Why Ethiopia’s Leader Is Winning International Kudos

ADISS ABABA (Capital Markets in Africa) – Since taking power last year, Ethiopian Prime Minister Abiy Ahmed has been on a drive to open up Africa’s second-most-populous nation. He has scrapped bans on opposition and rebel groups, purged allegedly corrupt officials and ended two decades of acrimony with neighboring Eritrea — an initiative that won him the 2019 Nobel Peace Prize. He has also put out the welcome mat for foreign capital in an effort to maintain growth in one of the world’s fastest-expanding economies. But he still confronts stumbling blocks, including ethnic unrest and opposition from factions within the ruling party.

What has earned Abiy global accolades?
Abiy, now 43, became Africa’s youngest leader when he was appointed as the prime minister in April 2018. He immediately set about implementing sweeping economic and political reforms, which included taking steps to end Ethiopia’s long-running conflict with Eritrea. The two nations had waged a border war from 1998 to 2000 that claimed as many as 100,000 lives. Abiy was honored for his “efforts to achieve peace and international cooperation, and in particular for his decisive initiative to resolve the border conflict with neighboring Eritrea,” according to the Oslo-based Norwegian Nobel Committee.

How did Abiy come to power?
Former Prime Minister Hailemariam Desalegn last year became the first ruler in modern Ethiopian history to step down voluntarily after failing to quell violent protests that claimed several hundred lives. The ruling party, which has held power since 1991, chose Abiy to succeed Desalegn and he took over two months later. He has pledged to hold elections in 2020. But attacks in June that claimed the lives of five senior government officials highlighted the extent of the challenges confronting Abiy and Ethiopia.

What’s behind Ethiopia’s ethnic tensions?
Africa’s oldest nation-state and one of a handful of countries on the continent to avoid European colonization, Ethiopia was an absolute monarchy until the 1974 socialist revolution that deposed Emperor Haile Selassie. The country has been a multi-ethnic federation since 1991 when an alliance of rebels led by the Tigray People’s Liberation Front overthrew the Marxist military regime that followed Selassie. Recently, the country endured four years of protests, mainly by members of the Oromo and Amhara communities, which together account for almost two-thirds of Ethiopia’s 100 million people. They complained of economic and political marginalization by the Tigrayans, who make up about 6% of the population but have dominated Ethiopian politics since the 1990s.

What sparked the June attacks?

The government described the killings of the five officials, including the army chief of staff and the president of the northern Amhara region, as an attempted coup. Abiy’s office accused Brigadier-General Asaminew Tsige, the head of Amhara’s administration and security bureau, of orchestrating the attacks and said he’d been shot dead while on the run near the regional capital. In the aftermath of the attacks, the government switched off internet access throughout the country for 10 days and the security forces detained more than 250 people.

Could Abiy’s reforms be derailed?
The prime minister vowed not to be deterred by the assassinations. The murdered Amhara region president, Ambachew Mekonnen, backed Abiy’s policies, but his death is unlikely to undermine the reform process unless the violence escalates or spreads. Insecurity and a lack of preparation by the electoral board, however, suggest it could be difficult to hold a credible vote next year. A delay would heighten the risk of more conflict.

How’s the economy holding up?
Ethiopia’s $80 billion economies have expanded an average of almost 10% a year over the past decade, according to the International Monetary Fund, and the nation drew in a record $13 billion of investments, loans, grants, and remittances during Abiy’s first year in office. While the IMF sees the average annual growth rate slipping to 7.2% through 2024, the economy could surprise to the upside if the ruling party follows through on plans to open up state-dominated industries such as telecommunications to outside investors. Unilever NV, Diageo Plc and Hennes & Mauritz AB (H&M) are among the companies with operations in Ethiopia. The Grand Ethiopian Renaissance Dam, Africa’s biggest hydropower project, is being built by Italy’s Salini Impregilo SpA.

What’s at stake for security?
Ethiopia is a major power broker in the Horn of Africa, with peacekeepers in Sudan and South Sudan and troops in neighboring Somalia fighting militants linked to al-Qaeda. It also has more refugees within its borders than any other African nation. That means any escalation in unrest will have a bearing on stability in the tumultuous region. The nation is also a key ally of the U.S. and hosts the headquarters of the African Union.

Source: Bloomberg Business News