The fast growing agro-processing industry in Ethiopia is facing a major packaging shortage, a government official said last week.

“Even though agro-processing has been growing rapidly in the past few years, the packaging industry is lagging behind,” said Mebratu Meles, State Minister of Industry, while speaking to delegates from German companies that specialise in foodstuff packaging.

The government has been promoting investment in agro-processing as a key sector as about 80 per cent of its 97 million people are dependant on it and it contributes about 40 per cent of the country’s GDP.

“We aim to be the leader in manufacturing industries in Africa. As part of transforming our agriculture, we divided the country into 17 agro-processing corridors and we plan to start construction of another four by October,” said Prof Mebratu.

In the past two decades, investors have been attracted to the agro-processing sector because the government offers incentives such as tax free import of machineries and export duty exemptions; cheap labour and access to partial initial investment loans from the government bank without collateral.

Statistics from the federal Ethiopian Investment Commission show that over 11,000 foreign investors and local and foreign joint ventures were registered as investors in agro processing in the country between 1994 and July 2015.

However, at least half of those registered are not fully operational and those that are, import ready-made packaging.

The German embassy in Ethiopia, Ethiopian Chamber of Commerce and Sectoral Association and Ethiopia Invest (a private trade promotion company) are currently hosting 17 German companies that specialise in manufacturing and supply of food processing and packaging machinery.

According to Estifanos Samuel, director of Ethiopia Invest, the representatives of the German food processing and packaging machinery manufacturers will be in Addis Ababa for a week displaying their products.