The 42-year-old Abiy Ahmed, who took office in April, has quickly moved to overhaul the administration and has an ambitious economic reform agenda
Date: Monday, 25 June 2018
The 42-year-old Abiy Ahmed, who took office in April, has quickly moved to overhaul the administration and has an ambitious economic reform agenda
June 25, 2018
Supporters of Ethiopia Prime Minister Abiy Ahmed attend a rally on Meskel Square in Addis Ababa. Mr Ahmed believes that by developing the country's natural resources, Ethiopia will be a middle-income economy by 2025. Yonas Tadesse/AFP
Barely two months in office, and the new prime minister of Ethiopia is turning the country's politics and economy upside down.
The 42-year-old Abiy Ahmed took office in April, and quickly moved to shake up an administration that had gone a bit slack. A restive population, low job creation and crippling debt pointed to a desperate need for fresh ideas for the ruling coalition Ethiopian People's Revolutionary Democratic Front (EPRDF).
Mr Ahmed it seems, is determined to come up with few of them.
"The crux of the matter is to catapult our country to a higher level of development and move forward, while ensuring that its unity is secured on a sustainable basis," he said in his inaugural parliamentary speech.
The longstanding state of emergency that restricted personal freedoms was lifted; the state of war with neighbouring Eritrea is also about to end following diplomatic overtures from Addis Ababa.
"What is happening in Ethiopia right now could be one of the most significant shifts in government policy that this region has seen for decades," says Christopher Hockey, Head of Information at WS Insight, a Mauritius-based firm that focuses on security in Africa.
On June 5 Ethiopia said it will fully accept the terms of a peace agreement with Eritrea, a major step towards calming tensions with its decades-long rival. Addis Ababa is also trying to extend its economic influence by approaching Somalia to develop up to four ports along the Somalian coast.
Mr Ahmed has also pledged to settle a simmering dispute with Egypt over the Nile's waters, which could be affected by the Grand Renaissance Dam, Ethiopia’s US$4 billion hydroelectric project.
"Politically, Ethiopia is seeking to become a regional powerhouse and cannot do so whilst still at loggerheads with its neighbours," Mr Hockey said. "Beyond this, Mr Ahmed deserves substantial credit for bringing Ethiopia back from the brink of autocracy."
The government also wants to reform an economy heavily dependent on agriculture and struggling with ongoing shortage of foreign currency. It has enjoyed one of the world's fastest growth rates, with gross domestic product expanding at more than 10 per cent a year for the past decade. Yet there is the ever-present risk that a single disruption such as drought could destroy growth, particularly in its all-important farming sector, which counts for up to 45 per cent of GDP, according to the World Bank.
The outbreak of violence earlier this week is also a worrying sign for Africa's fastest-growing, largely agrarian economy. At least two people were killed in an explosion at a rally for Mr Ahmed, who escaped unharmed. Media reports citing an organiser of the event in the Ethiopian capital said a member of the crowd had tried to hurl a grenade at the stage.
"We are the fastest growing economy in Africa, but we can not hope to keep this up if we only depend on agriculture," said Motuma Mekassa, formerly mining minister who has now take control of the key portfolio of defence. Speaking to The National on the side-lines of a mining symposium in Cape Town earlier this year, Mr Mekassa said the country had begun setting itself up to become a modern, diverse economy.
Already there are signs that the current level of growth can not be sustained. According to a World Bank assessment in June, Ethiopia’s GDP growth rate will decrease by 1.3 per cent in the current fiscal year.
In the decade prior to Mr Ahmed becoming prime minister, Ethiopia had begun building power stations, laying railway infrastructure and even investing in ports in neighbouring countries.
Ethiopia also wants to end its unusual status as one of the few African countries not to have a significant mining sector.
Mr Mekassa says initial exploration had shown gold, diamonds and industrial minerals could form the basis of a mining industry, which now only accounts for 1 per cent of the country's GDP.
