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Ethiopia: investment in spices

spices investment opportunity reportA series of Business Opportunity Reports was presented at the first Ethio-Netherlands Business Event in the Netherlands, on 5 November 2015. The report on Investment opportunities in the Ethiopian spices sub-sector was prepared by Sjoerd Herms, Senior Business Adviser at Advance Consulting.

There is great potential for Ethiopian spices in the EU market, because of high prices and sustained shortages. Growth for spices in this market with over 500 million consumers is predicted to remain steady, and growing domestic demand for spices in China and India will lead to less exports to the EU from these countries.

These developments provide opportunities for Ethiopia, which has a significant comparative advantage over the main global market players (China, India, Turkey and Pakistan) given the availability of abundant and affordable labour that can translate in cost savings of more than 50%. Ethiopia is also geographically better located, closer to the EU than the major spice-producing countries India, China, Vietnam, Indonesia and Pakistan.

In addition, Ethiopia has extensive experience in spice production. Its 90 million inhabitants are one of the largest consumers of spices in Africa, and are able to absorb lower quality products at attractive prices for most spices. Land is available in Ethiopia with the appropriate climate, water resources and soils for spice cultivation, and a conducive investment policy that promotes foreign direct investments by means of income tax exemption, import duty exemption and allowance for losses carried forward.

Are you interested in investing in Ethiopia? Contact Sjoerd Herms for a free assessment on whether your business idea might qualify for additional financing through grant or other financing programmes in the context of combining aid and trade.