@FAOEthiopia – Ethiopian Business Review

Five leading Ethiopian insurance companies, Abay Insurance, Africa Insurance, Ethiopian Insurance Corporation, Nyala Insurance and Oromia Insurance have launched the Agricultural Insurance Consortium of Ethiopia in partnership with Pula Advisors, targeting 3 million farmers in 2026 only. The new platform brings together government institutions, insurers and technology partners in a coordinated effort to protect 12 million smallholder farmers from climate-related risks.

The launch received strong endorsement from key government stakeholders, including Semereta Sewasew, State Minister of Finance for Economic Cooperation, and Belay Tulu, Director of the Insurance Supervision Directorate at the National Bank of Ethiopia, alongside other officials, development partners, and farmer representatives. A major announcement during the event was the commitment to expand index-based insurance coverage to three million farmers by 2026 through joint efforts.

Belay said that the government is frustrated with funding and overseeing “short-lived projects” and stressed that financial inclusion remains a core responsibility of the government.

Despite significant government investments and efforts to expand agricultural insurance through extension services and targeted programs, the sector continues to face three critical challenges: affordability and product design, limited farmer awareness, and underutilization of technology. The Agricultural Insurance Consortium of Ethiopia was launched in light of these major issues. Over recent years, Pula Advisors, in close collaboration with the Agricultural Transformation Institute, regional agriculture bureaus, and key development partners such as World Food Program (WFP) and KfW, has made significant progress in building a more resilient system. Together, they developed effective insurance products, improved distribution channels, and reached nearly one million farmers across multiple regions.

Building on this momentum, the Ministry of Agriculture, supported by UNDP and JICA, established a Rural Financial Services Unit to scale these initiatives nationwide. The newly launched Consortium directly addresses these barriers by uniting insurers, government institutions, and technology partners to develop affordable insurance models, enhance farmer education, and leverage cutting-edge digital tools.

The Consortium has improved affordability by introducing a bundled insurance model linked to the government’s Input Voucher System, significantly lowering premiums through risk pooling and covering over 10 million farmers across more than 200 woredas at a low cost of ETB 200. To raise awareness, it is investing in extensive farmer engagement through training, nationwide roadshows, SMS, IVR messaging, and collaboration with government extension agents to integrate insurance education into existing advisory services.

On the technology front, the Consortium uses Pula Advisors’ advanced digital tools, Mavuno for real-time, AI-powered data collection and PIE for intelligent product design and policy management, supporting efficient, data-driven insurance delivery across members. Additionally, the Consortium promotes collaboration and risk-sharing among insurers, standardizes products, and improves operational efficiency to reduce costs, enhance underwriting accuracy, and build farmer trust, ultimately establishing a modern, inclusive, and resilient agricultural insurance system tailored to farmers’ needs.

“Ethiopia’s insurance sector has limited technical expertise to advance agricultural insurance. We have now partnered with five local insurers who are working together to strengthen agricultural insurance by creating a shared platform,” said Dagmawi Haileyesus, the Country Director for Ethiopia.

As part of today’s event, the consortium launched its first product, “Le-Sebele”-an Area Yield Index Insurance solution. This comprehensive coverage is designed to protect farmers against systemic risks that can lead to reductions in harvests. It covers key perils such as drought, excessive rainfall, pests, and diseases, among others. The model has already been successfully implemented across three regions and over 200 woredas in Ethiopia, demonstrating its effectiveness and scalability in Ethiopia’s diverse agricultural landscape.

Agriculture accounts for one-third of Ethiopia’s GDP and employs 85% of its population, yet over 95% of smallholder farmers lack formal crop insurance. Recurrent droughts and erratic rains force families to sell assets, deplete savings, or rely on aid. The AICE aims to break this cycle by scaling affordable, technology-driven insurance that stabilizes incomes, unlocks credit, and encourages adoption of productivity-enhancing inputs like fertilizers and improved seeds.

A newly released 22-year economic assessment by the Ethiopian Economics Association (EEA) has revealed that Ethiopia’s total public debt has surged to USD 62.5 billion, triggering renewed concerns over fiscal sustainability and the country’s broader economic trajectory. The report, which comprehensively reviews the nation’s economic performance and governance from 2001 to 2023, delivers a stark warning about the consequences of weak macroeconomic management, civil conflict, and slowing growth.

