Five years before the rise of Africa's youngest prime minister, Abiy Ahmed, Ethiopia was struggling to emerge from extreme poverty, but at the same time looking for paths to continental leadership after becoming one of the world's fastest-growing economies. But, despite its economic rise in the past decade, Addis Ababa has remained mired in decades of political authoritarianism and under a single national control of power. But one man who was not yet fifty years old, who previously worked in the intelligence service and participated in the Eritrean-Ethiopian war, was able to break the dominance of the Tigray ethnicity through a long march of rise in the political ladder of power that began in parliament, in addition to obtaining degrees in computer engineering and business administration. Abiy Ahmed rose to prominence as a politician from a military background and descended from the Oromo, one of Ethiopia's largest ethnicities.
When Abiy came to power on his shoulders in March 2018, he pledged to make his country a major democracy and launched a ten-year development plan based on soft power to achieve peace with neighboring countries and overcome internal political turmoil to achieve economic progress, with democracy as the basis of development. Although Abiy Ahmed and his party won a landslide in the 2021 elections, which paved the way for him and his party towards a second five-year term, this is not an indication of the man's achievements, nor of the promises he made in his early days; to date, the three-decade civil wars have not ended, the country has not emerged from extreme poverty, and worse, development indicators have fallen to their lowest levels compared to the situation they were in when he came to power.
Before Abi Ahmed
General Mengistu Haile Mariam. (Social Media)
A year before the young man defeated the old guard, and as Ethiopia waited for a new president to succeed outgoing Prime Minister Hailemariam Desalegn, Ethiopia made a breakthrough by being the world's fifth-fastest-growing economy in 2017. The boom was not favourable for conditions in a country in the restive Horn of Africa, where 70% of the population is impoverished, and which has historically been under authoritarian rule rooted in centuries of imperial rule until the coup against the country's last emperor, Haile Selassie, in 1974. General Mengistu Haile Mariam came to power at the time, and Ethiopia was subjected to bloody military rule under his reign, a 17-year civil war erupted in which the authority targeted political opponents in ethnic cleansing campaigns known as the "Red Terror", and the country was hit by a famine that killed a million people.
As a result, a massive uprising erupted in 1991, Mengistu fell after an armed rebellion, and Eritrea gained independence from Ethiopia the same year. Until Prime Minister Meles Zenawi came to power in 1995, Addis Ababa began a new era of ascension through an economic program that began with ending dependence on food aid and developing agriculture, which employs 85% of the population. Zenawi has made 9.9 million acres of fertile and untapped land available to agricultural companies at discounted prices, built a huge rail network to nearby ports, and succeeded in making his country the largest airline in Africa, as well as establishing a telecommunications giant. Thanks to Zenawi's policies, Ethiopia achieved its highest economic growth rate in a decade at 10 percent per year, and its foreign reserves nearly doubled from $850 million to $1.55 billion.
Zenawi wanted to be seen in history as the person who lifted Ethiopia out of poverty, so he started the $4.2 billion Grand Renaissance Dam project, driven by the desire to launch a massive development project and make an energy shift in a country where 70 percent of its homes were still dark. Zenawi's successes lasted until his death and the accession of his successor, Desalegn, who rose to power in 2012, and his rise was an extension of the dominance of Tigray nationalism in power, although he himself did not belong to Tigray. The proportion of people living in poverty fell from more than 45 percent in 1995 to 23 percent in 2015, but widespread corruption and bribery threatened economic reform, with growth plummeted by reduced government public spending, foreign exchange reserves collapsed, debt increased, and the country plunged into political turmoil that led to anti-regime protests.
The threat faced by Africa's second most populous country forced Prime Minister Desalegn to resign from the ruling coalition after five years in power, replaced in 2018 by Abiy Ahmed, whose rise marked the end of Tigray dominance and the beginning of the emergence of his Oromo, the country's largest ethnic group, which has long complained of economic, cultural and political marginalization. This was not the only shift in power, as the young man pledged to change the face of the country, complete Zenawi's career in the economy, and achieve an achievement in rights and freedoms, and he had unprecedented hopes and dreams.
