Brook Bekele
Since 2018, Ethiopia has embarked on a so-called economic transformation—a transformation that, if you squint hard enough, appears to be nothing more than a recipe for economic collapse. Under Abiy Ahmed’s leadership, the country has pursued lofty reforms—from IMF bailout deals and stock market inaugurations to sweeping domestic legal and banking regulations—that promised a new era of prosperity. Instead, what we see is a relentless descent into runaway inflation, crippling foreign exchange shortages, ballooning external debt, and a labyrinth of confusing laws that benefit no one but the elite. Not only this journey details these catastrophic missteps but does so with a generous helping of sarcasm, asking bluntly: Should you really vote for Abiy when the country’s economic policy seems designed to ruin lives?
- Introduction
Ethiopia once prided itself on being an emerging economic powerhouse in Africa. Since 2018, however, the country has been on a downward spiral—transforming its economic promise into a nightmare of mismanagement and lost opportunities. Abiy Ahmed’s administration has championed reforms that sound good on paper: market liberalization, public–private partnerships, and modern legal and financial regulations. Yet the reality is an economy plagued by rampant inflation, debilitating foreign exchange shortages, soaring external debt, and a constantly shifting legal landscape that confounds investors and citizens alike. And with an election looming, voters must ask: Is this the legacy we want to continue?
- Historical Context and Economic Reforms
The administration boldly declared the need to dismantle decades of state control and embrace a market economy. If by “embrace” one means throwing caution to the wind and hoping that deregulation magically cures inefficiency, then consider it a success. The so-called reforms promised private sector growth, increased foreign investment, and greater transparency. Instead, they ushered in a period marked by sporadic policy shifts and no clear vision—much like a startup with grand ideas but no business plan.
The government is an uncanny masterclass in begging for bailouts. In 2019, Ethiopia secured a multi-year Extended Credit Facility and Extended Fund Facility program with the International Monetary Fund. The goal was to stabilize the macroeconomy and restructure state-owned enterprises. Translation? “We’re out of money; please help us out!” The subsequent expansion of the facility in 2024 did little to hide the underlying fiscal vulnerabilities, as the government’s inability to manage its finances became ever more apparent. The Birr’s steep depreciation and soaring inflation are vivid reminders that no amount of IMF money can cover up systemic mismanagement.
Tip for voters: If you’re looking for fiscal responsibility, don’t expect it when your government is essentially on a perpetual bailout tour.
One other known pattern of the government is changing rules mid – game. In a bid to attract investors, the government has repeatedly overhauled domestic laws governing business, investment, and labor. While these legal reforms are touted as efforts to modernize Ethiopia’s legal framework, the constant tinkering has left entrepreneurs and citizens scratching their heads. One day, corporate governance laws encourage transparency; the next, new taxes and regulations emerge out of nowhere. The result is a legal system that’s as predictable as a coin toss.
Sarcastic aside: If you enjoy playing a never-ending game of “guess what the law is today,” then you’re in luck.
Reforms in the banking sector were meant to usher in modern, efficient financial management. Instead, Ethiopia’s financial institutions remain mired in bureaucratic red tape and outdated practices. New regulations intended to tighten supervision and boost transparency have done little more than add to the confusion. With state-owned banks struggling with non-performing loans and liquidity crises, the dream of a robust financial system is fading fast. The launch of the Ethiopian Securities Exchange in January 2025 was meant to be a beacon of progress, but it now stands as a monument to the government’s inability to create a stable, investor-friendly environment.
In short: The only thing modern about these reforms is the speed at which they’re failing.
- Sectoral Analysis: The Broken Backbone
Agriculture and rural economy is a tale of unfulfilled promises. It has long been the backbone of Ethiopia’s economy, yet reforms intended to modernize agro-processing and improve rural finance have largely missed the mark. Smallholder farmers remain trapped in outdated practices with little support from the state. Reforms addressing land tenure and rural credit have been introduced only to become tangled in bureaucratic inefficiencies—proving that even the most vital sector can’t escape the administration’s penchant for half-measures.
