Ethiopia and AfDB Group sign $84.3 million grant agreement to enhance wheat production

The African Development Bank Group has granted Ethiopia $84.3 million in funding to boost wheat production and increase farmer incomes.

On August 2, 2023, Ethiopian Finance Minister Ahmed Shide and African Development Bank Group Deputy Director General for East Africa, Abdul Kamara, signed a grant agreement for the country's Climate Resilient Wheat Value Chain Development Project (CREW).

The grant comprises $54 million from the African Development Fund, the Bank Group’s concessional lending window for low-income countries, $20 million from the Government of the Netherlands, $10 million from agribusiness firm OCP Africa, and $300,000 from the Global Center on Adaptation.

The Ethiopian government will contribute $10 million in counterpart funding for the project.

The project has three components: Climate Smart Wheat Productivity and Production; Market Infrastructure, Linkages, and Agri-Finance; and Project Coordination and Management.

Under its flagship Technologies for African Agricultural Transformation (TAAT) initiative, the African Development Bank Group has supported Ethiopia and several other countries across the continent to boost productivity in agriculture.

CREW was designed to scale up and sustain TAAT’s successful results. The plan, which supports Ethiopia’s wheat self-sufficiency initiatives, will be implemented over five years. The project will benefit 500,000 small-scale farmer households.

In his remarks during the signing, held in Addis Ababa, Kamara said: “The CREW Project will ensure that farmers in Ethiopia can access agricultural inputs to raise local production of wheat such that supply disruptions resulting from the Russia—Ukraine crisis do not worsen the food security situation already made precarious by Covid-19, climate change and rising cost of living. It also seeks to sustain Ethiopia’s exemplary strides in attaining wheat self-sufficiency and export orientation, a model that other African countries should emulate.”

He added: “The signing of this grant demonstrates the Bank’s unwavering commitment to supporting Ethiopia and its people, and further reaffirms the partnership between the Bank and the government towards achieving Ethiopia’s vision of becoming a lower middle-income country by 2025.”

On his part, the Minister of Finance, H.E. Ahmed Shide, lauded the Bank’s support, underscoring that the project will accelerate and sustain the government’s wheat self-sufficiency initiatives.

Ethiopia is the second largest wheat producer in sub-Saharan Africa, after South Africa. The country plans to become wheat self-sufficient and net exporter by 2025/26, aiming to produce an additional 4.2 million tonnes of irrigated wheat by deploying proven technologies and innovations such as TAAT.

The grant brings the Bank’s current commitment to Ethiopia to $1.23 billion, covering the key sectors of basic services, energy, transport, water supply and sanitation, agriculture and the private sector.