Neoliberal Economic Policies Are Failing Ethiopia

Many Ethiopians are asking if neoliberal economic policies are helping or hurting. Recent reforms—exchange-rate liberalization, subsidy cuts, and privatization—were meant to stabilize the birr and prices. Instead, families feel squeezed by high inflation, power outages, and rising insecurity. People see more homelessness, joblessness, and fear that basic services are declining.

Others look back to a developmental economy—state-led investment, industrial policy, and rapid growth—but remember uneven gains, debt burdens, and political risks. With war scars, displacement, and social tensions still raw, the choice of policy path feels urgent and personal.

This article will compare trial-and-error results in Africa and beyond, assess Ethiopia’s realities today, and outline practical steps to protect livelihoods, restore services, and rebuild trust—whether through a smarter developmental approach, a social safety–first market mix, or reforms to neoliberal economic policies.

Ethiopia Before Neoliberal Policies

Ethiopia before neoliberal policies had a very different economic structure. The country’s economy was mostly traditional and based on agriculture, with strong influences from the feudal and imperial systems under leaders like Emperor Haile Selassie. Land and resources were controlled by a small elite, and trade was often based on barter and craft skills. According to research, the Ethiopian economy remained quite closed until the late 20th century, with limited modernization and minimal integration into the global economy. Major development and growth were rare, and poverty levels were very high, often above 70 percent of the population. The state played a critical role in all economic affairs, with little private sector development and almost no foreign investment. The socialist Derg regime, which followed the imperial era, also maintained strong state control, embracing collective farming, price controls, and state ownership—often with disastrous consequences for productivity and food security.

Meles Zenawi’s Developmental State Model

The shift began when Meles Zenawi came to power in the early 1990s, promoting what is called the “developmental state” model. This approach was very different from the West’s neoliberal model. Zenawi’s vision was for the Ethiopian state to act as the main engine of economic transformation, closely managing key sectors and setting long-term development plans instead of leaving everything to market forces.

State Control and Protectionism

State control and protectionism were central. The government maintained ownership of major banks, telecommunication, and energy sectors. High tariffs and restrictions protected local industry and agriculture from foreign competition. This meant that, while some private enterprise was allowed, the state always remained the main player in the economy. Policies often favored big infrastructure and state-led investments. Local industries received subsidies and loans, while imports were limited, giving domestic enterprises space to grow.

Social Investment and Poverty Reduction

Social investment and poverty reduction were also hallmarks of Zenawi’s approach. Major spending was directed to health, education, and infrastructure. Under his rule, Ethiopia experienced impressive GDP growth, and poverty numbers declined sharply. Roads, schools, and healthcare centers were expanded, and programs to support rural farmers were introduced. This enabled some rural communities to escape the worst depths of poverty, and international donors often praised the government’s commitment to development goals, such as the Millennium Development Goals.

Criticisms: Corruption and Wealth Inequality

However, criticisms were never far from the surface. Corruption and wealth inequality became persistent issues in the developmental state era. Party elites and those close to government officials often became wealthy, while many ordinary people, especially in rural areas, still struggled. Critics accused the government of using public contracts and business licenses for patronage. Wealth gaps between regions and social groups grew, and complaints about lack of government accountability spread. International observers also pointed out that while GDP was growing, much of the benefit went to the urban elite or was lost through corruption.

Transition to Abiy Ahmed’s Neoliberal Reforms

The transition to Abiy Ahmed’s neoliberal reforms marked the beginning of a dramatic shift in policy—and high hopes for change.

Rise to Power and Political Background

Rise to power and political background matter here. Abiy Ahmed was chosen as prime minister after a period of mounting protest and calls for change within the ruling coalition, the Ethiopian People’s Revolutionary Democratic Front (EPRDF). Discontent was rising against the centralization and lack of political openness under previous leaders. Abiy Ahmed, with his mixed Oromo-Amhara heritage and message of reform, was seen as someone who could ease ethnic tensions and push for democracy.

Key Drivers of Policy Change

Key drivers of policy change were both internal and external. The demand for new economic opportunities, jobs for youth, and access to foreign capital put pressure on the old model. There was rising debt from expensive state-led projects. International organizations like the IMF and World Bank encouraged Ethiopia to open markets, privatize state assets, and invite more foreign investors. Abiy’s agenda sought to modernize the economy, reduce state dominance, and create more space for private enterprise—believing this would lift living standards and bring innovation. The goal was to solve longstanding structural problems, but the results have remained controversial.