Need a laugh? The “modernization” of agriculture here is as effective as a broken plow.
The other dream built on shaky foundations is the manufacturing and industrial policy. Despite the government’s enthusiastic proclamations of industrial progress, the manufacturing sector is still struggling under the weight of inadequate infrastructure, unreliable electricity, and fragmented policy support. Initiatives aimed at boosting local production and export competitiveness have fared no better than a house built on quicksand. The promise of an industrial revolution in Ethiopia remains as elusive as a mirage in the desert.
If you think you’ll find stability in Ethiopia’s manufacturing sector, prepare for disappointment.
The financial market and investemoclimate are almost always dubbed with a stock exchange in crisis. The establishment of the Ethiopian Securities Exchange was heralded as a turning point for financial markets. Yet, investor participation is minimal, liquidity is a myth, and transparency remains a buzzword with little substance behind it. With a regulatory framework that changes more often than the weather, it’s hard to imagine any sustainable investment climate emerging from this chaos.
In other words, if you’re looking for a sound investment, don’t hold your breath.
Green dreams black reality are the faces of the energy and environmental policies. The government’s green policy initiatives—including the bold ban on gasoline and diesel vehicle imports—were intended to reduce import bills and spur renewable energy adoption. Unfortunately, these policies were rolled out with the infrastructure of an underfunded dream. Unreliable power supply, non-existent charging networks, and a complete disregard for on-the-ground realities have rendered these green dreams nothing more than expensive political theater.
If you’re into watching ambitious policies crash and burn, this one’s a real treat.
- Macroeconomic Indicators: Numbers That Hurt
GDP growth once promising but now puzzling. Ethiopia’s GDP growth, once a source of national pride, now seems as erratic as the government’s policy decisions. While there were periods of robust expansion driven by massive public investments, these were quickly undermined by systemic inefficiencies and external shocks. The economic picture is as muddled as it is misleading—a tale of growth that might have been if mismanagement hadn’t reigned supreme
Inflation and devalued Birr means ruining savings daily. The move to a market-determined exchange rate in 2024 sent the Ethiopian Birr into a free fall, with inflation soaring past 30% at times. Everyday citizens are forced to watch their savings disintegrate while the government insists it’s all part of “modernizing” the economy. This isn’t economic progress—it’s a slow-motion disaster that’s eating away at the purchasing power of millions.¹
Imagine paying triple for your daily bread. Welcome to modern Ethiopia !
Foreign exchange reserve – the endangered currency. Foreign exchange reserves, once a buffer against economic shocks, are now as endangered as a snowflake in a desert. The country’s narrow export base and outdated trade policies mean that securing foreign currency has become nearly impossible. The official exchange rate is a far cry from reality, with black-market figures painting a much bleaker picture.
Need a tip? If you plan to import anything, you might want to start looking into barter systems.
- Debt and Fiscal Policies: Borrowing Your Future Away
More loans more problems- In an effort to fund its reforms and infrastructure projects, Ethiopia has racked up external debt that now exceeds 50% of GDP. Each new loan is touted as a stepping stone to economic stability, yet in reality, the country is sinking deeper into debt. The ongoing negotiations under the G20 Common Framework for debt restructuring are less about solving problems and more about postponing inevitable collapse.
If you enjoy living on the financial edge, then borrowing your future away is the way to go!
Fiscal policy and public expenditure is budgeting and conspiring for disaster. The government’s fiscal policy is a masterclass in contradiction—promising austerity and fiscal discipline on one hand, while indulging in lavish public spending on the other. Inefficient tax collection, outdated public financial management systems, and endless bureaucratic red tape have all contributed to a budget that’s more fantasy than reality. The result? A widening gap between promises and practice, with income inequality and social discontent on the rise.
- Geopolitical and Trade Factors: Burning Bridges
A lost opportunity due lack of strategic positioning and regional ambition. Ethiopia’s strategic location in the Horn of Africa could have been a gateway to regional prosperity. Instead, internal political instability and poor economic policies have undermined these ambitions, alienating trade partners and scaring off investors. The promise of regional leadership has turned into a bitter irony as opportunities slip away.
