| Foreign Direct Investment (FDI) in relating to agricultural land investment is a hot issue in Africa recently. More than20countries in Africa have been engaged in to this business by updating their land policy to the system. Similarly Ethiopia has designed a new policy and strategy which is so suitable to the investors in the area. Many local and foreign companies already invest jointly or as a sole company. This research particularly focuses on foreign investors who have been engaged in to agricultural land investment in Ethiopia.The Ethiopian government gets ready three million hectare of arable land for this investment. From this land size till January16,2012, the government of Ethiopia hands over380,000hectare of arable land to investors based on average50years lease agreements. According to Fetehe magazine January20,2012, the average annual rent per year is Ethiopian birr111or USD6.43(based exchange rate1=17.26).This investment opportunity raises different debates among the politicians and local people. For this reason, it is a hot agenda in specifically Ethiopia as well as in Africa by large. Due to this reason. Foreign Direct Investment (FDI) related to Agricultural Land Development (ALD) in Ethiopia becomes the main focus in this research.The main objective of the research is to show a way in order to keep the core national interest of the country-Ethiopia through identifying and evaluating the implementation of ALD through ten key variables (10S):Scale of investment, Size of capital introduced, Special interest of the investment, Sovereignty affected by the investment, Security of food supply, Success in technology transfer, Standard labor cost, Situation on targeted market, Socio-environmental impact, and Settlement on lease period. The term10S derived from the first letter’S’of each ten key variables listed above. The significance of this research can be seen from two perspectives:theoretical and practical. The theoretical view of this research is to introduce10S-Model (New Model) relating to Investment on Agricultural Land Development (IoALD) by Foreigners for Countries in which their GDP laid on Agriculture and already engaged in to such business-like Ethiopia, and other more than30countries in the world.The practical view of this research is to help countries like Ethiopia, Sudan, Kenya, Nigeria, Tanzania, Malawi, Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra Leone, Ghana and other non African countries, which implement arable land lease policy and strategy, in order to evaluate the implementation of their Agricultural Land Lease projects for foreigners using the new10S-Model. This model can help them to revise their policy so as to assure the comparative advantage of their own countries and help to keep their investment in a healthy way.This research mainly discusses about Investment on Agricultural Land Development (IoALD) in Ethiopia by foreign investors as a case. And it tries to collect valid raw data from Ethiopia Investment Agency (EIA). Thus, the research set out one, but very important hypothesis:’There is expected to be a negative cumulative effect of FDI projects on Agricultural Land development (FDIoALD) in Ethiopia if it is measured using the10S-Model’. This hypothesis is already proved in chapter8.The new model-10S Model introduced using10key variables. These variables are selected after evaluated by749first degree economics students using online data collection method from different parts of the world. After realizing the validity of each ten key variables to evaluate the implementation of projects on agricultural land lease development,10S Model introduced in this research. The primary theoretical concept of10S-Model is sum up Cumulative Effects of Investment on Agricultural Land Development.Thus, by considering the above theoretical facts of10S-Model, this research tries to evaluate the Ethiopian FDI projects on Agricultural Land Development. According to this investigation, in Ethiopia there are7330licensed Foreign Direct Investment projects, since August22,1992to June23,2010. Among them5525projects are under pre-implementation. And523projects are under implementation and the rest1282projects are under operation. This research focuses on only projects under’operation’even from the total projects under’operation’, this research mainly focuses on FDI projects on Agricultural Land Development. These projects categories in to three main areas:FDI projects combination of agriculture&animal husbandry and others, FDI projects working on only animal husbandry&others and projects only on farming.However, only127projects (Since October291995to June23,2010), which are under operation on the fields of farming, are considered in this research. Therefore, after careful revising of the raw data obtained from Ethiopian Investment Agency,(July23,2012), based on10S-Model, the research found cumulative effect (value) of ’-0.37’And this value (result) shows that Ethiopia runs a ’Negative Result Oriented FDI projects on Agricultural Land Development’when critically evaluated those ten key variables:Scale of Investment, Size of Capital Introduced, Special Interest of the Investment, Sovereignty affected by the investment, Security of food supply, Success in technology transfer, Standard Labor Cost, Situation on targeted market, Socio-environmental Impact, and Settlement on lease period.This research believes that for the developing countries like Ethiopia, searching different development opportunities such as developing arable land lease policy and strategies is a healthy thinking by itself. However, since land is a limited resource of any country, there must be certain parameters like10S-Model in order to check and balance the overall effects of such projects, especially if the projects owed by foreign investors.Likewise, since the cumulative effects of FDI projects on Agricultural Land Development in Ethiopia which observed in this research (-0.37) shows that unless some adjustment made by the government there seems to be negative effect in the long run.Therefore, this research suggests that Ethiopia has to revise its arable land lease policy and strategy for foreign investors so as to assure a lifelong FDI advantages from the sector in the future. |
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