Ethiopia’s journey from protectionism to neoliberal shock therapy has not only impacted economic growth, but also left serious questions about who gains and who loses in times of rapid change.

Neoliberal Economic Reforms Under Abiy Ahmed

Privatization of State-Owned Enterprises

Sectors Targeted: Telecom, Airlines, Power

Privatization of state-owned enterprises has been one of the biggest changes under Abiy Ahmed’s government. The most high-profile sectors targeted for privatization are telecom, airlines, and power. Ethiopia’s telecommunications sector, led by Ethio Telecom, was once a strict state monopoly, but the government has begun selling shares and licensing new entrants. In aviation, Ethiopian Airlines remains mostly state-owned, but plans have been announced to sell minority stakes or separate key business units. The power sector is also being opened up, with some generation and distribution projects available for private and foreign investors.

These moves are supposed to increase efficiency, attract capital, and modernize public utilities. Many Ethiopians are concerned about losing national control over vital services. There are public fears that privatization may lead to higher prices, layoffs, or reduced service for the poor or those in rural areas.

Arguments for and Against Privatization

Arguments for privatization often highlight the promise of greater efficiency, improved service delivery, and investment from domestic and foreign sources. Supporters say competition will break state monopolies and introduce new business practices, driving innovation and possibly lowering costs in the long term. They also claim private investment can ease the government’s financial burden, freeing up public funds for health, education, or infrastructure.

Arguments against privatization are also strong. Critics worry about job losses, increased prices, and corporate profit-seeking taking priority over public service. There are fears that selling state assets, especially to foreign owners, will reduce national sovereignty and create new forms of dependency. Some worry that privatization could lead to cronyism or allow politically connected elites to buy up public assets at bargain prices, increasing inequality.

Liberalization and Opening to Foreign Investment

Foreign Direct Investment Trends

Liberalization under Abiy Ahmed has focused on making Ethiopia friendlier for foreign direct investment (FDI). Laws restricting foreign ownership in many sectors have been relaxed, allowing more international businesses to enter Ethiopia’s markets—especially in telecom, finance, and manufacturing. The country has seen a mixed trend in FDI: although promises of reforms initially attracted global attention, instability and conflict have discouraged some investors.

According to reports by global organizations, Ethiopia’s FDI inflows saw a short-term rise after liberalization, but have since fluctuated due to political and security challenges. High-profile investments from the Middle East, China, and multinational corporations highlight the country’s potential, but continued uncertainty keeps many cautious.

Influence of IMF, World Bank, Western and Chinese Stakeholders

The role of international financial institutions such as the IMF and World Bank is hard to ignore. These agencies have conditioned loans, debt relief, and development assistance on Ethiopia’s commitment to opening up markets and reforming state-owned sectors. Their policies push for privatization, reduction of government subsidies, and greater transparency to attract investment.

Western interests tend to focus on governance reforms and free-market solutions, while Chinese actors are more willing to invest in infrastructure, construction, and industry under state-led agreements. Both influence the Ethiopian government’s choices, but with different expectations and approaches. While some claim these organizations help Ethiopia modernize and connect to global markets, others criticize the pressure to follow directives that may not match local needs.

Reduction in State Role and Strategic Interests

Market-Driven Reforms vs. Developmental Planning

Reduction in the state’s role in Ethiopia’s economy is a direct turn away from the developmental state model. The new approach under Abiy tries to give the private sector more power and relies on market-driven reforms. The government claims that this will unleash competition, boost entrepreneurship, and speed up growth.

However, many experts and citizens worry that developmental planning—with the government driving major projects and social investment—is being discarded too quickly. Market-driven policies might ignore vital areas like rural development or social safety nets, which the private sector might not find profitable.

Impact on National Sovereignty

The impact on national sovereignty is a heated topic. Handing over strategic sectors to private or foreign investors can mean less control over decisions that affect millions of Ethiopians. Policy critics argue that, in a rush to please international lenders and meet loan conditionalities, the Ethiopian government is putting state interests and the public good at risk.

Privatization and liberalization can make Ethiopia’s economy more dependent on global financial flows and less able to respond to local priorities. This raises questions about long-term stability, security, and whether the country can follow its own path of development or is forced to adapt to outside agendas.

The complicated mix of privatization, liberalization, and reduced state role under Abiy Ahmed’s reforms promises new opportunities and modern growth, but also brings concerns about inequality, social protection, and loss of economic sovereignty.

