Policy Incentives and Agribusiness Investment in Ethiopia: Benefit or Deadweight?

Abstract

The importance of agriculture to the Ethiopian economy is underlined by the country’s forthright promotion of investment in agriculture since the turn of the century, but how effective has this investment really been? This brief summarises the findings and conclusions of the APRA study ‘Policy approaches to business investment in agricultural commercialisation in Ethiopia’. It then looks at the main drivers of agribusiness investment, usefulness of the tax privilege system, the effectiveness of agricultural growth programmes led by donors and non-profit organisations. The brief also addresses whether or not the enforcement of rules and closure of loopholes can prevent the misuse of tax privileges.