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Your Excellency Ato Ahmed Shide, State Minister of Finance and Economic Development,
Distinguished Guests,
Ladies and Gentlemen,
Endemen Aderachehu.
This is my sixth time to attend a signing ceremony for exchange of notes for grant-in-aid here at MOFED. It is a great honor for me to share this task with Your Excellency once again.
The notes we have just signed and exchanged are for Japan’s grant-in-aid for the food security program for underprivileged farmers, better known as KR II. This assistance aims to help Ethiopia promote food production with the supply of agricultural inputs. The grant the Japanese Government will extend to the Ethiopian Government is 490 million Japanese Yen [equivalent to 105 million ETB at the current exchange rate].
Excellency, Ladies and Gentlemen,
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% for five years from 2010/11. In order to facilitate such agricultural growth, a 10-year program named the Agricultural Sector Policy and Investment Framework (PIF) was adopted in August 2010. Under this PIF, comprehensive and consistent policies for agriculture have been formulated. These include identifying priority areas for investment, estimating the financial requirements, and elaborating specific objectives, goals to achieve, and means of utilization. However, this ambitious program requires huge investment.
Therefore, ensuring financial resources for the PIF will be a big challenge for the coming years for both the Ethiopian Government and its development partners. It is also worth mentioning in this context that the New Alliance for Food Security and Nutrition was launched in Ethiopia in September this year as a joint effort by the Ethiopian Government, its development partners and the private sector. It will review key agricultural policy issues and encourage private sector investment in agriculture and its related industries.
Excellency, Ladies and Gentlemen,
Agriculture has continued to be a priority sector in Japan’s ODA policy toward Ethiopia because of its dominant role in the Ethiopian economy. As of 2010, 77% of the population is engaged with agriculture, and about 41% 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 grants and technical cooperation to Ethiopia in order to help smallholder farmers increase productivity in agriculture.
For this purpose, modern agricultural inputs are important, in particular fertilizer. Data shows that the annual fertilizer requirement has gone up substantially in Ethiopia, reaching 1.75 million tons in 2011. This will require Ethiopia to spend additional foreign reserves for fertilizer imports due to its limited domestic supply capacity. Therefore, we are pleased to play a modest role in mitigating the existing supply-demand gap of fertilizer through our Grant-in-aid Scheme, KR II. By the way, the total amount Japan has provided to Ethiopia through KR II since 1985 amounts to 16.1 billion Japanese Yen [equivalent to 3.46 billion ETB at the current exchange rate]. I personally believe that assistance to help increase crop production is more valuable than food assistance itself.
Excellency, Ladies and Gentlemen,
Japan has been engaged with the economic and social development of Ethiopia for many years. This year, we have modified our ODA policy so that we can better help Ethiopia implement the GTP with particular emphasis on food security and industrial development. Infrastructure development and human resource development are also our priority areas. We will keep close contact with Your Excellency and other concerned ministries so that our two governments continue to work together in better coordination for the sustainable development of Ethiopia.
Amesegnalehu.
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