Economic Growth vs. Human Development Indices

GDP Growth vs. Living Standards

Economic growth in Ethiopia has been strong on paper, especially under Abiy Ahmed. Reports indicate Ethiopia’s GDP growth rate reached 6.8% in 2024, with forecasts pushing it near 7% for 2025. In some official discussions, numbers are even higher, sometimes quoting over 8%.

However, living standards tell a very different story. Ethiopia’s Human Capital Index remains low, and while GDP expands, improvements in health, education, and basic public services have not kept pace. Many people ask themselves, “If the country is growing so fast, why am I struggling more to provide for my family?” A major cause is that most growth is concentrated in sectors that don’t create enough well-paying jobs or meaningful boosts in quality of life. Cost of living, particularly in urban areas, keeps rising, and around half of Ethiopia’s population still lives in poverty. Many families cannot afford basic goods, even as the economy expands on paper. People are realizing that GDP is just a number—what really matters is daily life.

Brain Drain and Capital Flight

Brain drain and capital flight have become growing worries in Ethiopia. According to global rankings, Ethiopia’s brain drain score is around 5.9 out of 10, placing it among the top countries losing skilled talent. The reality is many doctors, engineers, university graduates, and even entrepreneurs are leaving for better opportunities abroad. They are tired of limited prospects, poor wages, and political instability at home.

Capital flight is just as alarming: in recent years, Ethiopia has reportedly lost billions of dollars to illicit financial flows and unrecorded transfers. This means not only skilled people but also vital resources are escaping the country. Talented youth and crucial investment are leaving Ethiopia right when the nation needs them most. Communities are feeling the loss, and hope for the future looks dimmer for families who see their sons and daughters moving away.

Inequality and Wealth Distribution

Wages and Labor Rights in the New Economy

Wages and labor rights have suffered under recent neoliberal reforms. Ethiopia still does not have a private sector minimum wage, and wages—especially in low-skill sectors like textiles—are notoriously low, sometimes among the lowest in the world. Many foreign investors are attracted to Ethiopia because of cheap labor, but this means that workers do not enjoy decent living standards.

Compounding the problem, labor rights and workplace protections remain weak, and the informal labor market is enormous. Insecure contracts, low pay, and dangerous conditions are common. The push for economic liberalization has been good for profits—especially for large companies and foreign investors—but rarely for workers. The reality is, there is a race to the bottom on wages and working conditions, and ordinary Ethiopians are paying the price.

Winners and Losers: Urban vs. Rural, Ethnic Disparities

Urban and rural communities in Ethiopia experience inequality very differently. Urban areas, especially Addis Ababa, see more economic activity and government investment; but rural regions, home to the majority of the population, struggle with deep poverty and fewer opportunities. Even within rural Ethiopia, a small number of wealthy farmers or local elites have far more than the vast majority of poor smallholders.

Ethnic disparities also add fuel to the fire. Some groups benefit more from development projects, jobs, or government contracts—often based on politics or regional power. Various reports point out that ethnic and regional inequalities in wealth and opportunity are rising, risking even more division and resentment. With basic services, health, education, and jobs all distributed unevenly, the gap between winners and losers has never felt wider.

Impact of Corruption and Kleptocracy

Oligarchic Political Economy

Corruption and kleptocracy continue to undermine Ethiopia’s reforms. Despite promises of anti-corruption campaigns and new committees, large-scale corruption among political elites is frequently reported. Some experts argue that a new oligarchic class controls the spoils of economic “growth”—using privileged access to government, foreign contracts, or state assets to enrich themselves at the public’s expense.

Ordinary citizens see ongoing embezzlement, tax evasion, and shady deals. Political connections often matter more than merit. Money and opportunity flow up the ladder, not down to the people who need it most. This fuels even more cynicism, eroding public trust in both government and the economic system.

Illicit Financial Flows and Governance Failures

Ethiopia is losing tens of billions of dollars to illicit financial flows—with $44 billion reportedly lost in the last decade alone. Funds are smuggled or illegally transferred out of the country, sometimes with the help of complicit officials or weak oversight from the government. These outflows represent money that could have been spent on hospitals, schools, or local businesses.

Weak governance and lack of proper enforcement are at the heart of the problem. As long as oversight is poor and people in power are not held accountable, illicit capital and governance failures will damage the country. Ordinary Ethiopians suffer the consequences both in lost services and the persistent sense that the system is rigged against them. Without urgent reforms, hopes for a more just and equitable Ethiopia remain distant.

