August 12-18, 2024
EOC asked to resign, ETB 2 million spurned, Gambella governors fired; Fractured TPLF holds General Congress; Ministry of Mines falls short; Mining designated a national security matter.
Economy and Business
A group of Ethiopia’s bondholders have expressed disappointment with recent government comments about reducing the bond principal by 20%, describing the proposed 20% reduction as “incompatible with a good-faith approach to debt restructuring” & inconsistent with the evaluation of Ethiopia’s economy.
2 weeks before the World Bank (WB) approved a $1.5 billion loan, PM Abiy sent a detailed July 11 letter to the WB President outlining the key agendas of the macroeconomic reform program. Meanwhile, a senior US State Department official expressed concern about Ethiopia’s macroeconomic challenges last week.
The Birr has lost 60% of its value as of August 12 amidst extraordinary volatility following the new forex policy, sparking anxiety amongst banks, businesses, and citizens alike.
The Ministry of Trade & Regional Integration announced that 1,671 businesses have been shut down and 628 traders have been detained while 182 traders have been released as of Aug 13 due to exploitative business practices following the forex reform. MOTRI also revealed that 21 cement, 7 metal, 10 corrugated sheet; 3 nail; and 2 ceramic businesses were closed for illegal price hikes. South regional officials announced the closure of 3,300 businesses & the arrest of 297 traders for hoarding & price hikes. Experts have called on the government to adopt a strict regulatory regime to mitigate the negative impacts of the forex reform.
During an Aug 16 panel discussion, the National Bank of Ethiopia (NBE) announced the introduction of a new daily forex monitoring for commercial banks, with disciplinary action already having been taken against 12 banks for under-invoicing customs exchange rates. Meanwhile, NBE has announced that it will suspend 2 mandatory bond purchases for banks in a bid to boost liquidity.
The Customs Commission announced that import duties will now be calculated based on the NBE’s indicative daily exchange rates following the forex reform, rattling businesses across sectors. Importers & their associations expressed opposition to the new directive, highlighting that resulting delays in transporting goods would impose additional costs & cause price increases of up to 30%.
In an Aug 9 statement, the European Chamber lauded the lifting of restrictions on importing luxury products but highlighted the negative impacts of the failure to lift forex restrictions on fuel-powered vehicles. This comes soon after the Ministry of Finance, the European Chamber in Ethiopia & the EU held a July 24 technical meeting to discuss challenges faced by European investors in the country.
Safaricom Ethiopia’s customer base grew by around 250,000 clients over the last fiscal quarter, bringing its total number of active subscribers to 4.6 million. However, its break-even target is expected to be further delayed due to the Birr’s depreciation. Meanwhile, Ethio Telecom has launched a rural connectivity project.
As part of a recent loan agreement with the World Bank, Ethiopia is set to increase electricity tariffs by at least 10% every 3 months during the first year of a 4-year package aimed at restructuring debt-ridden state-owned enterprises such as Ethiopian Electric Utility (EEU) and Ethiopian Electric Power (EEP).
An August 8-9 National Multi-Actor Partnership Consultation & Formalization Workshop identified irresponsible land governance, misuse of agricultural loans, & marginalization of local communities as major challenges impeding agricultural investment. Over half of Ethiopia’s agricultural land remains uncultivated.
The Ministry of Mines published an annual report indicating that the country exported $408 million worth of gold over the 2016 fiscal year, falling short of the $480 million targeted by officials. Tantalum exports brought in $131 million, a little over half of the targeted $235 million, while an unnamed natural gas venture registered over $825 million in investment capital.
In a bid to combat the entrenched illicit gold in the Tigray region, NBE is considering granting Ezana Mining a number of special privileges, including exemption from the credit cap imposed on banks.
An Aug 9 discussion forum on establishing resilient food systems has identified inadequate supply of improved seeds and mismatched supply & demand as key challenges to agricultural production & productivity. Meanwhile, a WFP resilience initiative is supporting farmers through crop insurance.
The NBE has proposed a new corporate governance bill aimed at improving the insurance sector’s stability and creating a robust financial market through stringent qualifications, oversight and administration.
During a 2016 performance evaluation, the Development Bank of Ethiopia (DBE) recorded improved performance in key financial metrics compared to previous years. Meanwhile, the African Development Bank recently approved a $40 million transaction guarantee facility to support Dashen Bank’s trade finance activities
Dashen Bank has introduced a Shoppers Club Card (SCC) & a Travelers Club Card (TCC) to enhance the shopping & travel experiences of customers who deposit between ETB 50,000 - 400,000 and ETB 500,000 - 2.5 million, respectively. SCC member benefits include a 5% discount at select establishments and the opportunity to purchase airline tickets at a discount or on credit, while TCC members also benefit from various loans and easy access to foreign currency.
Saudi-owned SBG Industry Plc has completed a $5 million expansion project to boost its marketing & production capabilities amidst preparations to launch a new juice brand.
Human Rights
The Ministry of Mines has ordered the Reporter to cease reporting on mining issues as “mining has become a national security issue”, similar to “military and intelligence issues”. This follows a series of investigative reports on the Ethiopian mining sector published by the Reporter over the last year, particularly on what increasingly appears to be entrenched corruption amounting to state capture in the sector, & its ties to both domestic & international armed conflict.
