The Ethiopian Agriculture Business Corporation (EABC) has dismissed complaints regarding the fertilizer procurement process, despite the country allocating over one billion dollars annually to acquire various types of fertilizer.
Recent changes to the bidding process have raised concerns among international suppliers.
EABC has shortened the bidding period from 45 days to just two weeks, which some companies claim is too brief and undermines transparency. They argue that this compressed timeline seems designed to limit competition, favoring only a select few suppliers.
“The current bidding process appears predetermined to restrict participation,” some suppliers told Capital. “While we understand the necessity for swift procurement of this strategic commodity, a two-week window is often insufficient to arrange bid security. A more reasonable timeframe would foster greater transparency and attract more competitive offers.”
These suppliers also stated that major global companies are interested in participating but are deterred by the tight schedule, despite their ability to provide fertilizers at competitive rates.
EABC has rejected these complaints, asserting that the new procurement directive, implemented in October 2023, was introduced under government guidance to enhance efficiency.
Gashaw Aychiluhim, EABC’s Head of Corporate Communication and Social Affairs, explained that the 15-day bidding period aligns with practices in other countries, given the high volatility of fertilizer prices.
“The shorter timeframe is not unique to Ethiopia,” Gashaw told Capital, referencing the new directive issued by the Ministry of Finance. “Many nations procure fertilizers within two weeks due to market fluctuations. Companies must adapt to the given schedule if they wish to compete.”
He also emphasized that EABC operates under strong oversight, with high-ranking officials on its board, including Agriculture Minister Girma Amentie (Chair), Transport and Logistics Minister Alemu Semie, Cabinet Affairs Minister Alemtsehay Paulos, and National Bank of Ethiopia Governor Mamo Esemelealem Miheretu.
Gashaw encouraged dissatisfied bidders to formally raise their concerns with EABC’s leadership.
As a subsidiary of Ethiopian Investment Holdings, EABC plays a crucial role in supplying agricultural inputs and marketing within the sector.
This year, Ethiopia plans to import over 25 million quintals of fertilizer, costing more than one billion dollars, for the 2024/25 harvest season.
Meanwhile, the government has announced plans to reduce reliance on imports by establishing a domestic fertilizer industry. Prime Minister Abiy Ahmed recently declared that a USD 3 billion fertilizer complex will be Ethiopia’s next flagship project, following the Grand Ethiopian Renaissance Dam (GERD), which is expected to officially inaugurate in the third quarter of 2025.
While the government prefers private sector-led development of the fertilizer plant, it is open to public-private partnerships or full state funding if private investment falls short.
This initiative aims to leverage Ethiopia’s natural resources to cut import costs and strengthen the agricultural sector, a cornerstone of the nation’s economy.
As Ethiopia advances with these plans, the debate over procurement transparency and efficiency remains a critical issue for both international suppliers and local stakeholders.
