Despite the country’s economic struggles and the dire humanitarian situation, the government’s actions are out of sync with the reality in the country, with public spending going to vanity projects even as living conditions worsen for millions of Ethiopians.
By Amanuel Dessalegh
February 27, 2024
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Ethiopia is going through a turbulent period reminiscent of its history of the 1980s, marked by civil war, famine, and a flailing economy. That episode ended with the fall of the Derg, the military dictatorship in power between 1974 and 1991, after hundreds of thousands of people had died from war and famine, and the country was utterly devastated. As the Derg during its tumultuous 17-year rule, Prime Minister Abiy Ahmed’s government has been stumbling from one crisis to another since coming to power in 2018, seemingly with no end in sight. Yet another civil war has followed the deadly conflict between the federal government and the then-ruling party of the Tigray region, the Tigray People’s Liberation Front (TPLF), which ended in a ceasefire in late 2022, after two years of fighting that left more than half a million dead and the Tigray region and neighbouring areas of the Amhara and Afar regions in an utter state of destruction. This time, the government is fighting its former allies, the Fano, an irregular militia from the Amhara regional state that fought on the government’s side during the Tigray war. There are already several credible reports of abuses by the army, such as extrajudicial killings, and indiscriminate bombings targeting civilians.
Large parts of Oromia, the country’s largest region, are under the control of another rebel group, the Oromo Liberation Army (OLA), which the army has failed to dislodge after years of fighting. According to the UN, widespread violence and drought have left more than 20 million people in critical need of emergency humanitarian aid.
The Tigray region, in particular, is on the verge of what its interim administration has described as, “a humanitarian catastrophe the likes of which have not been seen since the 1984-85 famine that claimed the lives of millions of people across Ethiopia”. While the federal government is downplaying the situation, credible reports of starvation deaths in Tigray and adjoining parts of the Amhara region have since emerged.
In the south and southeast of the country, pastoralist communities are grappling with the aftermath of a multi-year drought that decimated their herds. Moreover, at more than 30 per cent, soaring inflation has made life unbearable for most of the population. Basic food items such as the country’s staple grain, teff, have become unaffordable for many. In Addis Ababa, the capital, the salary of the average civil servant barely affords a room in a shared house.
A recent UNDP report indicates that poverty is on the rise, reversing the progress made in the previous two decades of fast economic growth. Shortage of foreign currency and insecurity have also forced hundreds of manufacturers to close shop in the past two years, putting thousands out of work. To make matters worse, last December, missed coupon payments of the US$1 billion Eurobond made international headlines, pushing the country’s credit ratings into junk territory.
Prime Minister Abiy Ahmed and his ministers, however, seem unbothered by the brewing crisis. Based on their public pronouncements and actions, one might assume that they are presiding over a thriving country.
The worsening living conditions of millions, even the genuine danger to their government posed by growing public resentment, does not seem to worry the people occupying the highest offices in the country. There is no better place to witness the prevailing mindset than the personal social media accounts of state officials where pictures of wheat fields and newly built city parks and resorts are often posted with declarations of the unfolding prosperity.
Missed coupon payments of the US$1 billion Eurobond made international headlines, pushing the country’s credit ratings into junk territory. Government ministers often inflate achievements or share false information to support their version of the situation in the country. In one such instance, the prime minister claimed – following rapid economic growth under his government – that Ethiopia’s economy is now bigger than all the economies of its neighbours combined.
Of course, this is far from being true. On a different occasion, the then State Minister of Planning and Development shared an unverified report that said the IMF expects the Ethiopian economy to expand by 13.5 per cent in 2023, with the words, ”Our situation was tough. But we were tougher”.
The actual IMF projection for 2023 was 6.1 per cent. Even a recent ban on the import of diesel cars – imposed mainly due to forex shortage for fuel imports – is celebrated as a positive development, a sign of modernisation.
Those are just a few notable examples of a trend that seems to be standard practice. This inflated sense of positivity appears to be the basis of decision-making when it comes to state expenditure. Despite the country’s economic struggles and the dire humanitarian situation, billions of dollars are allocated to projects with little to no economic return.
Public money is being spent lavishly on city parks, resorts, and museums. In terms of budget, the biggest current government project is not a mega-infrastructure project, as one might expect; it is a palace complex with a price tag of over US$10 billion, more than 7 per cent of the country’s GDP. For comparison, the Grand Ethiopian Renaissance Dam (GERD) – a hydroelectric dam expected to produce 5,000 megawatts of electricity once completed – is expected to cost US$4.2 billion.
Even in ordinary circumstances, for a country of Ethiopia’s size and development needs, the wisdom of spending such huge sums on projects with minimal economic returns is highly questionable. These outlays are even more perplexing in the face of recent budget cuts to several sectors, including education and new infrastructure projects. Regional states are struggling to pay the salaries of government employees.
In some cases, public school teachers have gone months without pay. The reconstruction of regions destroyed by civil war has also taken the back seat while more money is being poured into military hardware. Just last month, the military announced its acquisition of several fighter jets and military drones.
While the Prime Minister’s grip on power seems to be getting firmer following the end of the war in Tigray, it is far from being secure. A major reason for that is the actions of his government that are out of sync with the reality in the country. Addressing Ethiopia’s current problems requires a radical shift in direction. Short of such measures, it is not unlikely that the confluence of political, economic, and humanitarian crises may lead to catastrophic consequences comparable to those of the Derg era. For now, a shift doesn’t seem to be
Amanel Dessu is a writer and researcher based in Addis Ababa
