Basic Managing Ethiopia’s Unsettled Transition

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Date: Saturday, 23 February 2019

Report 269 / Africa 22 February 2019

Ethiopia’s charismatic new prime minister, Abiy Ahmed, has generated great excitement with initiatives breaking with the past. But he faces challenges as formidable as his promises are bold: he urgently needs to halt communal strife, smooth the road to elections and boost the ailing economy.

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What’s new? Ethiopia’s new premier, Abiy Ahmed Ali, has made peace with Eritrea, extended a conciliatory hand to opponents, and promised moves to free and fair elections, expanded political space and economic reform. But amid the exhilarating changes, insecurity proliferates, the number of internally displaced people mounts and the economy struggles.

Why does it matter? Abiy’s bold moves have won plaudits from Ethiopians who have been protesting for change since 2014 and from donors who are eager to see democratic reform. But he now must make changes to his governance style in order to defuse ethnic and communal tensions and garner support for critical reforms.

What should be done? In seeking to restore security and calm ethnic tensions, Abiy should govern more inclusively, working collaboratively with state institutions on reforms and involving civil society in reconciliation efforts. He should also begin preparing for the 2020 elections (ensuring broad political support for any violence-related delays) and focus on economic modernisation

Executive Summary

After four years of street protests, the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) elected Abiy Ahmed Ali prime minister on 2 April 2018. For many Ethiopians Abiy is a breath of fresh air. He admits the ruling coalition’s shortcomings, pledges reform, preaches unity and has made peace with Ethiopia’s old foe, Eritrea. Yet if Abiy has raised enormous expectations, he also faces daunting challenges. Insecurity has intensified and proliferated across the country, with communal violence tearing at the multi-ethnic fabric of Ethiopian society. Regional leaders demand more power. The economy is on life support, with foreign debt in excess of $24 billion, many young people without jobs and an old guard resistant to reform. There are no easy fixes for these challenges, but Abiy can give himself the best odds by focusing on three priorities – working to stop communal conflict, preparing for 2020 elections and reforming the dangerously weak economy.

The crisis that led to Abiy’s assumption of power was years in the making. Protests broke out in 2014 over discrimination against the Oromo – the country’s largest ethnic group – and spread to other groups, especially the Amhara, its second largest. Discontent with tough socio-economic conditions, as well as with the ruling party’s 27 years in power and its domination by a small, mostly Tigrayan, elite, was already widespread. The EPRDF, weakened by factional quarrels after the August 2012 death of strongman Prime Minister Meles Zenawi, struggled to contain the unrest. Meles’s successor, Hailemariam Desalegn, veered from cabinet reshuffles and political prisoner releases to crackdowns including new arrests of opposition leaders and demonstrators. In October 2016, a state of emergency brought temporary calm, but the protesters’ demands for political reform and socio-economic improvements still largely went unmet.

On 15 February 2018, Hailemariam resigned. By then the EPRDF elite – and especially its Tigrayan component – had lost its grip. With power dispersed among the security sector’s upper echelons, who were divided over whether to reform or protect the status quo, the EPRDF proved unable to steer the battle for succession. The Oromo People’s Democratic Organization, one member of the EPRDF coalition, stepped most assertively into the breach. Backed – in a break from tradition – by the Amhara National Democratic Movement, another EPRDF party, it propelled the Oromo nominee, Abiy Ahmed Ali, into the premiership. At age 42, Abiy is considerably younger than the old guard and, with the sympathy of many protesters, he appears well suited to the task of assuaging the grievances of the country’s neglected groups.

Changes during Abiy’s first months in office have been fast-paced. Abroad, he has signed a peace deal with Ethiopia’s long-time enemy Eritrea, while strengthening ties with other neighbours and with influential Gulf states, such as Saudi Arabia and the United Arab Emirates, with whom relations were previously fraught. At home, he has sent long-serving politicians and security officials into overdue retirement and detained others. He has assembled a media-savvy team to disseminate an inclusive message, condemning the EPRDF’s past abuses and promising free and fair elections and a more legitimate and inclusive political system. In order to reduce the country’s crushing debt, he has vowed to open up the state-dominated economy – a major shift from the developmental state model espoused by Meles. Hopes in Ethiopia are high.

At the top of the new prime minister’s priority list must be the restoration of security through calming ethnic tension and violence.

So far, Abiy has set in motion important reforms, but enormous obstacles remain. Many Ethiopians are impatient for change. Communal violence has spread with an intensity unprecedented in the past quarter-century. Ethnic militias are proliferating. Unrest in the capital in September 2018 left at least 58 dead and led Abiy to cancel a trip to the UN General Assembly’s opening week. Within the ruling party, no consensus exists on how to tackle the country’s many challenges. Factions both inside and outside the EPRDF disagree over how much power should be devolved to federal regions and, as Abiy avoids taking a position, regional leaders jostle for greater autonomy, often under pressure from ethnic hardliners. Abiy himself contends with growing nationalist sentiment among his own Oromo constituents, many of whom expect him to serve their interests above those of others. For now, generous Gulf donations are keeping the economy afloat, but sky-high national debt means that Abiy at some point will have to embark upon belt-tightening.

At the top of the new prime minister’s priority list must be the restoration of security through calming ethnic tension and violence. To encourage a positive national tone, Abiy should develop a governance style that matches his inclusive rhetoric. Working with ministries and the civil service to develop the reforms that they will implement can help dispel the impression shared by some that he is governing from a closed circle of co-ethnic and co-religionist advisers. It also can reenergise a bureaucracy that has been adrift. To improve prospects for a planned national reconciliation process, the prime minister should invite civil society – particularly the Inter-Religious Council, a multi-faith group that promotes dialogue among various segments of society – to play a bigger role. Elders, too, should take a more prominent part. The latter two groups may enjoy greater credibility in stimulating frank dialogue at the grassroots level over issues driving violence, including border disputes and perceptions of injustice – historical and more recent – since they are not direct players in forthcoming electoral campaigns.

There are other priorities, too. With the 2020 elections fast approaching (and local elections due in mid-2019), the administration has precious little time to prepare, and the same is true of a raft of political parties that have never before had the opportunity to participate in a credible election. Donors should work collaboratively with authorities and the incipient local civil society movement to help surmount formidable logistical challenges, including ensuring a transparent voter registration process that does not exclude those who have been displaced by violence from their homes. Abiy should reach out to the opposition to agree on a dispute resolution framework ahead of the vote. This step might minimise the temptation of those unhappy with the outcome to resort to violence.

Lastly, the prime minister will need to institute comprehensive economic reforms: creating opportunities for greater domestic and foreign investment; streamlining regulation; breaking up inefficient state monopolies; carrying out banking reform to free up lending to the private sector; increasing manufacturing and agricultural productivity and revitalising the long-neglected small and medium-sized enterprise segment of the economy. All these measures will be critical to begin producing jobs for the burgeoning population.

For their part, Ethiopia’s international partners should, through a coordination mechanism, support his reform efforts with quiet counsel and the substantial financial aid needed to breathe new life into an economy whose pre-existing weaknesses have been compounded by five years of unrest and capital flight. They should disburse these funds as soon as possible to help the new administration address festering grievances over mass youth unemployment, which some leaders exploit to drive violence. All the while, they should keep in mind the dangers of an overly rapid transition and advise Abiy to adopt policies that favour long-term stability.