The 2025 edition of the assessment marks a turning point in methodology and depth, employing standardized and rigorous analytical tools to examine sectoral performance with greater consistency than previous editions. According to the findings, Ethiopia’s economic expansion has slowed considerably since 2016. Both gross domestic product (GDP) and GDP per capita have declined, signaling a reversal from the high-growth period of the 2000s and early 2010s. Inflation has accelerated during the same period, eroding purchasing power and weakening macroeconomic stability. Investment activity has also contracted, while the country’s productive capacity, which expanded until 2019, has since plateaued—limiting opportunities to enhance output and improve livelihoods.

The agricultural sector, historically the backbone of Ethiopia’s economy, has seen a steady decline in its share of GDP, particularly after 2004/05, as the service sector gained prominence. Despite its critical importance, fertilizer usage in the country remains far below international standards, and only 7.8 percent of total loans issued over the past two decades have supported agriculture. The consequences of this underinvestment have become evident in the nation’s food security. From 2020 to 2022, more than 21 percent of Ethiopians experienced food insecurity, with rural communities bearing the greatest burden.

The report also paints a grim picture of the manufacturing sector. In 2023, industrial output accounted for only 4.48 percent of GDP—well below the global average of 12.33 percent. Its contribution to employment was equally modest, at just 6.47 percent. Although import substitution efforts have yielded limited results, progress remains constrained by persistent shortages of raw materials and unreliable utility services. The report notes that challenges in electricity and water supply continue to limit productivity.

Ethiopia’s financial sector, described as shallow and underdeveloped, is struggling to support structural transformation. Credit allocation remains skewed toward non-productive areas, with key sectors like agriculture and industry often bypassed. While financial inclusion has improved overall, significant disparities remain between urban and rural populations, as well as between men and women.

On the fiscal side, government revenues have grown by over 200 percent in nominal terms between 2002 and 2022. However, these gains have been offset by rising inflation, which has reduced the real value of public spending. The country’s debt burden now equates to USD 575.6 per capita. With high levels of debt stress and an underperforming export sector, the report urges the government to improve revenue mobilization and expand foreign currency earnings.

Poverty trends also reveal troubling setbacks. Although the poverty rate dropped from 30.9 percent in 2018/19 to 26.1 percent in 2021/22, it remains higher than the 24 percent recorded in 2015/16. The poorest households have experienced the sharpest decline in living standards, worsened by inflation and recurring conflict.

Governance issues are another central concern. Since 2020, the report observes a deterioration in public trust and governance, contributing to increased unpredictability, internal conflict, and weak economic oversight. The erosion of investor confidence, rising unemployment, and stagnation in growth are all linked to prolonged instability and institutional weakness.

To address these challenges, the EEA emphasizes the need for consistent, prudent, and well-coordinated development policies. It advocates for stronger governance systems, renewed efforts to restore investor confidence, and the integration of peace-building initiatives into national development planning. In particular, the report recommends reallocating public spending towards long-term capital investment, broadening the tax base in a non-inflationary manner, and designing more inclusive financial policies.

Holland Dairy has launched a milestone product: a premium-quality cheese made exclusively from fresh, locally sourced Ethiopian milk and developed with cutting-edge Dutch cheese-making technology. The new cheese is set to redefine standards for locally made dairy products and position Ethiopia as an emerging player in Africa’s premium cheese market.

The product was unveiled today during a high-level ceremony at the Hyatt Regency Hotel in Addis Ababa, attended by government officials, agricultural partners, diplomats, media, and senior business leaders from both Ethiopia and the Netherlands. The launch signals Holland Dairy’s continued commitment to local sourcing, farmer empowerment, and international-quality processing — all while staying rooted in Ethiopia’s growing agricultural economy.

Blending the richness of Ethiopian milk with Dutch precision, the new cheese exemplifies the potential of cross-border collaboration in food processing and agribusiness. According to the company, this is more than just a product launch — it’s a strategic investment in Ethiopia’s dairy sector, which has long sought innovations that balance quality with affordability.

“We believe in the power of local,” said Jean-Paul Rieu, Commercial Director at Holland Dairy. “By partnering with more than 4,000 Ethiopian dairy farmers, we ensure the highest milk quality. With advanced Dutch technology, we now transform that milk into a cheese we believe can rival any on the African continent — and beyond.”

Event highlights included a live tasting of the cheese, paired with both local and global culinary elements, and a virtual tour of Holland Dairy’s newly upgraded facilities, offering guests an inside look at the advanced machinery powering Ethiopia’s cheese renaissance. The event also paid tribute to the smallholder farmers and technical experts whose contributions made the innovation possible.

