the largest investors in
Ethiopia, especially in terms of the number of workers. He said that
Saudis face competition from Pakistan, India and China.
Shahri stressed that the ADF has not supported Saudi projects from
the beginning according to the king’s initiative. “We are still waiting
for support, as per the mechanism set forth in the initiative. However,
two weeks ago we were surprised by the ADF conditions, which are
impossible to meet on the part of large agricultural companies, let
alone small investors,” he said. He pointed out that investors have
sought over the past few years to move the initiative from the Commerce
Ministry to the Agriculture Ministry.
“The ADF commissioned a local consultancy office to study the support
provided for agricultural investors abroad, which unfortunately
resulted in these conditions,” he said. He added that the ADF conditions
cannot be met by states, as the fund requested investors to provide
guarantees of the political security in the country where they invest.
“How can this be done?” he asked.
He said that investors were looking forward to ADF support during the
meeting that was held in Riyadh between overseas investors and ADF
representatives. “Unfortunately, the ADF informed us of its impossible
conditions, which it made without consulting any of the investors. This
violates the foundations of the initiative, leading to its failure,” he
He revealed that a number of Saudi companies investing in Ethiopia
have begun to sell and liquidate their farms and said, “A number of
Saudi investors asserted that they were intending to sell their
investments especially since they had waited more than five years
without receiving any support or achieving the terms of King Abdullah’s
Initiative for Agricultural Investment Abroad.”
Shahri continued, “Adjusting the situation of the Ethiopian labor force in Saudi Arabia has
doubled the despair of many investors, fearing for their investments in
Ethiopia. We, as investors, were surprised with the adjustment process.
Many Ethiopians in Saudi Arabia were deported.”
“We should admit that mistakes have been committed by both sides. The
illegal entrance of Ethiopians is unacceptable. In addition, the
Ministry of Labor has dealt with them without knowing their exact number
and the way to deport them,” said Shahri, affirming that “what is
happening with Ethiopians in Saudi Arabia will affect our investments in
their country on the popular level.”
In regard to the stance of the Ethiopian government toward Saudi
projects, Shahri said, “The government of Addis Ababa has not announced
anything. It preserves Saudi investors, and we are following up the
situation from Saudi Arabia. Many investors preferred to stay in Saudi
Arabia until the dust settles there, even though it is the harvest
Shahri called on the governments of both countries to settle the
issue as soon as possible, especially with opposition tabloids in
Ethiopia taking advantage of the situation. He noted that investors are
not facing particular problems since the Ethiopian government is keen to
protect Saudi investors as well as investments.