What happens in Ethiopia matters well beyond its borders. It is Africa’s second most populous country and one of its largest. It is also one of its more geopolitically significant – the only major country on the continent to have escaped colonialism and the seat of the African Union. Abiy’s drive to introduce more legitimate and inclusive governance in this prominent nation bucks a trend toward authoritarianism in the region and is closely watched across the continent and further afield. The stakes are high. If the experiment succeeds, the result could offer a powerful example to others. Failure – and especially a further turn into large-scale ethnic violence – would have major negative implications for an already unsettled region. The hope is that Abiy can create a more open and prosperous society, with benefits for Ethiopia and the region. This will require that the government bring under control the forces the transition has unleashed.

Nairobi/Brussels, 21 February 2019 

A Timeline from the Fall of Ethiopia's Junta in 1991 to the Rise of Ahmed Abiy

I. Introduction

Nine months after Ethiopia’s new prime minister, Abiy Ahmed, assumed power, the country remains in flux and the trajectory of its transition uncertain. Long-simmering ethnic grievances have been compounded by elite disagreements about a range of issues, including the proper balance of power between the centre and regional states and how – or whether – to reform a state-dominated economy. The grievances are coming to a boil, threatening the country’s stability and perhaps even its unity.

Crisis Group has monitored Ethiopia closely since 2009, when it warned that “despite continued economic growth and promised democratisation, there is growing discontent with the EPRDF’s ethnically defined state and rigid grip on power and fears of continued interethnic conflict”.

Since then, and particularly after 2014, the country has become still more restive partly because political liberalisation – in a setting where authorities previously governed with a strong hand – has freed the population to object to perceived wrongs, sometimes in ways that have fed violence.

This report analyses how Prime Minister Abiy came to power in April 2018, the resultant opportunities and dangers, and the principal dilemmas that Abiy’s team confronts. His election generated great hopes and expectations, but while he has had some impressive successes, his government faces enormous challenges, and has thus far been unable to implement detailed policies. The report is based on interviews and correspondence with actors in the ruling party, the security sector, and the internal and external opposition, as well as intellectuals, activists and people from all walks of life in various parts of the country. Most requested that their identity not be revealed. Fieldwork was supplemented by interviews with other long-time observers of Ethiopia and the Horn of Africa, in addition to secondary sources.

II. Anatomy of a Crisis

In May 2015, the EPRDF – composed of the Tigray People’s Liberation Front (TPLF), the Amhara National Democratic Movement (ANDM), the Oromo People’s Democratic Organization (OPDO), and the Southern Ethiopian People’s Democratic Movement (SEPDM) and its associated satellite parties – won every seat in parliamentary elections.

On the surface, Ethiopia appeared quiet and the EPRDF in full control. The environment seemed very different from that of ten years prior, when hotly contested elections and disputed results had led to rioting, repression and the detention of opposition leaders.

Beneath the surface, however, the country was headed toward a crisis. The contradictions between the political settlement of 1991, which instituted a form of ethnic federalism, and late Prime Minister Meles Zenawi’s drive to centralise a developmental state were becoming increasingly unmanageable. The informal networks Meles had created to control the regional governments and the ethnic parties were weakening.

Economic challenges, including chronic foreign currency shortages, stuttering growth, inflation and pervasive corruption, exacerbated the political problems. Social discontent mounted in parallel to political tensions, especially among youth – people aged 15-25 years – in large provincial towns.

With a weak and fragmented opposition, mostly confined to the diaspora, as well as restrictions on freedom of speech and assembly, the restless population increasingly channelled its grievances and calls for change within regional states and the ethnic parties in the ruling coalition. Frequently, these grievances focused on ethnic imbalances in the system.

Ethnic undertones to the discontent sometimes surfaced, triggering communal violence.

A. Popular Protests and Communal Clashes

Protests first erupted in Ethiopia’s largest and most populous regional state, Oromia, in April 2014, in response to the federal government’s Addis Ababa Integrated Regional Development Plan (also referred to as the Master Plan), which aimed to widen the capital city’s jurisdiction over parts of Oromia.

The plan was a lightning rod for dissent from the system as a whole.

Oromo youths took to the streets in over two hundred locations across the region, defying security forces that deployed in ever larger numbers.

Protesters opposed not only what they perceived as continued TPLF domination of federal political, economic and security institutions, but also what they viewed as the pliant and corrupt OPDO, which they accused of selling off Oromia’s resources – land in particular. They also gave voice to the deep Oromo resentment of historical neglect by the capital. Demonstrations continued sporadically throughout 2014 and early 2015, when the EPRDF finally halted the Master Plan in its tracks. But in November 2015, just six months after the EPRDF’s massive electoral win, protests broke out again. The government responded with a mix of repression and vague promises of reform (tiluq tihadeso). In January 2016 the ruling party formally abandoned the Master Plan and promised to change the OPDO leadership. It did not, however, follow through right away on the latter pledge.

Only nine months later, in September 2016, was Lemma Megersa, a former speaker of the Oromia State Assembly, and a man seen as acceptable to the protesters, elected OPDO chairman.

Though a longstanding OPDO member, Lemma had grown exponentially more popular since he openly supported the protests that began in 2015. The concession was not enough, however, and protests continued, gaining critical momentum in early October. At the annual Oromo Irreechaa (Thanksgiving) festival in Debre Zeit, demonstrators took over the stage and chanted anti-EPRDF slogans. Security forces fired into the crowd, setting off a stampede that killed scores of people. Thereafter, protesters blocked the main roads in Oromia, attacking government properties and foreign-controlled businesses.
The Oromo and Amhara protests took EPRDF leaders by surprise. They underestimated popular discontent and overestimated their capacity to manage it.

A parallel protest wave began in Amhara regional state in mid-2016. As in Oromia, the initial grievances mostly concerned land – namely, the incorporation into Tigray regional state of historically Amhara-populated lands.

They also included resentment of Tigrayan domination and neglect. In both Oromia and Amhara, some local elites and elements of the regional security forces sympathised with the protesters. For the first time, the grievances of the Amhara and Oromo – the two largest ethnic groups in Ethiopia – converged on direct rejection of the TPLF-led federal government and its repressive methods.

Ethnic violence escalated in tandem with the protests. Tensions between Oromo and ethnic Somalis turned lethal in Oromia and Somali regional states, especially along the disputed border between the two.

Allegedly, the federal government used the Liyu police – a paramilitary ethnic Somali militia controlled by the Somali regional state president, Abdi Iley – to quash dissent in Oromia. Oromo militias, for their part, attacked Somali villages, purportedly with the support of Oromia’s security forces. Meanwhile, in parts of Amhara region, locals attacked Tigrayan neighbours. Many families fled, fearing deadlier attacks. Though not unprecedented, the scale of communal violence and internal displacement was shocking. The government’s initial response – at both the federal and regional levels – lacked purpose and urgency.

Indeed, the Oromo and Amhara protests took EPRDF leaders – confident in their ability to self-correct and in the party’s control of the grassroots – by surprise. They underestimated popular discontent and overestimated their capacity to manage it.

After the extent of the unrest became undeniable, they reacted slowly, muddling through with a mix of strong-arm tactics and conciliatory talk. Foreign partners pressed the party to make concessions, but for nearly two years the government did little.

On 9 October 2016, the federal government declared a state of emergency, allowing it to deploy the army nationwide, shut down communication lines, limit freedom of speech and make arbitrary arrests. It also created a Command Post – a committee nominally headed by then-Prime Minister Hailemariam Desalegn but dominated by the army and security services – that in essence replaced the cabinet.

It was the first time since the 2005 elections’ aftermath that the government had introduced a state of emergency. Even some Ethiopian officials, however, argue that the measure was merely a continuation of an authoritarian trend that began in 2005 and subsequently was enshrined in draconian law and practice.

