Ethiopia Replaces Top Security Officials as Clashes Continue

ADDIS ABABA(Capital Markets in Africa) — Ethiopia’s leader replaced key security officials as fighting in the country’s northern Tigray region entered the sixth day.

Prime Minister Abiy Ahmed appointed General Birhanu Jula, the No. 2 military official, as chief of staff, replacing General Adem Mohammed. He also named Veteran Foreign Minister Gedu Andargachew as a national security adviser, and his job was handed to Deputy Prime Minister Demeke Mekonnen.

“It is a leadership shuffle aimed at enabling the government to carry out the rule-of-law enforcement efforts,” Billene Seyoum, a spokeswoman for the prime minister, said Sunday.
Clashes erupted in Tigray on Nov. 4, when Abiy ordered the military to respond to an alleged attack on a federal army camp. The hostilities have sparked fears of a civil war that could destabilize the Horn of Africa.

The conflict could also distract the government from implementing plans to open telecommunications and other state-dominated industries to outside investors. Negotiations with China for a debt-service moratorium, potentially deferring $2.1 billion in payments in 2020-23 may be at risk, while $2.2 billion in World Bank loans that were projected to be disbursed between 2021 and 2023 may also be in jeopardy, said Mark Bohlund, the senior credit research analyst at REDD Intelligence.

IMF Monitoring
The International Monetary Fund is following developments closely, a spokesman said in an emailed response to questions. “We remain in regular contact with the Ethiopian authorities and continue our engagement,” he said.

The yield on Ethiopia’s $1 billion of 2024 Eurobonds has climbed 98 basis points since Nov. 3, handing bondholders a 2.8% loss. That compares with a 1.3% average return for African sovereign issuers. Ethiopia was the only one of 15 to post a loss last week.

Relations between Tigray and Abiy’s government have been strained since the president took office in 2018 and sidelined the Tigray People’s Liberation Front, once the pre-eminent power broker in Ethiopia. Last month, the federal parliament ordered the Treasury to halt direct budgetary support to the Tigrayan administration for defying an order to postpone regional elections.

Abiy on Sunday accused the TPLF of financing and arming anti-government forces throughout the country and revived the allegation about the attack on the military base — the Northern Command camp that houses most of Ethiopia’s heavy armaments and personnel.

‘Instigating Clashes’
“They sponsored, trained and equipped any force that was willing to engage in violent and illegal acts to derail the transition,” Abiy said in a video posted online on Sunday. “Their objective was clearly to make the country ungovernable by instigating clashes along ethnic and religious lines; to sow division and discord so that the democratic transition will lose its momentum.”

The TPLF has denied the accusation.

The conflict in Tigray has led to shortages of fuel and food in the region, said Sajjad Mohammad, the head of the United Nations humanitarian office in Ethiopia. Fuel shipments from neighboring Sudan and Djibouti to Tigray have dried up, giving the region about a week before supplies run out, he said.

There’s a risk of a humanitarian crisis developing in the region, with 9 million vulnerable to displacement, Mohammad said.

“There are already almost 2 million people who receive some kind of humanitarian aid in Tigray,” he said.

Source: Bloomberg Business News