The Ethiopian Mass Media Professionals Association has called for a more open media environment and urged authorities to release journalists imprisoned for over 2 years without a verdict. Days later, EHRC and UNESCO held an Aug 13 discussion on establishing an association of journalists & legal professionals to provide legal support & protection for journalists facing rights violations. Read more about the challenges impeding investigative journalism in Ethiopia here.
The Africa CDC has officially declared the ongoing Mpox outbreak as a Public Health Emergency of Continental Security, leading Ethiopia to introduce strict health checks at border-crossing points. The country has not reported any Mpox cases, so far. Meanwhile, a South Sudanese hospital is sending patients seeking TB consultation & treatment to Ethiopia due to a lack of local testing services.
The Ministry of Health has announced that 531 of the 596 woredas affected by cholera & measles outbreaks have been fully cleared of disease, while response efforts continue in the remaining woredas. Meanwhile, a recent MSF report indicates that health infrastructure in the Tigray region is slowly recovering.
Drug shortages, rising costs, & proliferating substandard medication are taking a toll on the pharmaceutical sector, plunging the healthcare system into crisis.
The Confederation of Ethiopian Trade Unions (CETU) has requested that the government issue guidelines for wage adjustments for private sector employees.
The EU has pledged €150,000 and deployed an expert to support humanitarian efforts assisting communities devastated by deadly floods and landslides in July 2024. Meanwhile, Ethiopia has secured $97 million in US humanitarian aid.
A 3-year initiative is creating employment opportunities for migrants & returnees by addressing reintegration challenges through targeted vocational training. Meanwhile a WASH project is serving ~170,000 people in the Sidama region.
Almost 1.5 million livestock have been vaccinated under a livelihood-based intervention by the ICRC aiming to support pastoralists affected by the legacy of armed conflict in the Afar, Oromia & Somali regions.
Governance and Corruption
Several national sports associations have submitted a 9-page complaint letter to the Ministry of Culture & Sports calling for the suspension of the Ethiopian Olympic Committee (EOC), citing financial misconduct and violation of laws & procedures. Renowned athlete Haile G/Selassie urged the EOC leadership to resign, citing the country’s declining performance at the Olympics.
During a dinner reception for the national athletics team following the Paris 2024 Olympics, a marathon coach who was awarded ETB 2 million described the gift as an “insult” that “does not match our efforts” and returned the award before walking out. Elaborating on his grievances in this interview, he claimed that the award was lower than previous years and said he had wanted a car instead. Learn more about the incident here and watch the full exchange here.
Various sources have reported that wealthy & high-income churches & monasteries under the Ethiopian Orthodox Tewahedo Church (EOTC) are demanding bribes ranging from ETB 300,000 to 1 million from individuals seeking to secure or maintain administrative, secretarial and accounting jobs at the institutions. Acknowledging the problem, EOTC has halted new hires and established a committee to address the issue.
The Addis Ababa City Administration’s 2016 annual report has highlighted many challenges impeding improved service delivery, including involvement of intermediaries in the provision of government services, lack of leadership accountability, unsatisfactory implementation of an anti-corruption strategy, significant performance discrepancies between different institutions, and the failure to properly record and address unsatisfactory outcomes.
Construction due to the Road Corridor Development Project (RCDP) in Addis Ababa has led soil & dry waste to accumulate in drainage pipes, causing asphalt roads to flood during rainstorms. Although cleaning work has been ongoing since last week, the debris cleared from the pipes have been left on sidewalks, creating obstacles for pedestrians. Learn more about life in Addis Ababa here.
Over 350 heavy-duty trucks en route to customs offices have been forced to stop in Semera city, Afar region for 15-22 days after they were found to be carrying excess cargo. Truck drivers complained that they were prevented from continuing their journeys even after paying fines for the excess weight.
A National Multi-Stakeholder Forum has been established to facilitate the improvement of the land management system by formulating and implementing policies and legal frameworks related to land issues. This was announced during an Aug 8 discussion & research forum on agriculture investment.
Politics
During an Aug 15 emergency meeting, the Gambella Regional Council removed President Umud Ujulu and Deputy President Tekuay Jok from their positions, citing inadequate peace, security & development policies following an escalation of violence in the region in recent months. The Regional Council then appointed Alemitu Umud as the new Chief Administrator of Gambella region.
The TPLF pushed forward with its controversial General Congress (GC) on August 13, despite warnings from the National Election Board of Ethiopia (NEBE) that it would not be formally recognized & in the absence of 14 members of its Central Committee (CC), including Vice Chairman Getachew Reda, amidst serious internal fractures among its leadership and rank & file. A number of decisions were passed during the 4-day GC, including the suspension of all TPLF leaders who boycotted the GC. All the decisions were nullified by Getachew Reda’s faction, who denounced the GC as invalid & accused the TPLF of attempting to use it to eliminate rivals & usurp the authority of the Tigray Interim Administration (TIA).
