Ethiopia: Saudi Star Secures Additional 129 Hectares

Land in Ethiopia is state owned
Land in Ethiopia is state owned

Addis Ababa, Ethiopia: Saudi Star group, an agricultural company founded by the Saudi-Ethiopian business tycoon Mohammad Hussein AlAmoudi has succeeded in acquiring additional 129 hectares of arable land in the Gambela regional state in western Ethiopia two weeks ago. Though the company requested some 300,000 hectares in the region, The Ministry of Agriculture and Rural Development (MoARD), which has taken over vast agricultural land issues from regional land administration bureaus, approved the provisioning of 271,000 hectar land.

Director General of the company, Haile Assegidie, told The Reporter that as per the demand of the MoARD the company is working on the detailed business plan stipulating the timetable and the kinds of activities that would be undertaken on the lald. He also said that the company was completing prepations to float a tender to select a consultancy firm to put together the master plan of the project.

Previously, Saudi Star received 10,000 hectares of land in the Western Ethiopia region which, according to the director general, would be fully put to use in the current Ethiopian fiscal year, while the additional farm land is expected to be operational by next year, at the latest.

The overall plan of the company is to acquire a 500,000-hectar agricultural farm in Ethiopia, of which it has succeeded in obtaining 139,000 hectares so far. A bulk of one million tons of crop production per annum is the ultimate target of the company, according to Haile.

However, according to an agricultural professional was spoke to The Reporter, unless specialized inputs that improve the productivity of farmland are used in sufficient proportions in the projects, the planned one million tons of crop production annually on 500,000 hectares might not be achieved.

The company also has plans to start exporting rice products to Saudi Arabia no later that February from which it expects to gross USD one billion annually.

Out of the projected cost of the venture, which ranges from USD 3 to 5 billion, thus far USD 121 million has been spent on purchasing equipment and some  USD 32 million on the procurement of other necessary materials.

Land distribution in Ethiopia despite freeze

Despite the federal government’s decision to freeze land request around the country last month, Saudi Star and the Indian karuturi, both huge foreign agricultural companies, were able to secure sizable plots for their projects. Hence, some of the investors are saying that the move has left them confused.

A senior official with the ministry told The Reporter that rent-seeking behavior is the main reason for the decision of the government to suspend the provisioning of land but that this does not apply to the land that the ministry administers. He said that the ministry has been delegated by regional governments to administer their vast agricultural lands and that it has put in place a procedure that cannot be exploited by rent-seekers in Ethiopia.

Wudineh Zenebe, Reporter