Political and Social Instability

Ethnic Tensions and Federalism Crisis

Ethnic Federalism Under Meles and EPRDF

Ethnic federalism in Ethiopia was introduced by the EPRDF government, led by Meles Zenawi, after 1991. The idea was to give major ethnic groups their own regional states and the right to self-rule. Supporters once said this would solve historical grievances and create harmony among Ethiopia’s diverse peoples. But over the years, ethnic federalism only sharpened competition for land, power, and resources. Instead of lowering conflict, it created new divisions and made ethnicity a key factor in politics and government jobs. Reports from Crisis Group and other organizations show that ethnic federalism sometimes became a tool for the ruling party to control opposition, rather than a way to empower minorities. Many felt their local leaders were chosen to serve the central government, not their communities. Tensions simmered under the surface, setting the stage for later unrest.

Rising Inter-Ethnic Conflicts Under Abiy

Rising ethnic conflicts have gotten even worse since Prime Minister Abiy Ahmed took power. Efforts at political reform created hope, but quickly turned into renewed inter-ethnic violence. Old rivalries between regions like Amhara, Oromo, and Tigray resurfaced. According to the Council on Foreign Relations, power struggles grew as Abiy’s government pushed to centralize authority and reduce the role of the former ruling coalition. Many groups feared losing their autonomy and reacted with protests and militia violence. The Amhara and Oromo are especially affected, with both ethnic and political grievances at play. Violence, displacement, and distrust have spread even beyond traditional hotspots into places that were once considered stable. Many believe these rising conflicts are the direct result of both old wounds and rapid, poorly managed attempts to change the federal system.

Armed Conflict and Civil War

Tigray Conflict and Its Economic Roots

The Tigray conflict exploded in November 2020, but its roots go back much further. Key issues were the distribution of power and money between the federal government and the Tigray People’s Liberation Front (TPLF). Economic changes, the politicization of aid, and disputed elections added fuel to the fire. Economic grievances included accusations that federal policies starved Tigray of resources while rewarding other regions. Reports by CNN and analysis from Accord Africa show that economic marginalization and exclusion played a huge role in building resentment and mistrust. Civil war followed, with enormous humanitarian and economic costs. Farmland was destroyed, trade was blocked, and millions of people were displaced. This conflict reversed years of economic growth and made poverty worse for countless families.

National Security and Social Fragmentation

National security in Ethiopia is now at its weakest point in years. Ongoing fighting, coupled with ethnic disagreements and fragmented government control, makes it hard to keep the country safe. Warnings from The Reporter Ethiopia highlight how insecurity spreads—especially when no group fully trusts the government or the military. Regions may try to defend themselves rather than rely on national institutions. The sense of a united Ethiopia is breaking apart, replaced by fear, suspicion, and local rivalries. This social fragmentation is a breeding ground for even more violence, as communities see neighbors as rivals rather than fellow citizens.

Law, Order, and Public Safety

Rise in Crime and Lawlessness

Rise in crime is a serious problem across Ethiopia today. Both police and international media like the BBC report sharp increases in kidnappings, robberies, and violence, especially in the Oromia region. Armed groups have become bolder, with many cases of kidnapping-for-ransom becoming frighteningly common. Lawlessness is not limited to rural areas; even big cities, including Addis Ababa, have seen violence spill into daily life. According to Capital Ethiopia, the breakdown of central authority has allowed criminal networks and militias to act with impunity. Many Ethiopians blame both the government’s inability to guarantee safety and the broader climate of conflict and mistrust.

Impact on Daily Life and Public Trust

Impact of political and social instability on everyday life is devastating. Ordinary people are living in fear of violence, losing homes to conflict, or struggling to put food on the table because markets and farms are disrupted. Displacement is common, and basic services like education and health care are harder to reach. Human rights abuses, such as arbitrary arrests and executions, are widely reported by sources like The Reporter Ethiopia. Public trust in both local and national government has suffered, with many citizens feeling abandoned. The rising instability has undermined faith in law, order, and collective society. For many, hope has turned to worry, and the dream of a united Ethiopia feels farther away than ever.

Humanitarian Crisis and Social Wellbeing

Inflation and Cost of Living

Inflation and cost of living have been key worries for Ethiopian families in recent years. In 2024, inflation rates fluctuated between 13 and 24 percent, with food and fuel prices hitting especially hard. Although inflation came down from record highs of over 30 percent seen in 2022 and 2023, the burden on ordinary people remains heavy. Salaries and wages have largely failed to keep up, leading even workers with full-time jobs to struggle with basic expenses like food, rent, and transportation. Recent economic policies and import restrictions have driven up the prices of essential goods, so families are forced to tighten their budgets further.