Starting in 2007, the ruling party had narrowed political space by passing legislative restrictions on non-governmental organisations and media outlets, as well as by giving itself broad anti-terrorism powers that extended its reach down to the household level. Before the 2010 elections, it inaugurated a “one to five” system, whereby it delegated a local party cadre to oversee every group of five households in the country. This cadre was to push the party line and collect intelligence.

On 1 November 2016, the government finally made a political concession, announcing an extensive cabinet reshuffle.

In itself this move did not stop the protests, but in the meantime the state of emergency allowed the government to ratchet up repression. By mid-November, by its own official count, the government had detained 11,607 people, just a month after the measure came into effect. The arrests quickly halted the protests’ momentum. The EPRDF leadership then assumed that it had time to regain control of the situation through its usual slow-paced internal processes.

B. The EPRDF’s Internal Fissures

Another backdrop to the protests was public frustration with the extended EPRDF leadership crisis following Prime Minister Meles Zenawi’s death in August 2012.

During his two decades in power, Meles had made the political and security spheres both responsible to and dependent on him. His unexpected death strained not only the increasingly intertwined party and federal institutions but also relations between the federal government and more assertive regional states. The party was unable to select and empower a new generation of leaders.

It did manage to convince foreign partners that the transition from Meles to his successor, Hailemariam Desalegn, had been smooth and sufficiently legitimate.

Under Hailemariam, the government continued to deploy Meles’s revolutionary, patriotic and developmentalist rhetoric. It struggled, however, to respond decisively to shifting domestic and regional dynamics. The EPRDF elite was intent on maintaining de facto single-party rule and their place therein. But without Meles they lacked unity of purpose beyond self-preservation. Their personal rivalries were already well developed; indeed, Meles had exploited rifts among them to maintain his grip on power.

By 2014 the EPRDF had begun to admit to shortcomings including corruption, poor leadership and inefficient bureaucracy at both the national and local levels.

It initiated a process of what it called critical self-evaluation (gimgema), touting its leadership renewal (metekakat) and fight against graft, and promising deep reforms (tiluq tihadeso).

But it was too little, too late.

The TPLF’s own increasingly visible internal struggles enhanced the opportunity for regional parties to exercise greater autonomy.

Internal quarrels crippled the party’s ability to implement reforms as the street protests gathered steam. ANDM and OPDO leaders saw Meles’s absence as an opportunity to assert their relevance within the ruling coalition.

The OPDO was the more aggressive of the two, and new chairman Lemma Megersa – the popular protest sympathiser – distanced himself from the TPLF. The EPRDF’s fourth pillar, the SEPDM led by Prime Minister Hailemariam, appeared to follow the TPLF’s line.

After Meles’s death, frictions within the ruling coalition played out across a number of fault lines. The TPLF’s own increasingly visible internal struggles enhanced the opportunity for regional parties to exercise greater autonomy. Generational strife emerged between an old guard of revolutionaries and younger technocrats. Discord also grew between TPLF elements based in Addis Ababa, and those in the Tigray regional state administration.

Both the intra-TPLF and the cross-factional fissures undermined the EPRDF, which was not designed for collective management. Amid the animosity, three main trends emerged. First, and in contravention of the constitution, the Tigrayan-dominated military and security services played an ever greater political role, in addition to their centrality to the country’s economy.

Secondly, regional administrations tried to grab more executive power in parallel to their parties’ challenges to the TPLF’s dominance within the EPRDF. Thirdly, the ruling elite’s determination to protect their individual positions, and their economic interests in particular, prevented a dynamic, reform-oriented response to the popular unrest. Action taken against allegedly corrupt ministers and officials appeared selective and politicised, leaving the public again sceptical of the party’s commitment to change.

C. Economic Change and Social Malaise

In 2006, Meles began a radical shift in Ethiopia’s economy, which accelerated in 2010 with the first five-year Growth and Transformation Plan – a nationwide project strictly controlled by the state. The developmental state was to drive and transform the economy. Ethiopia would achieve middle-income status by 2025 by sustaining double-digit growth, and in parallel would attain the Millennium Development Goals by 2014/15.

The plan explicitly linked growth, led by exports, to social development and nation-building.

The first five-year plan, and its 2015-2020 successor, were designed to shift the economy from an agricultural to a manufacturing base, and included a massive expansion of transport links and hydro-electric power, mostly through the development of huge infrastructure projects.

The government contracted enormous loans with foreign partners, notably China, and leased extensive land to both foreign governments (especially Gulf countries) and private companies to quickly acquire hard currency.

The ambition was laudable, and official statistics (though contested) recorded substantial growth. Yet while double-digit growth continued for a decade, its macro-economic impact was limited. The manufacturing sector’s share of the economy remained intractably low – 4 to 5 per cent of GDP, just where it had been since 1974.

Only eight countries in the world have a smaller manufacturing sector relative to population than Ethiopia’s. The work force remained unskilled and despite investment, infrastructure, especially power and transport links, stayed woefully inefficient. In spite of the dramatic transformation in some parts of the country, not least Addis Ababa and regional capitals, Ethiopia remained largely rural and agrarian.

The double-digit growth, moreover, came with adverse consequences. It was driven mostly by large-scale government investment, sustained by extensive, mostly Chinese loans.

As a result, Ethiopia’s balance of payments deteriorated, and foreign currency reserves fell, becoming a key concern – not least for private enterprises. Growth was further accompanied by a decade of constant devaluation of the local currency, the birr, to favour exports, followed by high inflation and falling real wages. This predicament became acute as short-term, interest-free loans from foreign partners matured after 2014. The government based its strategy to maintain double-digit growth while also servicing debt on higher levels of foreign direct investment and tourism revenues, neither of which arrived on schedule.
Tolerance of grand corruption at the top has allowed petty bribery to pervade government offices over the last decade.

Popular resistance to state-led, foreign-funded economic transformation was growing. Protests in 2015 and 2016 damaged foreign investments in, for example, factories and flower farms, as well as state-led projects.

Economic growth did not generate enough jobs. According to local economists and Western diplomats, the country, with its burgeoning population, needed to create at least two million jobs annually. Officially, it met only one third of that target. Expanding tertiary education raised among many young graduates expectations that the job market could not fulfil. The government also kept workers’ pay low to ensure that Ethiopia remained an attractive destination for foreign investment. As a consequence, wages – already dropping in real terms due to the birr’s devaluation – lagged far behind rising prices for staple foods, basic commodities and other goods.

Since the mid-2000s, life for average urban Ethiopians – not necessarily the country’s poorest – has become ever harder. This is particularly true for state employees. The gap between the very rich and everyone else is yawning.

The urban middle class are frustrated that their expectations of greater affluence cannot be met – especially as compared to families in the diaspora. In the main cities, rent not wages drives the economy, especially after the post-2006 construction boom. Many Ethiopians believe that the TPLF elite and its business associates dominate the rental market, which much of the population increasingly views through an ethnic lens. By the government’s own acknowledgement, high-level corruption has become endemic. Tolerance of grand corruption at the top has allowed petty bribery to pervade government offices over the last decade.

III. Abiy Ahmed Takes the Reins

A. A Wider Political Crisis

As of mid-2017, none of the drivers of popular protest had been addressed, and economic hardship was still unsettling an already angry and ethnically polarised population. The government, however, was convinced it had the discontent under control and lifted the state of emergency that August, earlier than expected. Some of Ethiopia’s external partners were relieved. Yet, protests quickly resumed.

Demonstrations re-emerged in Oromia, Amhara and the major cities, and then spread, as new protesters aired additional grievances against the central government and other regional administrations.

