Agroup of private Saudi investors plans to invest 375 million riyals ($100 million) to plant wheat, barley and rice in Ethiopia, one of the investors said.
The three investors met Ethiopian Prime Minister Meles Zenawi late last month, Mohamed al-Musallam, who chairs Dar Misc Economic and Administrative Consultancy firm, told Reuters.
“They approved to lease us the farmland. They will exempt us from paying taxes and lease fees in the first years of production and they will allow us to export all our production,” Musallam told Reuters.
Food security has topped the policy agenda in the Gulf Arab region following rampant inflation in 2008 that underscored the peninsula’s dependence on imports and forced countries to invest abroad to ensure supplies of staples like rice and wheat.
The three investors are setting up a company that will lead the investment. “We have opted for rice, barley and wheat because they are among the crops covered by the (Saudi) government’s strategic food security program,” he said.
The other investors involved in the project are Yassine al-Jafri and Khaled Zeiny.
Saudi Arabia has urged companies to invest in farm projects abroad after deciding last year to reduce wheat production by 12.5 per cent per year, abandoning a 30-year-old program to grow its own, which achieved self-sufficiency but depleted the desert kingdom’s scarce water supplies.
State-owned Saudi Industrial Development Fund is granting financing facilities to firms exploring agricultural investments abroad.
Saudi investors launched agricultural projects in Indonesia worth $1.3 billion last year.