Effects of Currency Devaluation

Effects of currency devaluation have been dramatic. The Ethiopian birr has lost value against the dollar and other major currencies, making imports much more expensive. Because Ethiopia depends on imported fuel, wheat, medicines, and many raw materials, this weakening of the birr causes prices to shoot up for consumers. Businesses also raise prices to keep up with costs. At the same time, families who earn in birr but must pay for imported items see their purchasing power shrink day by day. Many are forced to cut meals, delay healthcare, or take children out of school to compensate for the increased living costs.

Government Austerity Measures

Government austerity measures have made daily life even more difficult for many Ethiopians. The state has reduced subsidies and spending on public services in a bid to control its deficit and meet the terms of loans from international institutions. These cuts affect electricity, water, and public transport, making them more expensive or less reliable. Reduced government hiring and wage freezes compound the problem, especially for public employees. These moves were intended to stabilize the economy but have deepened poverty for many people, pushed more households into precarious situations, and raised questions about the government’s priorities.

Food Security, Famine, and Export Dilemmas

Food security, famine, and export dilemmas have been at the center of the humanitarian crisis in Ethiopia. In 2024, over 10 million Ethiopians needed food support due to drought, conflict, and high inflation, according to global aid estimates. Even though harvests and exports of wheat and coffee have been strong in some regions, millions remain at risk of acute hunger. Aid agencies warn that gains in agricultural production have not always translated into improved food access, mainly because of market failures, rising input costs, and the impact of currency crises.

Starvation Amid Agricultural Exports

Starvation amid agricultural exports is one of Ethiopia’s starkest contradictions. While the government celebrates record exports of wheat and coffee to earn much-needed foreign currency, people in drought-hit or conflict-torn areas face hunger and even famine-like conditions. In 2024, international reports highlighted that food was being shipped abroad as millions at home depended on aid. Factors like export priorities, poor rural roads, and damaged distribution networks mean that local markets often run empty, and prices climb where food is available. This situation strikes many as deeply unfair and increases the sense of public frustration.

Government Appeals to the Diaspora and International Community

Government appeals to the diaspora and international community have grown more intense in recent years. As famine and food insecurity made headlines, the Ethiopian leadership reached out to Ethiopians living abroad and to donors, urging for funds, remittances, and humanitarian assistance. Appeals include official campaigns, special government bonds, and public messages asking the diaspora to “stand with Ethiopia.” International organizations like the World Food Programme and UN agencies remain key partners in this crisis, but aid suspensions due to corruption scandals and concerns about aid delivery have at times slowed the help getting to those who need it most.

Homelessness and Urban Displacement

Homelessness and urban displacement are growing tragedies across Ethiopian cities, fueled in part by ambitious development schemes and poor housing policies. While the country’s urban population accelerates, so does the number of people left without homes due to forced evictions, demolitions, or the high cost of living.

Urban Development Projects (e.g., Sheger City)

Urban development projects like the Sheger City Corridor have become deeply controversial. The aim is to modernize and beautify major urban areas, but the process has seen thousands of homes and businesses demolished in 2024, especially in areas around Addis Ababa. Neighborhoods deemed “informal” have been flattened, often with very little notice or compensation for residents. The rural-urban edge—home to many low-income households and farmers—has been hit the hardest. While some officials promise better infrastructure and investment, those most affected see only lost livelihoods and broken communities.

Housing Demolitions and Rise in Homelessness

Housing demolitions and the rise in homelessness are closely linked. Demolitions carried out for development, combined with ongoing conflict and the effects of disasters, have resulted in almost 3 million internally displaced people as of late 2024. Reports from human rights groups document that even houses with legal title have sometimes been destroyed. Families find themselves on the street, struggling to access food, water, and sanitation, with children suffering the most. Urban centers like Addis Ababa and Sheger City have seen visible spikes in homelessness, and shelters are few and overwhelmed. The government’s push for rapid development, critics say, is coming at the cost of human dignity and basic security.

The humanitarian crisis in Ethiopia today is mostly about survival: surviving inflation, surviving hunger, and simply, surviving without a home.

Education System Crisis

Ethiopia’s education system is facing a serious crisis. Underfunded schools, inadequate teacher training, and a narrow curriculum are among the top concerns. According to recent reports, millions of children are out of school due to emergencies, conflicts, and displacement. Even when children can go to school, many do not get quality learning. Higher enrolment numbers haven’t led to improved learning outcomes. In fact, in 2025, only about 3% of students scored above 50% on major higher education exams.