Apparently in response, on 3 January 2018, the government released a number of political prisoners and announced the closure of the notorious Maekelawi jail, which had held important dissident journalists and politicians. The gesture did not appease protesters, however. An incipient Oromo youth movement called Qeerroo (loosely translated, “young bachelor” in Afaan Oromoo) attempted to block the capital’s main streets, compelling the EPRDF to release another set of political opponents, journalists, bloggers and ex-army officers on 14 February.

The following day, in a surprise announcement, Hailemariam resigned as both prime minister and EPRDF chairman, in what he described as a “bid to carry out reforms that would lead to sustainable peace and democracy”.

Security forces struggled to contain further protests, prompting the government to declare another six-month state of emergency. Though the response was familiar, this time the government’s crackdown was less determined. The two interlocking aspects of the crisis – popular protests and the EPRDF’s own turmoil – had gained irresistible force.

The party’s internal friction had taken its toll on regional and federal institutions.

Regional state administrations and their ethnic constituencies became more autonomous of the federal government, notably by asserting their prerogatives in security matters. At the federal level, the TPLF’s hegemony within the EPRDF faded. Informal networks that until then had managed to keep a lid on instability within the party were collapsing and centres of power multiplied. The government secured approval for the new state of emergency only by a narrow margin, with most OPDO parliamentarians voting against it or abstaining.

The military top brass, the security services and TPLF old guard tried to stand in for the missing party leadership but lacked sufficient unity to act decisively. They could not send in the army, as most generals refused to get involved in repression, possibly to maintain their branch’s status as a symbol of national unity.

The crackdown on protests faltered. Regional and local police in both Amhara and Oromia states again refused to confront the protesters. Where they did intervene, it was to prevent federal security services from treating their communities too brutally.

A few days after the state of emergency took effect, the government released still more prominent political prisoners.

Its wavering between crackdowns and concessions further emboldened the protesters, who skirmished sporadically with security forces in areas of Oromia and Amhara regional states.

More worryingly, communal tensions grew acute, with local majority groups targeting minorities. Clashes broke out again between Oromo and Somali in different areas of the two regional states, displacing many; Tigrayans were forced out of entire areas of Amhara; Amharas were evicted from Oromia; Wolayta, a small ethnic group from the Southern Nations and Nationalities and People’s Region and the tribe of former Prime Minister Hailemariam, were expelled from areas of Oromia.

Physical fights also broke out among ethnic administrations over disputed regional boundaries. The total number of new internally displaced persons in 2018 reportedly reached more than 1.4 million.

The protests began to hobble the already staggering economy. Inflation spiked, as foreign currency became ever scarcer.

Flagship projects – including the Great Ethiopian Renaissance Dam (GERD) being built on the Blue Nile – ground to a halt. Shaken, in February the EPRDF’s ethnic parties convened their respective executive and central committees to prepare for the election of a new EPRDF chairman (except the TPLF, which had already had its own election in November 2017).

The OPDO again acted most assertively and autonomously. On 22 February, it passed its chairmanship from the popular Lemma Megersa – who remained Oromo regional state president – to the region’s vice president and then OPDO secretary, Abiy Ahmed Ali. At the time, Abiy was a low-profile member of the reformist OPDO caucus known as “Team Lemma”. Unlike Lemma, however, he was a federal parliament member, and thus eligible for the premiership.

Observers interpreted his appointment as an opening bid for the EPRDF chairmanship and the prime minister’s portfolio. No other party seemed thus prepared.

The ANDM, despite significant grassroots pressure to choose a reformist leader, opted to maintain the status quo, and confirmed Deputy Prime Minister Demeke Mekonnen as party chair and Amhara regional state President Gedu Andargachew as his deputy. The last party in the EPRDF, the SEPDM, elected the head of the EPRDF Secretariat, Shiferaw Shigute, seen as a loyal TPLF ally, to replace outgoing Prime Minister Hailemariam as chairman.

The scheduled EPRDF Central Committee meeting to discuss the political response to the crisis, including the election of a new chairman (who would become the new prime minister) was delayed for weeks due to heated internal disagreements.

When the committee finally gathered, the TPLF declined to offer its own candidate, suspecting the other coalition members would not support another Tigrayan prime minister, and instead supported Shiferaw. The OPDO, as expected, presented Abiy and, surprisingly, the Amhara supported him after Demeke withdrew at the last minute when it became clear he did not have enough support. In addition, by backing Abiy, Demeke could keep his role in the party and the post of deputy prime minister. Abiy was elected EPRDF chairman on 27 March, with 108 of 169 votes.

On 2 April, the parliament swore him in as prime minister.

B. Abiy’s High-octane Ten Months

The new prime minister is a former army and intelligence officer who was little known among the Ethiopian public or in the wider world.

Though Abiy’s patron Lemma Megersa found little favour with Meles Zenawi, some reformers within the EPRDF still saw Abiy as too close to the TPLF because of his role in the intelligence services, particularly the Information Network Security Agency. His ambition, meanwhile, earned him the suspicion of TPLF grandees. But at the time of his ascension, he was popular among other EPRDF elites. A reformist Oromo, and a devout evangelical Protestant Christian with a Muslim name, he had the right profile to reassure several disgruntled segments of Ethiopian society. He also was relatively acceptable to the Ethiopian Orthodox Church, a key political constituency in Ethiopia despite the professed separation between church and state.
[Abiy] has established a direct connection with the people, unmediated by the party.

Abiy embarked on a charm offensive immediately after his election, visiting almost all the regional capitals in an attempt to ease communal tensions. He was more candid about the country’s challenges than any leader in memory. He preached not just national reconciliation but love and forgiveness to various Ethiopian constituencies, at home and in the diaspora.

It did not hurt that he is multilingual, fluent in the country’s three main languages, Amharic, Oromiffa and Tigrigna.

Importantly, he has established a direct connection with the people, unmediated by the party.

His approach found a receptive audience among many Ethiopians eager for a new national narrative. In a matter of months, Abiy built up a public persona, using social media, especially Twitter, to great effect – a radical departure by a ruling party that has traditionally been suspicious of the media. His telegenic delivery and inclusive rhetoric won over huge swaths of the population, mostly youth, protesters and marginalised communities, such as his own Oromo, as well as the Amhara, Afar and Somali. For a time, mass rallies in support of Abiy replaced protests against the government. On 23 June, millions attended a gathering in Addis Ababa to hear him speak. When a grenade thrown in the crowd killed two and injured 150 more, hero worship reached its peak, as supporters believed their new political idol to be in peril.

By rapidly shifting the focus of debate on various domestic and foreign policy fronts, Abiy managed to both outpace and wrong-foot critics inside and outside the system. The sheer speed and breadth of the changes he has initiated has enabled him to appeal to many constituencies without giving entrenched interests time to block his agenda.

On 19 April, he presented a new cabinet to parliament that, despite including some veteran ministers, was sufficiently fresh and above all representative of various ethnic groups to indicate a substantive political shift. As communal strife expanded to new places, including the Southern Nations, Nationalities and Peoples regional capital, Hawassa – with people understanding that protests could draw attention to their grievances – Abiy called upon all regional presidents and local administrators who could not contain the violence to resign.

The new prime minister also ordered the release of thousands of political prisoners, including Andargachew Tsige, secretary general of the opposition group Arbegnoch Ginbot 7, abducted in June 2014 by Ethiopian intelligence operatives in Yemen.

On 5 June, he cancelled the state of emergency two months before its planned end date, and legalised opposition groups long classified as terrorists. He pardoned exiled (some of them armed) opposition movements, which he then invited to return home and engage in peaceful contestation for power.

