Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
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The principal lesson to be taken from the Ethiopian experience is that ambitious investment
objectives must not be allowed to outrun a government’s capacity to oversee and regulate such
investments, especially in the agricultural sector, where environmental and social vulnerability
is especially acute. By retooling its agricultural investment policies in favour of more gradual
development and concessions that involve, at least in the first instance, smaller tracts of land,
Ethiopia may lose some investment to other countries that remain willing to lease out hundreds
of thousands of hectares at a time, at concessionary prices. Revocation or termination of certain
investors’ concessions have undoubtedly damaged Ethiopia’s image as a welcoming
environment for investment.