Ethiopia Held Hostage by War and Corruption
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Isael Ze Etiel
According to the Heritage Foundation 2024 Index of Economic Freedom Country Profile, Ethiopia’s economic freedom score is 47.9, making its economy the 156th freest in the 2024 Index of Economic Freedom. Its rating has decreased by 0.4 point from last year, and Ethiopia is ranked 37th out of 47 countries in the Sub-Saharan Africa region. The country’s economic freedom score is lower than the world and regional averages. Ethiopia’s economy is considered “repressed” according to the 2024 Index. Progress toward greater economic freedom has been very uneven, and Ethiopia underperforms in many critical policy areas. The absence of an independent and fair judiciary weakens the rule of law and undermines prospects for long-term economic development. The weak and uncertain regulatory framework impedes expansion and diversification of the productive base. The formal labor market is underdeveloped. Employment regulations remain outmoded, but enforcement is not stringent. The most recent available inflation rate is almost 40 percent.
Currently, Ethiopia’s economic landscape is grim, characterized by a lack of job opportunities for youths and a pervasive culture of corruption that is systematically eroding the country’s stability. The Abiy Ahmed regime, despite its promises of economic growth and prosperity, has steered the nation towards a precarious future, fueled by a relentless cycle of war, conflict, and a crippling lack of investment.
The once-promising Ethiopian economy is now teetering on the brink of collapse. The government’s primary focus seems to be on building luxury projects, rather than investing in labor-intensive initiatives that could create jobs for the vast number of unemployed youth. Per the Job Creation Commission, Plan of Action for Job Creation (2020–2025) which was planned in 2020 estimated that more than 2 million youth are entering the labour market in Ethiopia every year, yet the economy is unable to meet the demand. The creation of 14 million jobs between 2020 and 2025 is needed to absorb the current backlog of unemployed and new entrants to the labour market. The country is experiencing significant demographic pressure as every year more than 2 million youth enter the labor market, leading to a projected rise in the labor force of more than 30% between 2019 and 2030. More than 17 million people in total will enter the labor market during this period, and ensuring they have access to quality jobs is crucial to the economic growth and development of the country. The on-going conflict in Amhara, Oromia, as well as the widespread presence of militia groups, has decimated businesses, forcing many to close or relocate.
Foreign direct investment (FDI) has plummeted due to the ongoing conflict, prompting both domestic and foreign investors to seek opportunities elsewhere. The lack of a clear economic policy and direction, coupled with a pervasive culture of corruption, has further alienated potential investors.
Similarly, corruption has become an existential threat to Ethiopia’s economy, siphoning resources from vital sectors and creating an environment where cronyism, the appointment of friends and associates to positions of authority without proper regard to their qualifications, predominates. Most of Abiy’s officials are called “Tilla Gym” members, those who work out in the gym with these officials gain government power. The ruling elite, engaging in grand corruption, has enriched themselves at the expense of the nation, weakening institutions and undermining the rule of law. The flow of illicit funds out of the country, particularly to Dubai (you can check apartment advertisements on local TV and social media equal to those houses built in Addis Ababa) and other international destinations, makes it increasingly difficult to track corrupt officials and hold them accountable.
The plummeting foreign currency reserves have forced the government to adopt barter trading, a system reminiscent of a pre-modern economy. This desperate measure is a stark indication of the state of Ethiopia’s economic crisis. For instance, most Chinese companies use these techniques because they do not receive enough foreign currency to import inputs for their factories in Ethiopia. With limited job opportunities, many young Ethiopians are forced to make a difficult choice: join the national defense force and engage in a protracted war, or join rebel groups, further escalating the conflict. This desperate situation highlights the systemic failure of the government to provide a viable path for the youth to achieve their aspirations.
The breakdown of law and order has created a fertile ground for criminal activities, particularly kidnapping. The lack of effective security forces and a widespread culture of impunity have emboldened criminal elements. The government’s own shadow kidnapping group, “Koree Nageenyaa” (Koree Nageenyaa is a security Committee in the Oromo language – which began operating in the months after Prime Minister Abiy Ahmed came to power in 2018) further contributes to an environment of fear and insecurity, discouraging domestic and foreign investment.
Ethiopia’s future appears bleak, burdened by a confluence of crises – war, conflict, corruption, and a collapsing economy. Unless there is a fundamental shift in the government’s approach, the country faces a trajectory towards a failed state. The absence of a viable economic strategy, coupled with rampant corruption and a relentless focus on maintaining power, threatens to undermine the fabric of Ethiopian society and extinguish the hopes of a generation. The Ethiopian people deserve a government that prioritizes their well-being, not a regime that perpetuates a cycle of instability and despair.
In conclusion, Ethiopia stands at a crossroads, its future teetering on the brink of a precipice. While the nation boasts a rich history and a resilient people, the current trajectory is unsustainable. The government’s failure to address the root causes of Ethiopia’s economic woes, coupled with a relentless focus on maintaining power through coercion and repression, threatens to unravel the very fabric of the nation. A genuine path towards peace, prosperity, and stability requires a radical shift in the government’s priorities. The current focus on luxury projects and military expansion must be replaced by a commitment to investing in human capital, creating opportunities for all Ethiopians, and ensuring a fair and equitable distribution of resources. Corruption must be tackled head-on, with a clear commitment to accountability and transparency. The international community must also play a role, holding the government accountable for its actions and supporting the Ethiopian people’s aspirations for a just and democratic future. Without a fundamental change in course, Ethiopia risks a future marked by economic collapse, widespread social unrest, and the fracturing of a nation. The time for empty promises is over; the people of Ethiopia demand a government that truly serves their interests, not one that uses them as pawns in a power game.
Editor’s note : Views in the article do not necessarily reflect the views of ethiopiantribune.com