More than a premium offering, the new cheese strengthens the company’s support for Ethiopia’s domestic value chain. By sourcing exclusively from local farmers and processing within the country, Holland Dairy not only reduces reliance on imports but also creates high-value jobs, boosts foreign exchange potential, and enhances food sovereignty.

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Heineken Ethiopia, in partnership with Mahibere Hiwot for Social Development (MSD), officially handed over a new ETB 33 million animal fattening and food processing project today. The initiative is designed to uplift impoverished households in Kilinto and Koye Fetche through sustainable, livestock-based, and small-business income generation schemes.

Targeting 75 households—30 in Kilinto and 45 in Koye Fetche—the project aims to bolster grassroots livelihoods by integrating communities into profitable agricultural value chains. Beneficiaries will engage in animal fattening, dairy production, poultry farming, and small-scale agribusinesses, sectors that remain essential for local food security and economic resilience.

Speaking at the launch ceremony, Heineken Ethiopia’s Managing Director, Bart De Keninck emphasized the transformative impact of livestock farming on rural and peri-urban communities. They pledged continued support through technical training, market linkages, and sustainable management practices to ensure the project’s long-term success.

The multi-pronged initiative provides selected households with livestock, feed, veterinary services, training in food processing, and business development skills. It places a strong emphasis on empowering women, female-headed households, and people with disabilities, identified through a collaborative selection process involving Heineken, MSD, community members, and local government representatives.

Beyond economic upliftment, the project seeks to strengthen social cohesion and nurture local entrepreneurship, with Heineken pledging continued support through technical capacity building, market linkages, and the promotion of sustainable farming practices.

Ethiopia’s livestock and fisheries sector has made remarkable strides in recent years, with the National Livestock Development Program driving significant improvements. Among the most notable achievements, the country’s egg production has surged from 3.2 billion to 9.1 billion in just four years, demonstrating the effectiveness of targeted agricultural policies, as reported by Ministry of Agriculture.

The program, officially launched on November 03, 2022, by Prime Minister Abiy Ahmed (PhD) in Arba Minch, aims to ensure food security, enhance domestic livestock production, reduce imports, and boost foreign exchange earnings. Minister of Agriculture Girma Amente (PhD) highlighted these achievements during the inauguration of the National Multi-Purpose Dairy Development Training Center in Holeta, a facility backed by the World Bank to train 20,000 dairy technicians and expand farmer support services.

The rapid increase in egg production is part of broader sectoral growth. Cow milk production has risen from 5.8 billion to 10.3 billion liters, chicken meat production has expanded from 90,000 to 240,000 tons, and honey output has nearly doubled to 296,000 tons. The success of these initiatives has prompted a reassessment of future targets to sustain momentum.

A major driver behind this growth is Ethiopia’s expanding artificial insemination capacity, which has jumped from 500,000 to 3 million procedures in just two years, resulting in 1.7 million improved calves born in the last eight months alone. Additionally, eight new Liquid Nitrogen Centers are being established to ensure a stable supply for breeding programs.

The poultry sector has also seen significant advancements. Initially, Ethiopia distributed only 26 million one-day-old chicks annually. Following government intervention, this figure rose to 41 million, and with the establishment of the Grand Parent Stock Center by MIDROC Investment Group and the Ministry of Agriculture, the country now has the capacity to produce 100 million chicks per year. So far, 85 million chicks have been distributed in the past eight months, with plans to reach 150 million by year-end.

Other key developments include the introduction of 1,994 modern beehives and a shift toward fish farming in artificial ponds. Previously reliant on lakes and rivers, farmers now raise fish in controlled environments, with 7.6 million fish fingerlings distributed in just eight months.

The Ministry of Agriculture is prioritizing knowledge-driven development to sustain these gains. The Holeta-based training center will not only equip technicians but also empower model farmers and pastoralists, ensuring long-term growth in the sector. Research institutions and animal development centers are also being urged to collaborate with local communities to maximize impact.

Five Ethiopian Insurers Launch Consortium to Protect Millions of Farmers from Climate Risks

Ethiopia’s Public Debt Hits USD 62.5 Billion as New Report Sounds Alarm on Economic Stability

Holland Dairy Launches Ethiopia’s New Flagship Premium Cheese

Heineken Ethiopia Launches ETB 33 Million Livelihood Project to Empower Vulnerable Families in Kilinto and Koye Fetche

National Livestock Program Boosts Egg Production from 3.2 Billion to 9.1 Billion