A year ago, the world was celebrating the signing of agreements to end the brutal war waged in Ethiopia’s Tigray region from late 2020 through 2022. Leaders and analysts were turning their focus to economic and social recovery for the vast nation in the Horn of Africa, assessing the reconfigured regional security dynamics, and rebuilding frayed relationships with Prime Minister Abiy Ahmed’s government. There was much talk of getting “back on track.”
Unfortunately, as 2023 comes to a close, it’s clear that this track is not leading anywhere good. As expected,this weekEthiopia went into default. Although the country’s relatively low debt to GDP ratio has economists and officials predicting a rapid agreement between the government and its creditors, there are other factors that may give optimists pause about Ethiopia’s economic trajectory. Foreign investors arequestioningthe consistency of the regulatory environment and the government’s commitment to allowing competition. Staff of the African Development Bank (AfDB) wereassaulted and detainedby Ethiopian authorities on October 31, leading the AfDB to withdraw its international staff from the country. The circumstances surrounding the incident are unclear, but journalists in the region have been following leads thatsuggestmalfeasance in the Ministry of Finance may be involved. Diminishing trust in the Ethiopian government has been something of a theme in 2023. For much of the year, food aid from the World Food Program and the United States was suspended despite the country’s vast needs. Donors had found that such assistance was being systematically diverted and it took months toagree on reforms that restored sufficient confidence to resume food aid, albeit on a trial basis.
If reasons for optimism have been hard to find on the economic governance and humanitarian fronts, they have been even more difficult on the security front. The end of the conflict in Tigray was a tremendously important and positive development, and despite outstanding issues in the implementation of the cessation of hostility agreement, that peace has held. But the fracturing of Prime Minister Abiy’s wartime coalition has led toongoing fightingin Amhara, which has now joined the conflict in Oromo as a seemingly intractable source of instability. It has also led to tension with erstwhile partnerEritrea. Perhaps seeking to rally political elites around a new crisis, Abiy’s decision to focus attention and emotion on Ethiopia’s desire for access to the sea (the country is landlocked and largely relies on Djibouti’s port for external trade) has beenunderstood as a threatto his neighbors. The latest talks between Ethiopia and Egypt regarding the Grand Ethiopian Renaissance Dam and rights to Nile water failed, prompting Egypt’s Minister of Water Resources and Irrigation to talks aiming toremindthe world that his country reserves the right to “defend its water and national security.” Security threats in and around the Red Sea arealready imposing real costs on global shipping. Bellicose rhetoric around hot-button issues involving Ethiopia only adds uncertainty to the existing turbulent environment.
The United States would very much like to see a secure, prosperous Ethiopia at peace with itself and its neighbors. Fragility in a country 120-million strong and in the strategically sensitive Horn of Africa is remarkably risky. But it’s very hard to convince oneself that Ethiopia is on a positive trajectory, and impossible not to see the multiple red flags warning of more trouble ahead.