Abiy Ahmed and the Economic Reform Plan
Abiy achieved remarkable success in the early years of his rule of Ethiopia thanks to political reforms and social stability. (Getty Images)
In his early days, Abiy Ahmed enjoyed a large political presence that gave him regional weight that he exploited well, as his reign began with the release of political prisoners, expanding the margin of freedoms, allowing opponents to return from exile, achieving national reconciliation among all sects, and easing the security grip that ruled the country. He has made hundreds of previously censored websites available, Tigrayans have been noisily removed from senior positions in the military and intelligence services, and senior officials have been arrested in political positions in the name of fighting corruption, replaced by Oromos. Abiy also pushed his country to become a mediator to solve the problems of a number of neighboring countries, concluding a historic peace agreement with Eritrea that ended one of Africa's longest conflicts, and then receiving the Nobel Peace Prize in 2019 for his efforts to end political authoritarianism and sectarianism.
Abiy has achieved remarkable success in his early years in power thanks to political reforms and social stability, embarking on an ambitious plan to address the country's biggest weaknesses: being a landlocked state with no sea view since Eritrea seceded in 1993. In his first year in office, the young prime minister, who holds a doctorate in business administration, embarked on his first foreign visit to Djibouti to acquire a stake in its port after the termination of the concession with DP World. In exchange for the new deal, Djibouti acquired shares in Ethiopian state companies, including the Electric Power Company, Ethiopian Airlines and the Ethiopian Telecommunications Corporation, as part of an Ethiopian plan focused on gaining influence in managing the five main ports in the Horn of Africa.
Barely a month after that bargain deal, Abiy Ahmed flew to Sudan and signed an agreement with Bashir's regime before his ouster, which stipulated that his country would acquire a stake in Sudan's largest seaport, Port Sudan. In the same period, Ethiopia managed to acquire a 19 percent stake in the internationally unrecognized port of Berbera in Somaliland, and then proceeded to sign a reconciliation agreement with Eritrea, the terms of which included an agreement to develop a road between the two countries that would facilitate the passage of goods to the Eritrean port of Assab. Within months, Addis Ababa successfully implemented a logistics strategy to control parts of four major East African ports and significantly reduced its dependence on Djibouti, through which 95 percent of its imports and exports passed.
These steps taken by Abiy Ahmed to liberate his landlocked state externally from the mercy of neighboring countries, and to make diplomatic breakthroughs in the Horn of Africa, complemented an internal plan aimed at liberalizing the state-controlled economy, and gradually privatizing many of its owned industries, especially telecommunications companies, aviation and banks, with the aim of attracting foreign direct investment to solve the crisis of the shortage of low foreign reserves, in addition to the plan to expand infrastructure projects, especially in the field of energy, to export to neighboring countries. Ethiopia's problem with a population of 120 million people is that its economy depends on agriculture, which accounts for 40 percent of GDP, 80 percent of exports, and an estimated 75 percent of the country's workforce, prompting the government to launch a 10-year development plan that is supposed to end in 2029, hoping the country will turn to industrialization, to reduce the huge gap between imports and exports, which is attributed to the depletion of the country's foreign reserves.
Tigray War. End of project
The success story engineered by Abiy Ahmed's government quickly faded after the two-year declaration of war, as Addis Ababa found itself on the brink of collapse as Tigray guerrillas advanced on it before the signing of a peace deal last year. (Reuters)
In just a few years, Abiy Ahmed was able to bring about a qualitative change in power in terms of his unique way of governing, clearing up problems with neighboring countries, and implementing an economic reform program based on privatization, which received direct support from the International Monetary Fund worth three billion dollars in 2019. In the same year, the reform plan along with the country's large infrastructure investments began to bear fruit, with growth rising to 8.5 percent, and GDP rising to $95.9 billion. The high growth has led to a relative reduction in poverty rates and improved living standards, and the per capita national income in 2020 rose to $ 918, approaching the thousand barrier that the government aspires to overcome, from $ 755 in 2017.
Before Abiy declared war on Tigray in November 2020, he was an undisputed national hero at home and abroad, with the economy rising under his reign to first place in East Africa and third in sub-Saharan Africa, according to the World Bank. But the success story engineered by the government quickly faded after the two-year declaration of war, as Addis Ababa found itself on the brink of collapse as Tigray fighters advanced on it before the peace deal was signed last year. Eritrea intervened forcefully in the war with heavy forces on behalf of the federal government in Addis Ababa, forcing Tigray fighters who had made significant gains on the ground to seek refuge in South Africa, driven by a disillusioned desire to negotiate, agreeing to make painful concessions, including handing over their weapons.
