Digital finance and agri-food value chains: Case studies from Ethiopia

Solomon Wassie

Research reports from International Food Policy Research Institute (IFPRI)

Abstract: Agriculture is of paramount importance to Ethiopia’s economy. Agriculture accounts for 40 percent of the country's GDP, 80 percent of export earnings, and employs 75 percent of the population (Tamene & Ali, 2022). Crop and livestock production account for roughly 65 percent and 25 percent of agricultural GDP, respectively (International Trade Administration, 2024). Cereals account for roughly 90 percent of total grain production. Teff, known for its gluten-free nutritional aspect, takes the leading share of cereals by production area (ESS 2022). Ethiopia is also the second-largest wheat producer in Africa, following South Africa, with an expansion potential of 1.3 million hectares (Senbeta & Worku, 2023). Coffee, a crop with high cultural and economic importance in Ethiopia, accounts for 30 percent of exports and 25 percent of total employment. Ethiopia stands as Africa's leading coffee producer and among the top five coffee producing nations worldwide (Tefera & Torry, 2023). Within Ethiopia’s overall agri-food system, most agricultural value chain activity fits the traditional definition, where subsistence farming dominates, postharvest value addition is minimal, and grain production constitutes the largest share (Barrett et al., 2022). However, some commodities in Ethiopia are progressing from traditional to transitional and modern value chains. The dairy value chain can be considered transitional, as it is characterized by a growing processing and logistics sector and emerging pre-urban supply chains (which disfavor remote regions with high production potential as they need more advanced logistics). The coffee value chain in Ethiopia can be considered as a modern value chain – i.e., characterized by product standardization and quality control aimed at the global market/export (Ambler et al., 2023; Barrett et al., 2022).

Keywords: agriculture; digital technology; agrifood systems; value chains; finance; Ethiopia; Africa; Eastern Africa; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2025-07-02
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