Abiy also publicly confronted past abuses of power. In parliament he accused the mighty security services of terrorising the population.

On 7 June, he acted against men traditionally at the core of state power and long considered untouchable, removing Army Chief of Staff Samora Yunus and National Intelligence Security Service Director General Getachew Assefa. In June, he conceded, again in parliament, that the EPRDF was tainted by corruption. More dramatically, he decided that the over $24 billion national debt required less state developmentalism – the economic approach that had been an article of faith for the last decade – and more market-led capitalism, including the privatisation of major national enterprises.

He also reached out to the diaspora, much of which was previously intensely critical of the ruling EPRDF, traveling to U.S. cities, such as Washington, Minneapolis and Los Angeles, with large Ethiopian populations, as well as to Germany, and holding well-attended rallies.

In a ceremony in July, he oversaw the reunification of the U.S. and Ethiopian branches of the influential Ethiopian Orthodox Church, split since 1992.

The new prime minister also abandoned some of Meles’s core foreign policy tenets.

After a first visit abroad to immediate neighbours Djibouti, Sudan and Kenya, Abiy headed to the Gulf in mid-May. There he initiated a rapprochement with Saudi Arabia and the United Arab Emirates (UAE), with which Ethiopia had been at odds due both to Meles’s security strategy – which viewed Riyadh, and by extension its ally Abu Dhabi, as strategic adversaries – and to Ethiopia’s more developed ties with these monarchies’ rivals, Turkey and Qatar. He did not break off contacts with the latter, but his outreach to the Saudis and Emiratis paid off handsomely. Emirati Crown Prince Mohammed Bin Zayed visited Addis Ababa on 15 June, signing off on $3 billion in aid and investment. The injection of Gulf cash provided an economic boost and appears to have accelerated ongoing attempts to end the two-decade frozen conflict with Eritrea.

Even before the crown prince’s visit, on 5 June, Abiy had declared that Ethiopia accepted the Ethiopia and Eritrea Boundary Commission’s ruling in full and without conditions – a radical shift from Meles’s position.

This statement paved the way for high-level exchanges, culminating in Abiy’s 9 July visit to Asmara, reciprocated by Eritrean President Isaias Afwerki’s three-day official visit to Addis Ababa on 14 July. In a matter of weeks, the two countries appeared to set aside nearly two decades of animosity and proxy conflict, reinstated full bilateral diplomatic and economic ties, reopened road links, and resumed flights between their respective capitals. The rapprochement could mark a turning point in relations between the two countries and pay enormous dividends.

The warming relations with Eritrea, which hosted a number of Ethiopian armed opposition groups, also gave new impetus to resolving several long-running rebellions. The government signed a peace agreement in August 2018 with most of the rebel Oromo Liberation Front (OLF) and in October with the Ogaden National Liberation Front (ONLF).

For the prime minister and his government to maintain bureaucratic, public and donor support for his programs, he should provide more details and rationales for the policy choices his administration is making.

Lastly, by relinquishing Ethiopia’s key role in the Intergovernmental Authority on Development’s mediation of the South Sudan stalled peace process, Abiy paved the way for Sudan and Uganda to move those talks forward.

On 10 June, he travelled to Cairo in an effort to improve Ethiopia’s relations with Egypt, promising that his country would not harm Egyptian interests in maintaining an adequate flow of the Nile waters when filling the massive reservoir of the Ethiopian GERD dam on the Blue Nile. In a few short months, in other words, Abiy had torn up Ethiopia’s traditional foreign policy playbook.

Abiy’s significant and welcome change of direction did not spring out of nowhere. Many of his initiatives had been put in motion by former Prime Minister Hailemariam Desalegn’s administration, including the dramatic breakthrough with Eritrea.

But Abiy was able to carry them through more decisively. A senior EPRDF official said:

Little of what Abiy has been doing has not previously been discussed within the party. Abiy was the right person at the right time to put through what we had been discussing for over a year.

The most notable difference is that Abiy addressed issues that Hailemariam’s administration lacked the authority to tackle. He has also shown unprecedented willingness to admit the government’s culpability in provoking the grievances that led to the popular protests and communal strife. He has been direct, avoiding coupling such admissions with long, opaque processes of party self-evaluation or blaming external and internal enemies – the EPRDF’s default options in the past.

His reform agenda still faces a steep climb, but the contrast with previous decades is stark.

To date, however, much as Abiy’s pronouncements have generated great excitement and enthusiasm, many policy details remain unclear and critics question how far he has thought through his program of change.

In particular, the details of the Ethiopian-Eritrean rapprochement and the peace agreements with the OLF and ONLF have yet to be fully revealed.

For the prime minister and his government to maintain bureaucratic, public and donor support for his programs, he should provide more details and rationales for the policy choices his administration is making.

IV. Internal Challenges and Opportunities

Ethiopia is still undergoing the political and economic transition that began with Meles Zenawi’s death in 2012. While Abiy has brought a welcome new tone and direction to the government, Ethiopia’s road to lasting reform is likely to be rocky. The future of the ruling coalition, which brought Abiy to power, remains uncertain, with each of its four parties under pressure from both internal and external harder-line rivals.

Successful reform will require Abiy to breathe life into the civil service, given that a number of ministries are adrift after a period without strong leadership. Ensuring competent reformers take the helm of key security, defence and legal institutions is particularly important.

Amid all the challenges he faces, however, three stand out. First, Abiy must begin to calm rising ethnic tensions and ethno-nationalism. He must also develop a clear roadmap to prepare the country for elections in 2020, and lay the political groundwork for delay if violence in the regions makes that impossible. Finally, he must undertake long-overdue reforms to modernise Ethiopia’s economy, stimulate growth and investment, and create jobs for young people.

A. Calming Ethnic and Communal Conflict

Insecurity driven by rising animosity among Ethiopia’s ethnic groups is the gravest challenge that Abiy faces. Longstanding grievances among Ethiopia’s ethnic groups are becoming more acute. The forces that kept them at least partly in check are loosening, and all around the country groups that see each other as competitors are jostling for power. Though anti-government protests have largely subsided since Abiy became prime minister, communal violence that rose in parallel with them over the past few years has spread and worsened, and ethnic militias are growing in size and reach. The number of persons displaced due to conflict in Ethiopia has reached 2.2 million; more than half of them have been displaced since January 2018.

At the same time, ethno-nationalist sentiment around the country is on the rise, with ethnic movements using increasingly incendiary rhetoric about other groups and pressuring parties within the ruling coalition toward more confrontational policies.

1. Restoring order, containing disorder

Parts of the country have suffered a surge in ethnic violence. In Jijiga and other parts of the Somali regional state, violence erupted on 4 August 2018, following attempts by the Ethiopian army to dismantle the ethnic Somali force (the Liyu police) and remove regional president Abdi Iley.

Many locals saw Iley and that force as responsible for human rights abuses; indeed for years some had asked the federal government to step in.

For its part, the government viewed Iley as a pro-TPLF remnant opposed to the prime minister. He was forced to resign on 6 August and arrested on 27 August; the government appointed Mustafa Omer – a former UN official and long-time Iley critic – in his stead.

But if much of the Somali region’s population greeted the prime minister’s move with relief, others perceived it as an Oromo offensive against ethnic Somalis and reacted violently. Non-ethnic Somali groups living in the regional state bore the brunt of their anger.

Inter-communal conflict in Jijiga quickly spread, displacing 141,410 people, most of them non-ethnic Somalis, though many gradually came home as calm was restored.

