The new coffee strategy and roadmap aim to position Ethiopia as the world’s second-largest coffee bean exporter within eight years, while also increasing the country’s hard currency revenues by more than six times.
Ethiopia, known as the birthplace of coffee and home to over 10,000 distinct varieties, currently earns relatively little from this vital industry, despite coffee being one of the most traded commodities globally.
Since coffee was first discovered in the ninth century in Keffa, located in western Ethiopia, it has been marketed internationally and is commonly regarded as the second most traded commodity by volume, following crude oil.
The coffee industry supports at least 20% of the Ethiopian population and is a crucial source of hard currency from exports. However, analysts argue that the sector remains underdeveloped, largely due to neglect by the EPRDF administration and the absence of an independent regulatory agency.
The Ethiopian Coffee and Tea Authority (ECTA), established in 2016, has initiated several projects to promote the marketing and development of the coffee industry.
Since 2019, particularly under the current central government administration in the Oromia region—Ethiopia’s largest coffee producer—numerous initiatives have been introduced to revitalize aged coffee trees, many of which have exceeded 45 years of age. Millions of coffee seedlings have been planted across the country in recent years, reflecting a strong commitment to sector growth.
Prime Minister Abiy Ahmed has projected that Ethiopia will rank among the top coffee exporters in the coming years.
About a year and a half ago, he expressed confidence that Ethiopia would become the third-largest coffee exporter within three years.
According to ECTA’s recently released Coffee Sector Transformation Strategy, Ethiopia is expected to become the second-largest producer and exporter of coffee by 2033.
The strategy outlines a roadmap indicating that the area dedicated to coffee plantations will more than double by that year, increasing from an estimated 2.2 million hectares this year to 4.7 million hectares by 2033.
Productivity is also anticipated to rise, with yields expected to increase from 7.5 quintals per hectare in 2024 to 15 quintals per hectare. This will result in a projected 433% increase in total annual production, reaching 4.4 million tons compared to 833,000 tons in the previous budget year.
The roadmap further indicates that the export volume of green coffee beans, both washed and unwashed, is expected to rise from 298,000 tons in the previous budget year to over 2.2 million tons, marking a 645% increase relative to the 2023/24 budget year.
By 2031, it is anticipated that half of Ethiopia’s total coffee output will be exported.
Interestingly, Ethiopia’s coffee industry is unique in that it is not only the origin of the coffee tree but also the largest consumer of the commodity. For instance, in the 2023/24 budget year, which ended on July 7, 2024, 64% of the annual coffee production was consumed domestically.
Despite being the country’s primary source of foreign exchange, the volume of coffee exports remains low due to strong local consumption.
The strategic document highlights the increasing demand for premium coffee as a promising opportunity for the Ethiopian coffee industry.
It emphasizes the government’s commitment to establishing a responsible organization within the industry and its efforts to enhance growth through agricultural initiatives and improved marketing strategies. These efforts are expected to create more opportunities for a bright future in the coffee sector.
The new strategic plan aims to expand the industry through technology-driven commerce and digital agriculture initiatives. It anticipates that significant export earnings in the coming years will enhance productivity, supported by high-quality, value-added products.
Key factors considered in the document include ensuring fair prices to boost revenue, as well as promotional initiatives that showcase Ethiopia’s vast potential for specialty coffee and competitive value-added products, which are crucial for increasing export earnings.
Beyond agricultural and commercial advantages, the document acknowledges the broader economic benefits of the sector. It states that promoting coffee tourism and fostering Ethiopian coffee culture are vital to maximizing the industry’s economic impact.
According to the new agreement, several regulatory frameworks will be implemented to achieve goals within the coffee sector, which contributes up to 4% of the country’s GDP and supports around five million growers.
The sector is also responsible for up to one-third of hard currency earnings from agricultural exports.
The report highlights Ethiopia’s significant potential to generate substantial revenue from coffee due to the growing global demand for specialty coffee. The country’s genetic resources, encompassing 11,691 Arabica coffee germplasm accessions, are identified as a key strength of the Ethiopian coffee industry.
The core concepts of the strategy include strengthening sector players, particularly coffee unions, enhancing quality and sustainability, building a strong brand, promoting coffee culture and tourism, and expanding research initiatives—all aimed at achieving strategic objectives.
According to the strategic document, farmers have received 49 improved seeds, including nine hybrids and 40 selections, with a plan to increase this number to 60 by 2032.
It notes that a significant weakness in sector growth is the insufficient on-the-ground efforts.
The document states, “Ethiopian coffee quality and its diverse range of varieties are extraordinarily preferred in the global market,” citing the high-quality output and growing demand for specialty coffee as a major strength for the future.
By 2033, the strategy projects that Ethiopia’s exports of green coffee could generate USD 10.4 billion. The volume of coffee exports and the country’s hard currency earnings have risen in recent years. This new goal represents a target of more than six times the previous year’s earnings of USD 1.4 billion.
Adugna Debela, Director General of ECTA, remarked on the publication, “The strategy and roadmap demonstrate our eagerness to elevate the Ethiopian coffee industry and position Ethiopia as a leading, competitive coffee producer alongside countries like Brazil and Vietnam.”
Brazil is currently the world’s largest coffee producer and exporter, followed by Vietnam and Colombia. With a 4% market share, Ethiopia is the leading coffee producer in Africa and ranks seventh globally.
The World Bank recently reported that due to infrequent tree trimming, approximately 80% of Ethiopia’s one million hectares of coffee trees are underproductive.
A paper from a few years ago asserts that the problem lies not in the quality of Ethiopian coffee. Approximately 95% of the country’s diverse coffee varietals are produced organically, traditionally without fertilizers or pesticides. Demand is also not an issue.
However, the study questions why Ethiopia’s coffee output lags behind that of other leading coffee-producing countries such as Brazil, Colombia, Indonesia, and Vietnam. It identifies a lack of proper pruning as the primary cause of this shortfall.
The World Bank highlights that millions of smallholder farmers, who depend on coffee production for their livelihoods, face significant challenges due to the low yields of Ethiopia’s coffee plants.
To ensure robust production from coffee fields, the new initiative has focused on critical areas of improvement. Analysts note that Ethiopian coffee cultivation is attracting private sector investment, a trend that began before the 1974 revolution when the Derg, a communist military regime, nationalized several industries.
They emphasize that “one of the key areas to achieve the goals set by the authorities will be the role of the private sector.”