No discussion of Ethiopia’s economic woes would be complete without mentioning past and ongoing civil conflicts—most notably in Amhara and Tigray regions. These conflicts have not only led to severe humanitarian crises but have also disrupted economic activity and strained public resources. Reduced international aid and chaotic conflict management have only exacerbated the situation, leaving millions to suffer.
A perfect storm: Economic mismanagement meets civil unrest. Who could ask for more?
Ethiopia’s trade imbalances and global isolation is an expensive excuse. Efforts to integrate into the global economy have been hampered by an overreliance on a narrow range of exports and outdated trade regulations. With little diversification and an unstable legal framework governing trade, Ethiopia’s integration into global markets remains a pipe dream.
- Policy Pitfalls and Future Risks: The Road to Ruin
The headlines on a daily basis is inflation, currency instability and monetary mayhem to name few. The shift to a market-determined exchange rate without the necessary institutional support has resulted in an inflationary spiral. Currency instability is now the norm, leaving economic planning in shambles and everyday life burdened with soaring costs.
All talk no walk is experienced when one looks into institutional and infrastructural gaps. Whether it’s the domestic legal framework or banking regulations, every reform appears to be implemented without the requisite institutional capacity. The infrastructure—both physical and administrative—remains woefully inadequate, resulting in a chaotic environment where policies are announced with fanfare but never truly delivered.
If you are looking for a time bomb turn your face to the country’s debt sustainability and fiscal mismanagement. The unsustainable levels of debt, coupled with fiscal mismanagement, have created a ticking time bomb that threatens to derail any semblance of progress. Without serious reforms in tax administration and public spending, the future looks increasingly bleak.
Political instability and socioeconomic disparities made the woeful government regimes of regret. Perhaps the most damning indictment is the interplay between economic mismanagement and political instability. Social disparities are widening, public services are deteriorating, and the government’s inability to foster inclusive governance is setting the stage for future crises.
Vote for continuity if you enjoy watching inequality widen and chaos reign.
- Conclusion: Vote for Disaster or Demand Change?
So, here we are—at the crossroads of economic doom or a desperate, last-ditch hope for stability. If you revel in the spectacle of runaway inflation, enjoy watching the birr disintegrate faster than your savings, and have a penchant for government policies that seem to be scripted by a team of amateurs, then by all means, cast your vote for Abiy Ahmed. After all, why settle for a stable economy when you can have a thrilling front-row seat to financial self-destruction?
Let’s be blunt: the so-called reforms since 2018 have been less about ushering in prosperity and more about serving up a masterclass in fiscal mismanagement. The promises of modern legal frameworks and streamlined banking regulations have translated into a dizzying maze of contradictory laws and half-baked policies that leave the average citizen—and even seasoned investors—scratching their heads in disbelief. The country’s external debt has ballooned, its foreign exchange reserves are on life support, and the regulatory environment changes more often than a politician’s stance on issues. If you’re a fan of watching public resources vanish into thin air while the elite celebrate their own successes, then you’re in for a treat.
But here’s the kicker: every new policy announcement comes with a generous dose of optimistic rhetoric, as if everything is perfectly under control. In reality, the government’s promises are as reliable as a weather forecast in the middle of a storm. The economic future under Abiy Ahmed isn’t just uncertain—it’s a ticking time bomb, waiting for the right (or wrong) moment to explode into further chaos. So, if you believe that a future filled with economic stability, genuine growth, and accountable governance is worth the risk, it might be time to demand change. Because continuing down this road means voting for more of the same—a future where financial security is a joke, public trust is in freefall, and every day feels like a countdown to the next crisis.
In short, if you enjoy the thrill of economic uncertainty and the spectacle of a collapsing system, then by all means, let the current administration have another term. But if you’re tired of the constant parade of broken promises and disastrous policies, it might be time to ask yourself: Is it really worth betting on a system that has, time and again, proven its penchant for self-sabotage? The choice is yours—vote for disaster, or demand the change that Ethiopia so desperately needs.