These events capture the dilemma Abiy faces: to curb the power of regional strongmen – whose behaviour is often a source of local grievance – without provoking an ethno-nationalist backlash, driven in part by perceptions (warranted or not) of Oromo chauvinism.

Somali regional state has since quieted somewhat. Over time, Iley’s resignation helped ease tensions. Moreover, the federal government signed a peace agreement with the previously banned Ogaden National Liberation Front (ONLF), a separatist ethnic Somali rebel force fighting the government for decades. In the second week of February 2019, the Somali regional state announced that the ONLF had agreed to disarm and that its members would be reintegrated into its security forces and the civil service.

This deal was a step forward, and authorities should follow through on it swiftly to improve prospects for peace in the region by offering young armed men an alternative to a life in crime and ethnic violence.

Tensions remain, however, among Oromo, Somali and Abo-Somali in contested and mixed areas, particularly along the border between the Oromia and Somali regions and in cities like Moyale and Dire Dawa where problems between the two groups continues to escalate.

Among non-Oromo ethnic groups, some fear that they have turned the page on years of Tigrayan supremacy only for the Oromo to dominate.

Communal violence also has broken out elsewhere in the country, including the regions of Amhara between Amhara and Tigrayan communities, and in Benishangul Gumuz between the Gumuz community and ethnic Oromo and Amhara people. This intra- and inter-ethnic violence is driven by many factors, including historic and personal grievances, access to land, the desire for self-determination and the manipulation of those grievances for political purposes.

In September 2018, violence reached the areas surrounding Addis Ababa, reportedly informing Abiy’s last-minute decision not to attend the opening week of the UN General Assembly.

Those clashes were prompted by the jubilant return of exiled rebel Oromo Liberation Front (OLF) fighters, a result of the peace agreement brokered by Eritrea between the Ethiopian government and the OLF. Ethnic skirmishes broke out in the days ahead of their arrival, as Oromo youth (Qeerroo) replaced national flags in the capital and surrounding areas with the OLF banner, provoking the anger of, and clashes with, other ethnic groups living in Addis Ababa. Oromo militias sympathetic to the OLF forced hundreds of non-Oromos from their homes on the capital’s outskirts. The disturbances led to 58 deaths. Human rights groups reported social media awash in hate speech against non-Oromos.

Among non-Oromo ethnic groups, some fear that they have turned the page on years of Tigrayan supremacy only for the Oromo to dominate.

That Abiy’s administration forced out Iley but has not taken similar action against Oromia officials implicated in the violence in Oromia has reinforced perceptions among some that Abiy is biased in favour of his ethnic group, which makes it more difficult for him to calm tensions. It does not help that most of the premier’s close advisers come from the OPDO (now renamed the Oromo Democratic Party), in particular the erstwhile “Team Lemma”, a reformist OPDO caucus led by Oromo regional state president Lemma Megersa, as well as Oromos previously living in the diaspora. Many in the EPRDF believe he is preferentially appointing ethnic Oromo and personal acquaintances to key positions in the powerful defence, security and legal sectors.

2. The ethnic federalism gap

The Abiy administration’s still-unformed position on ethnic federalism will have enormous bearing on relations among Ethiopia’s different communities and is therefore a source of both intense interest and brewing tension. In principle, Ethiopia’s ethnic federal system devolves significant authority to ethnic communities in each of the regional states (subdivided into administrative zones) and two city administrations (Addis Ababa and Dire Dawa). Yet the 1995 constitution is imprecise about the division of powers between centre and periphery and about each ethnic community’s right to self-determination, which potentially ranges from autonomy to independence.

Among Ethiopians, no consensus exists on the appropriate extent of federalism, though in the past (especially under Meles Zenawi), the prime minister wielded considerable power through the EPRDF and informal networks.

Abiy has avoided taking a clear position on ethnic federalism. Though he rode a wave of regional and ethnic grievance to his current position, since assuming high office he has made frequent reference to Ethiopiawinet (Ethiopian-ness) – a term invoking national unity rather than decentralisation. At the October EPRDF congress, he made the somewhat ambiguous statement that “a federal form of government is a preferred option in Ethiopia as long as we don’t confuse regional arrangements with ethnic identity”.

In general he has avoided commenting on constitutional issues relating to the structure of Ethiopia’s government.

Among other groups, too, ethnic nationalism – in part a result of ethnic federalism – is intensifying.

The ambiguity in Abiy’s position may have helped him preserve some useful political flexibility but it comes at a cost. It has created a vacuum, which regional politicians, especially those who may fear Oromo domination, are likely to exploit by jointly pushing for greater devolution and potentially even secession. Indeed, on 28 July, the former powerful deputy prime minister and current TPLF chairman and Tigray regional state president, Debretsion Gebremichael, declared that “we either live together respecting each other or we will fall apart”, implying that some Tigrayans advocate the state’s secession.

Since Abiy’s ascension to power, the TPLF has been concentrating on building consensus in Tigray, preparing its constituents for a scenario in which the region pushes for at least greater autonomy.

Among other groups, too, ethnic nationalism – in part a result of ethnic federalism – is intensifying. Within the Oromo, forces outside the ruling party, notably the OLF and the Qeerroos, as well as other, less visible, groups seem increasingly emboldened and have begun to question Abiy’s commitment to their objectives – either Oromo dominance in the current dispensation or a forcible takeover of power.

In Amhara region, the National Movement of the Amhara challenge the ruling party and demand the annexation of land from Tigray, Oromia and Benishangul-Gumuz that they believe historically belong to the Amhara.

3. Five steps to prevent and mitigate conflict

Abiy and his team can take a number of steps to check what has become a particularly combustible mix of ethnic tension, flaring violence and political upheaval.

First, Abiy should adopt a more consensual and sustainable style of rule that emphasises working with state institutions to develop reforms. It will be important to allay concerns – well-founded or not – that the transition is a top-down affair in which formerly dominant Tigrayans have been replaced by Oromos. Thus far, however, Abiy’s rhetoric has been more inclusive than his management style. Notwithstanding the welcome recent appointment of a diverse new slate of cabinet ministers, the Prime Minister’s Office apparently has made all decisions of import with little consultation, and critics claim that his kitchen cabinet of close advisers is made up mostly of Oromo and evangelical Protestants.

The power of the Prime Minister’s Office – a Meles-era legacy – only reinforces the unhelpful perception of government by fiat – although the prime minister’s defenders will contend that he is hamstrung by opposition to his reforms among the senior cadre of the EPRDF whom he would ordinarily be expected to consult.

Rather than continue in this fashion and risk further political polarisation contributing to communal and political tensions, Abiy should focus on working with institutions and offices across the government to develop new reforms. Not only would changing tack help Abiy project a more legitimate and inclusive style of governance, it could also help re-energise ministries and a civil service that have been deprived of leadership during the transition and are largely adrift.

Secondly, Abiy ought to work with regional political and communal leaders to promote dialogue aimed at addressing grievances, fairly settling disputes and quelling communal violence. The parliament’s approval, on 25 December 2018, of a National Reconciliation Commission could be a first step, though its broad mandate would need to be clarified.

Though the measure passed by a large margin, some deputies voiced concerns over the nature of the commission’s work, the question of whether reconciliation should prevail over justice, and the fact that the commission will be accountable directly to the prime minister. Relatedly, Abiy must find a way to address the sense of alienation, anger and humiliation among supporters of the once-dominant TPLF in whose home region, perhaps uniquely across Ethiopia, opposition to his rule (fed by perceptions that Tigrayans have been singled out for purges by authorities and displacement by members of other ethnic groups) seems deeply and widely felt.