The war is motivated by radical differences between the region and the government, including the Ethiopian parliament's adoption in April 2020 of a plan to keep Abiy Ahmed in power by postponing elections under the pretext of the coronavirus pandemic. The Tigrayan speaker of parliament protested and resigned from her post, while Tigrayans considered the move unconstitutional and a pretext for the formation of a new dictatorship. In return, the region organized its own elections, which the central government refused to recognize as illegal, and the regional government responded that it also did not recognize the central government since Abiy Ahmed's term had expired. The disgruntled and heavily armed region soon witnessed a massive mobilization against the Ethiopian army, before the two sides faced off in a fierce war that affected neighboring regions, in which Abiy Ahmed eventually tipped the scale, but after heavy losses Ethiopia set back years.
In addition to airports, roads, and infrastructure that were completely destroyed within the northern Tigray region, Ethiopia's economic miracle seemed in the wind after growth fell to 5.6% in 2021, the lowest rate the country has reached in two decades, according to World Bank statistics, and the economy was exacerbated by the war bill, which reached $ 950 million, according to Trading Economics, not counting the cost of material losses.
At the same time, the economy took another hit when foreign donors withdrew billions of dollars in financial support, rising from 18% before the war to 35% at the time of the peace deal. As a result, food prices have risen to a 10-year high. Apart from the collapse of the local currency against the US dollar, the United States imposed sanctions on the country to push it to end the civil war, and the European Union suspended aid estimated at 88 million euros, all of which forced the government to cut government public spending to solve other worsening problems such as the growing current account deficit and rising debt.
Repairs Account Statement
After five years in power, Abiy Ahmed succeeded in bringing the Grand Ethiopian Renaissance Dam project to a point of no return, but his electricity production project is facing a crisis that threatens the dream of the entire country. (Anatolia)
It was not only the Tigray war that undermined Ethiopia's development and economic reforms, as the country, which suffers from several structural problems, was exposed, like other countries in the world, to the shocks of the Corona virus that emerged in late 2019, and then the Ukrainian war. According to the World Bank report, the Ethiopian economy weakened after only one year of the reform plan, and Addis Ababa witnessed a collapse in the growth rate to reach 6.1% in 2020, from 8.5% in 2019, and remittances fell by 10%, exacerbating the currency shortage crisis, and foreign direct investment was severely affected after inflows fell by 20%, which contributed to the decline in reserve levels, which then amounted to three billion dollars in 2020.
After five years in power, Abiy Ahmed succeeded in bringing the Grand Ethiopian Renaissance Dam project to a point of no return, but his electricity production project is facing a crisis that threatens the dream of the entire country. While Addis Ababa has completed the construction of 412 km of electricity interconnection lines along its territory to the Kenyan border, Kenya has not done the same due to internal disputes, which means that Ethiopia will lose eight million dollars a month due to the delay in exporting electricity to which it aspired. The irony here is that Ethiopia succeeded in reaching wheat self-sufficiency after the Russian-Ukrainian war threatened supplies of global supply chains, but the Ethiopian economy is still facing a drought crisis in the southern regions. The United Nations estimates that the drought has killed more than one and a half million cattle in the Horn of Africa.
However, the most serious crisis threatening Ethiopia's economy, and Abiy Ahmed's own future, remains the accumulation of external debt, with a persistent trade deficit between exports and imports, jeopardizing the country's ability to repay. The volume of debt for the current fiscal year 2022/2023 is about $ 28 billion, representing about a quarter of the country's GDP, and the current government is facing a crisis represented by the rise in the cost of interest on debt due for the current year to $ 1.6 billion, at a time when foreign currency reserves have decreased to $ 1.5 billion, which is enough to cover import bills for one month at most, according to the latest forecasts of the credit rating agency "Fitch", which downgraded Ethiopia's rating to "CCC-".
After five years in power, punctuated by two years of war in the Tigray region, a slowing economy, a devaluation of the currency, annual inflation exceeding 33%, and a decline in the growth rate from 9.5% before the war to below the level the country was at before he came to power, the face of the country has changed to worse than it was before the rise of Abiy Ahmed, and the man is no longer "the godfather of Ethiopia and the maker of its modern renaissance" as he sought, and the Nobel Peace Prize that he received was probably slipped into his office shelves, while The battles grew louder in the midst of a civil war that has engulfed the country for two years. Today, Abiy's political project stands at a crossroads, while it seems that the man's success in solving his country's problems with neighboring countries, and mediating to solve the internal crises of neighboring countries, is offset by a major failure - so far - in carrying out his main task, which is to reformulate the social contract in Ethiopia and give it a real development model.