The World Bank Group has approved a US$80mn grant from the International Development Association to support the government of Ethiopia to boost agricultural productivity and enhance market access for smallholder farmers
Agricultural growth has been a crucial driver of poverty reduction over the past decade, according to the World Bank’s 2019 Poverty Assessment for Ethiopia. Additional funding for the Second Agricultural Growth Project (AGPII) will further increase the economic potential of Ethiopia’s agricultural sector.
Vikas Choudhary, senior agricultural specialist at the World Bank, said “AGPII has made notable contributions to poverty reduction in Ethiopia. The project has been delivering solid results on the ground, especially in increasing productivity and enhancing commercialisation.
“Additionally, by promoting the use of irrigation, the project has enabled farmers to harvest two or three crops in a year; as opposed to a single crop under rainfed conditions, and diversify from cereals to high-value horticulture and nutritious crops.”
This additional funding will help tackle these challenges and is vital to ensure that the agricultural sector in Ethiopia reaches its full potential. The funds will go towards scaling up results achieved so far and improving the technical design of different activities.
In addition, the funds will fill the unforeseen financing gaps created by high inflation and accelerate the implementation of project activities which have been delayed due to significant cost-over run.
Ousmane Dione, World Bank country director for Eritrea, Ethiopia, South Sudan and Sudan, said, “The agricultural sector is crucial to Ethiopia’s economy as it accounts for 45% of total output and employs nearly 80% of the labour force. While encouraging results have been achieved so far, more work is needed to address remaining challenges and accelerate productivity gains, reduce exposure to erratic climatic conditions, decrease land degradation and enhance the natural resource base on which the sector depends.”