Saudis can develop unutilized agricultural land of Ethiopia to grow cereals: PM Meles

Saudis can develop unutilized agricultural land of Ethiopia to grow cereals: PM Meles

Thursday, 07 August 2008
Addis Ababa, August 7 (WIC) - Saudi Arabia, which is making efforts to provide food security for its nationals, can look up to Ethiopia where huge tracts of unutilized agricultural land are available for growing cereals,Arab News quoted Prime Minister Meles Zenawi as saying.

A Saudi ministerial delegation, which visited Ethiopia to explore the prospects of investing in agriculture,is impressed by the country’s huge potential and is sending as a follow up a team of experts to conduct specialized studies, Meles revealed in an exclusive interview with Arab News.

He said Saudi Arabia has interest in investing in agriculture, particularly in production of cereals, and has been looking at various options. One of the countries they are looking at is Ethiopia, which has a lot of unutilized land, particularly in the lowland areas of the country where all sorts of agricultural products can be grown.

The Saudi delegation studied the prospects of investing in agriculture in this country. ''We told them that we would be very eager to provide hundreds of thousands of hectares of agricultural land for investment, particularly for cereal production. There is a broad agreement and understanding and this will be followed by visits by Saudi experts to conduct specific studies for investment, '' the PM said.

With regarded to Saudi investments in Ethiopia, Prime Minister Meles said most of the Saudi investments have been in manufacturing and hospitality sectors. This has been the focus so far, but we expect a sizeable increase in the Kingdom’s investment in agriculture as a result of its decision to invest in cereals, he elaborated.

Mentioning the other potential areas available for Saudi investment, Meles said the manufacturing sector is promising, especially textiles, leather, leather products and iron bars. In fact, all sectors of manufacturing are open. Investment in infrastructure is also something we are looking for. Real estate development and particularly the hospitality sector including hotels and tourist places, as well as agriculture and agro-processing industries are among the other potential areas, he further pointed out.

With regard to the existing level of trade and investment between the two countries, he said Saudi Arabia is one of the top three trading partners of Ethiopia. ''Our trade volume is one billion USD, although much of the trade balance is in favor of the kingdom. The trade gap is about half a billion dollars. We mostly import oil and petroleum products and export coffee,meat and other agricultural products. About 240 Saudi companies have been given investment licenses. These companies including those who are operational are expected to invest 2.5 billion USD. Saudi Arabia is our very important investment partner. Economically, we have solid and fast growing relations.''

Expressing the impact of rising oil prices, Meles said, the dramatic increase in oil price has hit Ethiopia very hard. '' Our oil import bill over the past three years has increased by over a billion dollars. This amounts to three percent of our GDP. That has upset our balance of payment very significantly. It has created a huge pressure on our balance of payment and complicated the inflationary issue. We are trying to tackle this problem by increasing our exports so that we can pay for our increased import bill, and improving agricultural production so that we can dampen our food prices. We are importing some food from abroad to check the rising trend of our agricultural prices. We are importing wheat. We are no doubt growing wheat but due to an inflationary pressure we are bringing more wheat from abroad to flood the market so that the rising trend of prices in the country can be checked,'' he added

In view of the benefit of the high–level exchange of business visits, Meles said, ''we have had frequent exchanges by leaders at high levels. My assessment is that these high level visits have contributed a lot to the fast growing economic partnership and contributed a lot to the political understanding that we currently enjoy.I expect such exchanges to continue. We are expecting a high level ministerial delegation to visit us in October. I would expect a similar high-level visit from Ethiopia to Saudi Arabia,'' he concluded.