Policies intended to reform education, such as curriculum changes and teacher assessments, have not delivered the hoped-for results. There is a vast difference between what students are taught and the skills required for the current job market. Teachers often lack materials and support, especially in rural areas, and student achievement continues to drop. The humanitarian situation is making things even worse, with many internally displaced children missing out on any schooling at all.

Policy Changes and Learning Outcomes

Policy changes in Ethiopia’s education system have aimed to widen access and boost equity. However, many of these reforms have not improved learning outcomes. The focus on increasing school enrolment has come at the expense of teaching quality. Education experts note that while more students attend school, test scores and literacy rates remain low. Teacher training is often not strong enough, and schools are overcrowded.

International partners and government bodies have tried to address these problems with reforms like new curriculums, standardised tests, and efforts to support vulnerable students. Still, these efforts face tough obstacles: limited resources, ongoing conflict, and a lack of consistent follow-through. The learning crisis is now urgent, with low achievement in basic subjects like reading and maths. Parents and communities are increasingly frustrated as their children struggle to gain skills needed for better futures.

Youth Unemployment and Skills Mismatch

Youth unemployment in Ethiopia is a critical issue creating widespread concern. Young people, especially in rural areas, rely heavily on farming and have limited job options. The unemployment rate among youth is much higher than for other age groups, showing a clear mismatch between what schools teach and what employers want. Recent research links this long-term unemployment to skills mismatches, low work experience, and weak social networks.

Even in higher education, the courses often focus on theory rather than practical skills that fast-growing sectors like technology or construction need. This “skills gap” leaves graduates struggling to find jobs, while employers say they can’t find qualified workers. As a result, the economy loses energy, and youth feel disconnected and hopeless about their prospects. Many are forced to work in informal or low-paying jobs, which increases poverty and instability.

Health Services and Disease Management

Ethiopia’s health services are now under severe strain. Years of progress in immunisation, maternal care, and fighting communicable diseases are sliding backwards. The combined impact of recent conflict, disasters, economic troubles, and the COVID-19 pandemic has left hospitals with shortages of staff and medicine, while millions lack access to even basic care. Maternal and child health services, vaccination campaigns, and chronic disease management all show major signs of decline in 2024.

Non-communicable diseases like diabetes and high blood pressure are on the rise, but the system is not ready to handle this new burden. Many clinics are poorly equipped, and health workers are stretched thin. Infectious disease control is weaker again, putting families at risk of outbreaks. Health policy experts now warn that if nothing changes soon, Ethiopia might lose much of the ground it gained in public health over the past decades.

Legacy of Meles Era HIV/AIDS Response

During the Meles Zenawi era, Ethiopia was recognised for its strong response to HIV/AIDS. The government, with support from international donors, set up ambitious campaigns to fight the epidemic. They launched extensive awareness drives, improved access to antiretroviral drugs, and created policies that protected marginalised groups. These actions saved countless lives and made Ethiopia a model country for HIV/AIDS management in Africa.

However, some of these gains are now under threat. The current declines in public services and new disease management challenges mean that the systems built during the Meles years are at risk of falling apart. Health workers worry that HIV/AIDS control could weaken as resources are diverted elsewhere or lost entirely. Without renewed focus and investment, the legacy of progress in HIV/AIDS and other disease areas may be lost, harming millions and setting back years of hard-won success.

Religious, Cultural, and Civil Rights Concerns

Church-State Conflicts and Religious Schisms

Religious tensions have grown alongside Ethiopia’s political and economic upheavals. Church-state conflicts are not new, but under Abiy Ahmed’s rule, they have reached fresh levels of crisis. Religious institutions, especially the Ethiopian Orthodox Tewahedo Church (EOTC), play a central role in Ethiopian identity and social stability. When the government appears to challenge the authority or unity of these institutions, social unrest often follows.

EOTC Crisis and Government Response

EOTC crisis is considered one of the most serious church-state confrontations in recent years. In early 2023, internal disputes in the Orthodox Church escalated after a group of bishops, mainly from the Oromia region, attempted to set up a rival Synod. This split was seen by the EOTC hierarchy as government-backed interference meant to weaken the church’s authority and national influence. The fallout was immediate: protests erupted in several regions, and the EOTC accused the government of violating religious freedom, fueling ethnic and religious polarization.