Thirdly, Abiy and Ethiopia’s security forces should approach the disarmament of the growing number of non-state armed groups, most of which are ethnic militias, with caution. Among these groups are a major faction of the recently returned OLF that has refused to disarm and wants to integrate into the regional security forces instead.

Demobilising such groups is a security priority; yet doing so without provoking further fighting or nationalist sentiment is equally important. Peace talks brokered by elders seemed to yield a breakthrough in the third week of January 2019, when the Oromia state government and OLF leaders agreed to a ceasefire. But fighting continued.

Authorities should allow elders and civil society to take the lead in searching for a resolution to communal violence, including in Oromia regional state which has seen some of the worst fighting. Underlying the tensions between the OLF and Abiy’s party on the question of demobilisation, for example, is the fact that both aspire to win leadership in Oromia in the next election and thus view each other as political rivals. This suggests that informal groups, such as the Abba Gada (a traditional system of local elders among the Oromo) and others such as the Inter-Religious Council (a civil society group), neither of which is a direct player in the election, might be better placed than the government to help bridge differences between Oromia state authorities and various OLF factions.

The German government and other donors have offered support for the demobilisation of the OLF’s armed wing and other militias around the country.

Such financial support, which should be provided as swiftly as possible after local actors achieve a settlement, could prove crucial in addressing a problem that is driving much of the ethnic violence by offering those who give up their arms assistance in reintegrating into civilian life (eg, with job training and other transitional support).

Fourthly, Abiy should continue working to remove officials like Iley who are allegedly responsible for serious abuses, particularly those related to violent suppression of dissent, or who fail to hold security forces to account for abuses. At the same time, the government should avoid any appearance that it is focusing only on strongmen of certain ethnic backgrounds. Ensuring that those held to account are afforded due process is also important for the fairness and legitimacy of these actions.

The government should consider establishing mechanisms that allow different political constituencies to weigh in on key questions relating to the decentralisation of power within the ruling party and in the wider political arena.

Finally, striking the right balance on ethnic federalism is vital, particularly given the implications for communal tensions. Abiy should move quickly to try to build consensus around a vision of federalism that can help knit the country together in the face of tensions that are pulling the regions apart. He should do so in an inclusive way ensuring that there is institutional buy-in to the process. The government should consider establishing mechanisms that allow different political constituencies to weigh in on key questions relating to the decentralisation of power within the ruling party and in the wider political arena. Elders, through the traditional Ethiopian system of mediation and dispute resolution known as shimgilina, and organisations such as the Inter-Religious Council can play a useful role in pursuing consensus on this highly sensitive issue. While there is no perfect formula, it is critical that Abiy arrives at a line with cross-ethnic support; whatever degree of centralisation or decentralisation the country agrees upon, federal institutions and regional administrations also must respect and protect minority rights.

B. A Clear Roadmap for Elections

Abiy faces another daunting challenge in managing preparations for national polls scheduled for 2020. He has taken a number of bold steps toward a more democratic future already. These include breaking ranks with EPRDF cadres in announcing that multiparty democracy and genuinely competitive elections are Ethiopia’s future, signalling his intent to end 27 years of de facto single-party rule by the EPRDF.

Pardoning exiled (and some of them armed) opposition movements such as the OLF and Ginbot 7, and inviting them to return home and engage in peaceful contestation for power, was another seismic move.

The challenge now for the government is to take this process forward and make good on its commitments by seeking to stage elections in 2020 where these parties can compete on a level playing field and citizens are able to participate.

The hurdles that need to be overcome in order to do so are mounting, however, and it is not clear that the government will be able to meet this goal on time. Rising violence could present logistical challenges and undermine participation in both the national elections that are a year and half away and, in the interim, local polls that are slated for 2019.

At the very least, it will greatly complicate the efforts of opposition parties that have been banned for years, and that even under the best of circumstances would be struggling to attract and mobilise supporters to participate in the polls.

Adding a further layer of complexity, Ethiopia’s electoral law and institutions are in flux. The EPRDF biennial general congress that finally took place in Hawassa in October 2018 (after postponements in 2017 and again in August 2018) avoided the question of electoral reform which optimally would level the playing field to ensure free and fair elections and establish an electoral board free from influence by the EPRDF in light of previously contested elections, for example, the 2005 disputed polls.

But the EPRDF and opposition factions recently began discussions on how to amend the electoral law and the electoral board. The appointment of a new head of the National Election Board of Ethiopia, former opposition leader Birtukan Mideksa, is one positive step.

In order to make it an effective and representative instrument of reform, the government should reconstitute the remainder of the board (with multi-party representation) and work with donors to ensure it has sufficient resources and access to technical assistance.

It will also be critical to craft a credible means of challenging results in the event that parties or candidates dispute electoral outcomes. Abiy should reach out to the opposition to seek consensus on a dispute resolution mechanism in which all major parties have confidence. This step could reduce parties’ temptation to take up arms in the event of electoral defeat. The UN Development Programme, which is coordinating donor backing for the electoral process, should offer technical support for this mechanism, drawing on its experiences in other countries on the continent.

Abiy’s supporters among the Oromo – who are the core of his political base – hold different views on whether elections can be held as scheduled. Some youth leaders fear that delays will trigger more instability and have encouraged him to start negotiations with opposition leaders with the idea of resolving differences and presenting a united front on the steps that must be taken in order to stage credible, timely elections.

Others within Abiy’s inner circle favour a limited delay to allow for far-reaching electoral reforms. Worryingly, some, such as OLF leaders, indicate that they will accept nothing short of gaining power in local elections.

But the bottom line remains security, and many within the security sector and the EPRDF contend that elections should not be held if today’s insecurity persists.

According to one senior official: “Under current circumstances, holding elections could easily escalate into violence and tear the country apart. There are too many militias holding guns and having a political stake, in Oromia and beyond”. People in Abiy’s circle offer a counter-argument, namely that postponing the vote would prolong the period of uncertainty that some see as feeding instability.

Whichever side prevails in this debate, a number of steps are necessary to prevent the election turning into a flashpoint for violence.

First, in order to create the best odds that the election can be held on time, the government will need to fast-track discussions on how to amend the electoral law and reform the electoral board, and then develop a roadmap, with agreed benchmarks, on how to organise elections and ensure that other political parties can fairly and credibly compete in forthcoming polls.

Secondly, while it is too early to decide whether a timely election is possible, Abiy should be prepared for the possibility that events will require a delay and take steps to build widespread political support. Any delay should come only after consultations, within the EPRDF and across the country’s political spectrum, as to whether a postponement is necessary.

Unless security conditions improve dramatically, he should initiate such discussions soon.

Thirdly, whenever the vote goes ahead, it is essential that the security forces be encouraged to act with strict neutrality, particularly in the run-up to and aftermath of the election. Neutrality would be a break with the past and signal willingness by authorities to level the playing field for all sides.

Fourthly, credible elections have never been held in Ethiopia. As such, the government should welcome a diverse array of observers, both from Africa and beyond, to follow the process and build confidence among parties. The media should be allowed to operate freely to give all parties a fair chance to present their agenda to the public. Donors and civil society groups should help the media develop a self-regulating mechanism for filtering out hate speech, which might spike as the election nears. Political parties, both those formerly in exile and those that remained in country, require capacity building to enable them to participate fully.

C. Reforming the Foundering Economy

Ethiopia’s foundering economy is the third acute challenge that Abiy will need to prioritise. Abiy inherited an economy that was already in a perilous state.

