Region awaits damage assessment results
The turmoil in Amhara is taking a toll on the region’s horticulture industry, leaving several top farms scrambling to get back in the growing game.
Five major export farms located near Bahir Dar – Bayu Fresh, Bahir Dar Fresh, Alpha Flora, Tana Flora, Asparagus and Gage – have submitted pleas to the Ethiopian Investment Commission (EIC) claiming they suffered “hundreds of millions in losses.”
The Ethiopian Horticulture Producer Exporters Association (EHPEA) submitted a report to the EIC outlining recurring attacks on farms in the region.
On behalf of the affected farms, the Association outlined seven key issues for the Commission to address. They have asked for an independent damage assessor, compensation, incentives, a task force establishment, improved security, a timeline for response, and a written commitment from the government, as a way forward.
The investors are requesting an independent assessor be assigned to accurately determine the scope of destruction and prevent under or over estimation when compensation is determined. According to attacks reported last July, trucks, vehicles, machinery, irrigation systems, water pumps, and buildings have been fully destroyed, according to the paper.
“We are conducting our own assessment of the overall destruction to our farms,” EHPEA Executive Director Tewodros Zewdie, says. “But we want the government to establish an independent assessor to help both sides agree on the scope of damage.”
Tewodros claims investors were informed about an ongoing damage assessment conducted by the government, “Though findings haven’t yet been communicated.”
Deputy Head of Amhara’s Industry and Investment Bureau Yohannes Amare told The Reporter that a specialized team, consisting of representatives from the Ministry of Agriculture, Ministry of Finance, and led by the EIC, had been dispatched to the affected areas two weeks ago.
“They have collected all the necessary data and inspected damaged horticulture investments and farms, including those under construction,” he said.
However, Yohannes disputed the Association’s figure of six affected exporters, saying “only one was exporting.” He mentioned that the regional government is eagerly awaiting the findings of the federal investment team.
Federal government and the Amhara regional state has assembled a separate team of experts from various bureaus and institutions involved in the regions investments. This team includes experts from the Bureaus of Urban and Infrastructure, Land Administration, and Industry and Investment. The aim is to conduct an independent damage assessment, which will guide the state cabinet in determining the way forward.
“As far as interests go, we also aspire to complete our work as fast as humanly possible. But, one has considered the restraints of the tensions in our state impose, holding us back,” Yohannes said.
The Association has called on the federal government to swiftly compensate for the losses incurred during the recent attack and looting. In the paper submitted to the EIC, the Association emphasized that the damages have resulted in significant financial losses, including the loss of income, time, energy, and morale.
It also requested the government to provide additional funding, which could be deducted from the compensations granted to the affected farms.
A high-ranking government source, speaking to The Reporter, stated, “The government cannot confirm whether or not it will grant the requested compensations since the team that conducted the assessment is yet to present its findings for the EIC’s decision.”
However, experts in the investment and insurance sectors believe that the chances of the government providing indemnity are highly unlikely.
Meherteab Leul, a seasoned investment law expert, explained, “Producing exporters can only compel the government to pay compensation if they had established a Bilateral Investment Treaty (BIT) beforehand.”
BIT’s outline terms and conditions for private investments made by individuals and companies from one country to another.
Out of the six reportedly looted and vandalized farms, four are owned by investors from Chile, Holland, England, and Belgium, while the remaining two are owned by Ethiopian investors.
“Unless these export farms had established BITs, they cannot hold the Ethiopian government responsible for compensation. All they can do is ask,” clarified Meherteab.
Tewodros says that the investors did not have BITs or any other written agreements that could legally obligate the Ethiopian government to provide indemnification.
He added, “Ensuring peace and security is the primary duty of any government. We are seeking compensation on the grounds that the government failed to fulfill its duty, resulting in the loss of almost all our investments.”
Insurance expert Sessen Yilma argues that the government cannot handle this issue solely based on goodwill.
“While creating a safe environment for all investments is the government’s responsibility, compensating these exporters would set a costly precedent for other companies that have suffered losses in various conflicts across the country,” explained Sessen.
The Association’s request to the EIC extends beyond compensations.
They are also demanding privileges of duty-free import rights to replace and repair the looted and vandalized properties.
The five exporters whose operations have been damaged claim to be at a crossroads. They are demanding a clear timeline from the EIC regarding the indemnity they hope to receive, as they contemplate whether to restart their operations or cease altogether.
Fighting broke out between the federal government and Fano, an informal armed group. A State of Emergency in Amhara region was introduced as a result, in the first week of August 2023, with the possibility of extending it to other regions. The region, accounting for 22 percent of the national Gross Domestic Product (GDP), reported 2.3 billion birr worth of damages to investments between April and August 2023.