In response, Abiy Ahmed’s administration tried to act as a mediator. However, many criticized the approach as heavy-handed and accused authorities of siding with the breakaway group. The perception of government interference damaged trust between the state and religious communities, setting a troubling example for religious freedom in Ethiopia.

State Violence Against Religious Observances

State violence against religious observances has become an alarming pattern. Security forces have repeatedly used force to disperse religious gatherings, especially those perceived as politically sensitive or linked to opposition movements. Reports from international human rights organizations and local groups detail incidents where police fired live ammunition on protestors, detained clergy, and disrupted major religious events such as Meskel and Timket.

These acts have further eroded faith in public institutions. Communities feel their right to religious expression is being trampled, fostering resentment and sometimes sparking larger demonstrations. Such actions raise concerns that religious identity, instead of being a point of unity, is becoming a new front in Ethiopia’s wider social and political conflicts.

Civil Liberties and Media Freedom

Civil liberties and media freedom have suffered setbacks amid Ethiopia’s reforms and turmoil. After an initial period of openness when Abiy Ahmed took power, restrictions have returned. Authorities cite national security and unity as reasons for limiting demonstrations, internet access, and opposition activity. Yet, many Ethiopians believe these justifications mask deeper efforts to control public opinion and stifle dissent.

Media freedom has especially come under pressure. Journalists and independent media outlets face harassment, arrests, or censorship if their reporting is seen as critical of the government or touching sensitive social issues. The result is a shrinking space for public debate. Self-censorship is common, and even online platforms are regularly blocked.

Ordinary citizens feel the effects, too, as government actions limit open discourse. Freedom of association, speech, and protest are all under strain. Many fear the erosion of these civil rights will make Ethiopia’s political and social divisions even harder to heal. People worry: how can a country find solutions if it cannot talk honestly about its deepest problems?

Infrastructure Contradictions

The Grand Ethiopian Renaissance Dam (GERD)

Operational Challenges and Power Shortages

The Grand Ethiopian Renaissance Dam (GERD) stands as Ethiopia’s most ambitious infrastructure project, meant to transform the nation into a power exporter in the region. Yet, operational challenges and power shortages cloud its promise. Many Ethiopians still face regular blackouts and struggle with unreliable electricity, even as the government celebrates dam milestones. There are frequent reports that the energy generated falls short of expectations due to outdated transmission systems and the inability to distribute power efficiently across the country. Drought, fluctuating water levels, and silt buildup affect the dam’s ability to generate electricity consistently.

Critics argue that the focus on GERD has diverted resources from modernizing existing power plants or repairing aging lines. Rural communities often remain disconnected from the national grid. Instead of solving Ethiopia’s electricity woes, the project has sometimes made them more obvious, revealing gaps in planning and execution. Urban centers may benefit first, while villages wait in darkness. For a project so grand in scale, its immediate benefits to ordinary Ethiopians are still frustratingly limited.

Symbolism vs. Everyday Impact

The GERD is filled with strong nationalist symbolism. It represents Ethiopia’s desire to take charge of its own destiny and shake off a history of poverty and foreign aid dependency. Government campaigns framed the dam as a historic achievement, urging citizens to contribute money and take pride in their nation’s leap forward. Buildings and billboards in Addis Ababa display murals of the dam, reminding everyone of its symbolic power.

But for many, the everyday impact is underwhelming. Promised cheap and abundant electricity has not reached all homes. Factories, hospitals, and schools still report frequent outages. While elites and urban middle classes may see prestige and eventual business gains, rural households and small traders often see little change. Some communities displaced by the dam’s construction report losing farmland or fishing grounds, making daily life tougher.

People ask: is GERD a symbol of national unity, or just another mega project with uneven benefits? For now, the contradiction remains. Many Ethiopians dream of the dam’s promise, but live with the reality of limited electricity and rising frustration. The gap between the GERD’s symbolic importance and its everyday benefits highlights deeper challenges in making infrastructure serve ordinary people.

Comparative Evaluation: Neoliberalism vs. Developmental State in Africa

Case Studies Beyond Ethiopia

Case studies beyond Ethiopia help us understand how both neoliberalism and the developmental state model have shaped African economies. In countries like Ghana and Kenya, neoliberal reforms focused on privatization and opening up to foreign investment. These countries experienced rapid GDP growth, but growth often failed to reach the poorest citizens. Jobs created were sometimes temporary or low-wage.

Meanwhile, countries such as Rwanda and Botswana have followed a more developmental state approach, with strong state planning, strategic investments, and some protection of domestic industries. Rwanda, for example, built its healthcare and education systems with state guidance. This raised human development indices, but state control sometimes limited political freedoms.

