The Ethiopian government has agreed to lease 20,000 hectares of land in the northern Afar region to Egypt for commercial farming purposes, the English-language business weekly newspaper Capital Ethiopia reports.

The agreement comes on the heels of similar deals with the government of neighbouring Djibouti, which has leased 3,000 hectares of commercial farmland in the Oromia region south of Addis Ababa, Karuturi Global, an Indian agriculture company, and Saudi Star, the company established by Ethiopia-based Saudi billionaire Sheik Mohamed Al Amoudi.

Ethiopia has set aside up to four million acres of fertile farming land for lease by foreign investors according to a report in the Washington Post. The investors are expected to use the land either to mitigate food shortages in their own countries or for export, although Karuturi has said that it will keep its produce in the region.

Proponents of the initiative argue that it will increase local food availability and create jobs, as well as introducing seed and new farming techniques to the country. Critics argue that it is tantamount to subtracting crucial resources from the people who need it most. Despite having vast areas of fertile farming land Ethiopia remains dependent on imports to meet its food needs and nearly half its population of 80 million is thought to be malnourished according to Oxfam/FAO figures.

The agreement with Egypt is part of a broad programme for greater economic cooperation between Ethiopia and the north African country.