Your Excellency Ato Ahmed Shide, State Minister of Finance and Economic Development,
Distinguished Guests,
Ladies and Gentlemen,

Endemen Aderachehu.

It is always a most pleasant duty for me to sign Exchange of Notes for Japanese grant-in-aid with Your Excellency Ato Ahmed Shide here at MOFED, and this is my fourth time to do so.

The Notes we have just signed are for Japan’s Grant-in-aid for the Food Security Project for Underprivileged Farmers, also known as KR II.  This program aims to help Ethiopia to increase its food production.  The grant provided by the Japanese Government this time is 490 million Japanese Yen, which is equivalent to about 109 million ETB at the current exchange rate.

As a key sector in Ethiopia, agriculture is featured in the Growth and Transformation Plan (GTP), with a projected average annual growth rate of 8.6% between 2010/11 and 2014/15.  In order to facilitate such agricultural growth, a 10-year program named the Agricultural Sector Policy and Investment Framework (PIF) was worked out and adopted.  Indeed, your achievement in agricultural growth for the first year of the GTP was very impressive, reaching 9%, which was higher than the target.

The PIF is a 10-year road map for agricultural development that identifies priority areas for investment and estimates the financial requirements.  The PIF not only outlines but also elaborates specific objectives, goals and means of utilization.  Under the PIF, the Ethiopian Government has formulated a set of comprehensive and consistent policies for agriculture.  However, this ambitious program requires huge investment.  Therefore, ensuring financial resources for the PIF will be a big challenge for the coming years not only for the Ethiopian Government but also for its development partners.

Excellency, Ladies and Gentlemen,

Agriculture has continued to be a priority sector in Japan’s ODA policy toward Ethiopia in view of the dominant role it plays in the Ethiopian economy.  85% of the entire population lives in the rural areas, and about 43% of the GDP is created by agriculture.  Food security, which includes agricultural and rural development as well as water supply, is one of the two main pillars of our ODA policy in Ethiopia.  We will continue to extend our assistance to Ethiopia for increased crop production and productivity in agriculture in accordance with the GTP and the PIF.

For this purpose, modern agricultural inputs are critically important, in particular fertilizer.  Data shows that annual average fertilizer demand in Ethiopia has gone up substantially from around half a million tons in the previous year to eight hundred thousand tons* in the current year.  This will require the Ethiopian Government to spend additional foreign reserves.  Therefore, we are pleased to play a modest role in mitigating the existing supply-demand gap of fertilizer through our Grant-in-aid Scheme for the Food Security Project for Underprivileged Farmers (KR II).  I personally believe that assistance to help increase crop production is more important than food assistance itself.

In this context, if I am allowed, I would like to add one more point.   Recognizing the huge fertilizer need in this country, Japan has extended fertilizer and some agricultural equipment to Ethiopia through this KR II scheme since 1985.  The total amount Japan has provided for the past quarter century amounts to 15.6 billion Japanese Yen, which is equivalent to 3.35 billion ETB at the current exchange rate.

Excellency, Ladies and Gentlemen,

In concluding, I would like to share some of my wishes with you regarding this agricultural assistance.  Firstly, this grant-in-aid program should be implemented as quickly as possible.  Secondly, the agricultural inputs procured should reach underprivileged farmers so that the inputs will contribute to improving their livelihoods.  Thirdly, I also hope that, overall, the inputs will be used effectively so that they will complement the Ethiopian efforts under way to achieve its agricultural targets stipulated in the GTP.

Amesegenalehu!