By comparing these cases, we see that neoliberal economies may grow fast, but gaps in equality, jobs, and public services widen. Developmental states can improve social outcomes and stability, but risk becoming unaccountable or even authoritarian.

Implications for Other African Trial States

The implications for other African trial states are significant. Countries considering neoliberal reforms must weigh the risk of increased unemployment, weakened public services, and larger gaps between the rich and poor. For example, Nigeria has seen both spikes in private investment and dramatic rises in inequality.

On the other hand, developmental state models offer promise, especially when focused on education, health, or infrastructure. However, these models need strong governance and protection against corruption. States like Tanzania struggle when state-led policies mix with weak institutions.

African states need to ask: Is rapid open-market growth worth it without social stability? Or is slow, state-led growth better if it means better health and education? The real lesson is, one size does not fit all. Each country must match reforms to its institutions, politics, and society.

Policy Recommendations for Ethiopia

Policy recommendations for Ethiopia must consider its unique social and economic history. Ethiopia should balance state involvement and market reforms, to avoid the extreme flaws of both models.

• Invest in Education and Health: Follow the best of the developmental state: keep investing in schools and clinics, so the population can benefit from any growth.
• Promote Good Governance: Build strong, transparent institutions to prevent corruption, whether the state or private companies manage industries.
• Targeted Privatization: Privatize with safeguards for workers and poor citizens; avoid fire-sales that benefit only elites or foreigners.
• Encourage Private Sector, but Regulate: Support local and foreign investment, but keep key industries under national control or good regulation.
• Inclusive Planning: Involve local communities and regions in economic decisions, to address ethnic and rural-urban divides.

Assessing the Best Path Forward

Assessing the best path forward for Ethiopia requires a careful, step-by-step approach. The best path is not absolute neoliberalism or pure state control. It requires:

• Learning from the past: Avoid repeating mistakes of state overreach or letting markets run without any checks.
• Combining policies: Take the best from both models. Use the market for innovation and investment, but protect basic rights, jobs, and industries through the state.
• Focusing on inclusivity: Make sure reforms help everyone, not only big cities or certain groups.
• Building institutions: Prioritize justice, transparency, and rule of law, so corruption does not undermine progress.

This mixed approach could help Ethiopia achieve both growth and social development, and avoid the worst crises facing other African nations in similar transitions.

Conclusion: The Path Ahead for Ethiopia

Restoring Stability and Inclusive Development

Restoring stability and inclusive development in Ethiopia is more urgent than ever. Years of rapid policy changes and escalating political tensions have left many communities feeling insecure. Ethiopia’s future depends on creating an environment where all citizens feel safe and included, regardless of their background. This includes addressing ethnic divisions and ensuring that economic opportunities reach rural communities, not just the urban elite.

For true development, both economic growth and social stability are necessary. The government must invest in education, healthcare, and infrastructure that benefits everyone. Policies should focus on both immediate peace and long-term prosperity. Empowering civil society and encouraging local participation in decision-making can build trust and bridge divides. People want to see fair distribution of resources and opportunities, so the country does not leave the poorest behind.

Diverse communities across Ethiopia need to see themselves reflected in local and national government. Listening to the concerns of farmers, youth, women, and marginalized groups is vital. Efforts to restore law, order, and public trust must be paired with real measures for economic inclusion and social cohesion. Only then can Ethiopia overcome its challenges and move toward a brighter, more united future.

Calls for Institutional Reform and Accountability

Calls for institutional reform and accountability are growing louder across Ethiopia. Many Ethiopians no longer trust old institutions to protect their interests or ensure justice. To move forward, the country needs strong, transparent institutions that are independent from political influence and can uphold the rights of all citizens.

Reforming the judiciary, police, and civil service is crucial. Independent courts and anti-corruption agencies must be empowered to investigate wrongdoing, recover stolen assets, and punish those who broke laws. Clear checks and balances can prevent the rise of oligarchs and ensure the government serves the people, not just the powerful few.

Accountability should extend not only to politicians, but also to business leaders and foreign investors. Ethiopians want to know how public funds are being used and who benefits from government contracts. Creating transparent processes for public spending and making information accessible are the first steps toward rebuilding trust.

Finally, involving citizens in this process is essential. Open dialogue, a free press, and independent watchdog groups can keep leaders honest and push for real change. Only with true institutional reform and a commitment to accountability can Ethiopia lay the foundation for peace, justice, and prosperous development for all its people.