TPLF’s Chairman announced that the refusal to restore TPLF’s legal status is tantamount to breaking the Pretoria Peace Agreement (PPA) during its August 13 GC. Meanwhile, the government accused the TPLF of violating the PPA after the party held its GC despite repeated warnings, asserting that the NEBE had already addressed the question of TPLF’s legality. The TPLF reiterated its refusal to re-register & called for the restoration of its old legal status. Getachew Reda said negotiations with the government will continue regarding the restoration.
Opposition Arena Tigray has condemned TPLF’s decision to hold its GC, while 3 other opposition parties issued a statement calling for the establishment of an inclusive regional government. Opposition EZEMA expressed concern about TPLF’s internal divisions, attributing the turmoil to “failure to properly implement the PPA”. Meanwhile, residents of Mekelle city expressed concern that the internal divisions could lead to conflict and called on the leadership to resolve issues through dialogue. Learn more about the TPLF’s internal divisions here.
The National Steering Committee issued an Aug 12 statement announcing plans to hold elections for interim local administrations in disputed areas of Western & Southern Tigray zones following the successful repatriation of IDPs to the Raya & Tselemt areas. The Raya Amhara Identity Commission has opposed this, claiming only Tigrayan IDPs were repatriated while Amhara IDPs remain displaced.
The Peace Council, recently established in the Amhara region to facilitate dialogue between the government & Fano, has reported unsuccessful efforts due to the lack of centralized leadership within Fano & the lack of coordination between actors in the peace process.
Elected NAMA representative Habtamu Belayneh, who had been detained & disappeared since February 2024, has finally returned to his home as of August 13. EHRC and NAMA have confirmed his release, but the identity of his captors & the location of his detention remain unknown.
The Union of Human Rights Organizations has published procedures and guidelines for the monitoring & evaluation of the national dialogue process.
Conflict and Security
During an Aug 13 forum, the Addis Ababa Peace & Security Bureau highlighted that internal conflicts within religious institutions could escalate into a security threat for the city over the upcoming year, citing 8 religious institutions currently experiencing internal administrative conflicts due to internal disagreements.
Clashes between Mareko Liyu woreda and East Meskan woreda over long-standing land disputes in the Central region resulted in 6 civilian deaths last week. Elders of both ethnic groups highlighted that the 5-year conflict had caused the death of many civilians on both sides, calling for peace and reconciliation.
Fano militants carried out Aug 7 & Aug 9 attacks in the Horro Guduru Wollega zone, Oromia region resulting in at least 15 civilian deaths & thousands displaced. Meanwhile, ethnic Amharas displaced from Tole woreda, West Wollega zone due to June 2022 ethnic massacres have returned and resumed farming activities.
UN OCHA reported that an Ethiopian humanitarian worker was kidnapped for ransom & killed by militias in the North Wollo zone, Amhara region. The Council of Ethiopian CSOs issued an Aug 14 statement calling for the protection of aid workers & reporting increased killing, kidnapping & looting in the region amidst the ongoing war. 8 aid workers have been killed in Ethiopia in 2024, with 6 of the deaths in the Amhara region. Meanwhile, Ethiopia’s kidnapping crisis continues.
The Tigray Teachers’ Association has condemned the brutal Aug 13 killing of a female teacher displaced from Western Tigray and living in Shire Indaselassie, amidst escalating security challenges in post-war Tigray.
OLA forces attacked a village in the Arsi zone of the Oromia region on Aug 13, resulting in widespread looting, 6 civilian deaths, including a priest, 3 injuries, and 400 households displaced. Residents say the village is undergoing a security crisis as half of it is controlled by the government & the other half by the OLA.
Geopolitics
The Foreign Ministers (FMs) of Ethiopia and Somalia began a 2nd round of talks in Ankara on August 12, aiming to ease tensions following the controversial ET-Somaliland MOU. The talks were indirect as both diplomats held separate meetings with the Turkish FM. Although Turkey’s FM hailed progress, the 2-day talks ended in a stalemate, with a 3rd round of talks scheduled for September 17.
Somaliland has accused Turkey of not respecting its sovereignty & questioned Turkey’s impartiality following unsuccessful ET-Somalia talks. Somaliland also reaffirmed its commitment to the implementation of the ET-Somaliland MOU.
The Ministry of Foreign Affairs has urged the AU & UN to carefully consider any post-ATMIS deployment to avoid "unexpected regional tensions". Egypt will deploy troops to Somalia for the 1st time next year, under a new peacekeeping mission dubbed AUSSOM. Meanwhile, Egypt & Somalia officially signed a military cooperation agreement on August 14.
South Sudan has announced its ratification of the Cooperative Framework Agreement (CFA) under the Nile Basin Initiative (NBI), bringing the formation of the Nile River Commission closer to fruition.
The Islamic Military Counter Terrorism Coalition (IMCTC) met with a delegation from the Ethiopian Military Attaché in Saudi Arabia on August 12 and briefed the delegation on key IMCTC counter-terrorism activities.
The government is prepared to arrange for the repatriation of ~150,000 Ethiopians in Lebanon if violence escalates amidst ongoing confrontations between Israeli & Hezbollah forces. Read more here about the security crisis in the Middle East.