The country’s economic growth over the last decade was fuelled by massive borrowing that has created a debt burden of more than $24 billion, which Addis struggles to service. Moreover, in recent years, prices have sky-rocketed even as unemployment has increased. Compounding the problem are the public’s rising expectations, notably in the urban population that is more aware of the economy’s weaknesses. Disappointment and frustration are especially acute among job-seeking youths joining the country’s expanding labour pool only to find that there are few meaningful prospects.
Abiy will need to develop a politically viable strategy for generating more investment.

Seeking more generous terms from creditors, and additional support from donors, will have to be part of the solution, and Abiy has already begun to do this. In September 2018, Abiy negotiated with China to extend the schedule of debt repayments relating to the Addis Ababa-Djibouti railway project.

The previous month, the World Bank also reportedly promised $1 billion in budget support. The UAE have provided cash infusions of $1 billion and promised a further $2 billion in investment funding, and Saudi Arabia a year’s worth of fuel with a delayed payment of twelve months. Western partners have also offered support but have been slow to follow through. They should pick up the pace, because time is of the essence. By all accounts, Ethiopia is critically short of funds.

To empower Abiy to assuage the concerns of millions of unemployed youth, some of whom have been lured into ethnic militias, international partners should offer a substantial cash injection into the Ethiopian economy on an accelerated timetable.

Yet debt rescheduling, budget support and short-term cash relief from Saudi Arabia, the UAE and others are not long-term solutions for shoring up Ethiopia’s economy. Abiy must also face the structural challenges that undermine Ethiopia’s economic prospects.

Abiy will need to develop a politically viable strategy for generating more investment. One partial strategy, which he floated early in his tenure but has since partly walked back, would be to generate investment through partial privatisation – ie, the sale of minority stakes in certain state-owned enterprises.

  • But while there is an economic logic to this strategy, which both the World Bank and International Monetary Fund have endorsed, any move in the direction of partial privatisation will face both practical and political hurdles. As a practical matter, preparing for the sale of shares on an international stock exchange will take extensive preparatory work – up to two years’ worth – in order to meet legal and regulatory requirements.

And politically, it is not clear that Abiy has developed sufficient internal support from constituencies that support the highly centralised current system, including those who have benefited from state-controlled development projects and old-guard EPRDF leaders who were schooled in Marxism-Leninism during the rebellion and remain wary of private investment. This wariness has permeated the general population.

The Abiy administration has opted for a phased approach to the process of opening up the economy. Following substantial blowback to an earlier announcement that key assets, including Ethiopian Airlines – Africa’s most successful air carrier, which is considered a national treasure in Ethiopia – would be partly privatised, the government announced that it would instead start the privatisation process by selling off a stake in national telecoms monopoly Ethio-Telecom.

The firm is widely unpopular in Ethiopia due to what is perceived as generally poor service and the administration’s calculation might be that privatising it will attract low opposition.

The Finance Ministry said in the first week of February 2019 that the telecoms privatisation drive would offer lessons for how to take the privatisation process forward.

Few challenges will test Abiy in the medium term more than the question of whether his administration can address mass youth unemployment and under-employment, a key grievance. To do so, his administration will need to focus on easing the heavy regulation of the Ethiopian economy, which hinders competition and innovation. The country is ranked 159th out of 190 countries in the World Bank’s 2019 Ease of Doing Business index.

Excessive regulation inevitably discourages private-sector participation in the economy, which, in turn, depresses job creation. The government ought to carry out reforms, including of the banking sector (to offer more efficient funding to the private sector), and to improve access to foreign currency.

As it moves forward, the government should learn from the experiences of other African countries. First, the government will need to breathe new life into the small and medium-sized enterprise sector, which has long been neglected as authorities focused on industries that are large in scale but still employ too few workers. A good start would be to cut back regulations on small-scale domestic enterprises and reform the byzantine local taxation system. Secondly, the government might focus on other sectors that could offer a path to employment for thousands of youth, including financial and other services. Thirdly, deregulating the mobile phone sector might spur the type of job-creating innovation witnessed in countries like Ghana, Kenya and Nigeria. All this will require substantial support from external actors. The World Bank, the International Monetary Fund, the EU and other actors invested in Ethiopia’s success should prioritise offering needed financial and technical support on an accelerated timescale. Progress here could address causes of violence and instability.

Ultimately, however, the Ethiopian government will be unable to put the country’s economy on the right path without cutting spending. It cannot afford to maintain its current level of debt and fund its current, albeit low, level of services to the public, and it cannot rely on donors and creditors to keep it afloat indefinitely. But cutting government spending will drive down already low wages and further erode minimal public services, creating the potential for a violent public backlash.

The government should therefore work with donors to limit the pain to Ethiopia’s population.

Ethiopia’s international partners should support those efforts, providing technical assistance and working with the government to seek ways to reform the economy and ease the social cost of structural readjustment as much as possible. Ethiopia might, with the support of donors, delay spending cuts on social services while implementing regulatory reform that will improve the ease of doing business and attract foreign direct investment. For this to work, donors and creditors may want to convene a conference to discuss the best way forward for coordinating their support for Ethiopia’s economic reforms.

V. Conclusion

Prime Minister Abiy Ahmed has taken on the arduous task of putting in place a wholesale reform process. He asks the population to be patient, promising a bright future after root-and-branch reform, and tempers his optimism with disarming candour about the sheer scale of Ethiopia’s problems. By presenting himself this way to the public, Abiy has managed to wrong-foot his critics. His approach to politics and ability to communicate directly with citizens is certainly new and welcome.

Urgent is that he infuse new energy into the state bureaucracy, reach out across the political spectrum to decide on electoral reforms and the nature of federalism.

But even as the prime minister has raised enormous expectations among the population, he has incurred the rancour of many among the old guard as well as ethno-nationalists, including Oromo, who supported his rise to power but are displeased by his calls for Ethiopian-ness and unity. He will need to step carefully in the months ahead, moving from proclamations to detailed policies and laying out a clear set of priorities. Of these, the most important should be restoring security and calming communal violence. Demonstrating that the new government he is leading will work for all and that security forces can protect Ethiopian citizens, regardless of ethnic background, will be critical to this effort. Urgent, too, is that he infuse new energy into the state bureaucracy, reach out across the political spectrum to decide on electoral reforms and the nature of federalism. He needs to prepare the ground for holding – or, if necessary, delaying – fast-approaching 2020 elections and start taking the difficult steps necessary to modernise the economy.

Much is at stake. A successful transition in Ethiopia – putting the country on a path to political openness, inclusion and economic liberalisation – could help transform the Horn of Africa, setting a positive precedent for other transitions that are occurring in the region. So far, international partners have sent encouraging signals to Abiy. They should continue to do so and, wherever possible, support his administration’s reform efforts, crucial for calming tensions, stabilising the country and helping Ethiopia through this time of transition toward a brighter future that this moment of opportunity has placed within reach.

Nairobi/Brussels, 21 February 2019

Appendix A: Map of Ethiopia


Appendix B: List of Acronyms

Amhara National Democratic Movement (now the Amhara Democratic Party, ADP)

Ethiopian People’s Revolutionary Democratic Front

Grand Ethiopian Renaissance Dam

Oromo Liberation Front

Oromo People’s Democratic Organization (now the Oromo Democratic Party, OPD)

Southern Ethiopian People’s Democratic Movement

Tigray People’s Liberation Front

Ethiopian People’s Revolutionary Democratic Front

Grand Ethiopian Renaissance Dam

Oromo Liberation Front

Oromo People’s Democratic Organization (now the Oromo Democratic Party, OPD)

Southern Ethiopian People’s Democratic Movement

Tigray People’s Liberation Front