Feature: Ethiopia’s economic remedies for political malaise

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In late March the Oromo Cultural Center at the heart of Ethiopia’s capital Addis Ababa hosted the official launching of Odda Transport, a public-private partnership firm which went on to sell 154,000 shares amounting to more than $26 million within a matter of hours. Odda is just one of the six new companies that will enter the market in the coming six months with the aim of boosting the economic vitality of the country’s largest regional state, Oromiya, which was plagued by unrest in 2015-2016 as anti-government protesters took to the streets with complaints of marginalization and repression.

Delighted by the initial success, the state’s transport office chief Takele Uma declared: “If you are genuinely concerned about the people, the people will show you that they are with you.”

On the pipeline are two marble factories, two food processing plants and a beverage and soft drinks industry which are all parts of an economic plan, dubbed grandiosely ‘Oromiya economic revolution,’ unveiled by the regional government. State spokesman Addisu Arega says the plan will promote economic justice for the Oromo by encouraging domestic investment that will create jobs for the youth and farmers.

The ‘economic revolution’ is also to be replicated in the second largest state, Amhara, where the regional government is partnering with hundreds of investors to establish a conglomerate that will construct cement, steel, and fertilizer factories as well textile plants. Three factories proposed in the first phase have a combined projected investment outlay of more than $400 million. The regional government pledged to cover a quarter of the total capital for the projects while the rest is expected to be collected from the private sector and state-owned businesses.

Amhara is another state in which popular protests last year challenged the ruling party, the Ethiopian People’s Revolutionary Democratic Front (EPRDF), forcing the declaration of a state of emergency in October for the first time since the party assumed power twenty five years ago.

While the EPRDF’s state-led developmental policies were applauded for bringing a decade of economic progress, protests by the Oromo and the Amhara ethnic groups, together making up more than two-thirds of the country’s 100 million population, highlighted questions of inclusiveness. The protesters’ claims of economic sidelining appear to be acknowledged by the government with its new moves to address economic questions.

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Lemma Megeresa, president of the Oromiya region, is considered the architect of the “the economic revolution.”

The ‘economic revolution’ was introduced following the announcement of a $430 million revolving youth fund said to be for tackling issues of youth unemployment and underemployment by providing capital for job creating schemes. Ethiopia has one of the highest rates of youth unemployment in East Africa with 17.5% of those eligible to work lacking jobs. The youth bulge is understood to have contributed to fueling the unrest. However, the success of these economic initiatives remains uncertain as they are not necessarily backed by political reforms promised at the pinnacle of the protests by senior government officials.

Political Dialogue

Addressing the one-party controlled parliament in October 2016, the country’s president Mulatu Teshome pledged political reforms including dialogue with the opposition. However, the proposed roundtable of political parties failed to make progress as the two leading opposition groups, the Ethiopian Federal Democratic Unity Forum and the Blue Party, walked out in April citing procedural disagreements.

According to Tilahun Endeshaw, a member of the Forum’s executive committee, there is no point in taking part in the talks while senior members of the party are still in jail. Bekele Gerba, a senior member of the Forum’s leadership is jailed under the country’s anti-terrorism law while another senior leader Merara Gudina was arrested in December for allegedly breaching the emergency decree.

The ruling party wants to conduct roundtable talks with 21 opposition parties, but the Forum feels as a leading political party that it needs to have a one-to-one dialogue with the EPRDF. “We do not see any reason to have talks with [20] opposition parties; we want a dialogue” with the incumbent party, said Tilahun.

A political science scholar at the Addis Ababa University who wishes to remain anonymous argues that the EPRDF does not appear to be sincere in its promises of political reforms. “If they’re genuine in their intention to bring forth reforms, they ought to show gestures underscoring that intention. Releasing political prisoners can be one way to do that,” he says.

The extension of the state of emergency in March suggests the government’s realization that despite an appearance of calm things haven’t truly returned back to normal, according to the scholar. “I hope they do understand that economic initiatives alone cannot solve the problems,” he adds. For him the problems that led to Ethiopia’s worst political crisis in decades are largely political. “[The protesters] were demanding justice and equality; not just economic but political as well.”

Getachew Teklemariam, a former government planner who now works as a private consultant has another concern: the feasibility of the economic plans themselves.

The Flip Side of the ‘Revolution’

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Ethiopia’s Oromiya region is the country’s largest and it surrounds the capital Addis Ababa.

While the Oromiya and Amhara regional governments argue that studies have been done on the viability of the ‘economic revolutions,’ Getachew expresses his skepticism on the depth and extent of the studies. “Conducting feasibility studies for billion-dollar businesses takes at least a year. I don’t think that happened in this case,” he says.

To make his point Getachew points to the fact that the sectors selected in the plans were not the ones the regions had been lobbying for investment to come in. Additionally, the current plans are not entirely in line with the country’s five year grand economic plan, the Growth and Transformation Plan II (GTP II) unveiled in 2015. Besides the job creation targets laid out by the GTP II “other targets such as investment flow, private sector engagement and regional wealth creation could be negatively impacted,” he argues, even if the move might “bring some idle resources on board an economic vehicle.”

Meanwhile, one of the measures recently undertaken by the Oromiya regional government was to distribute land to the unemployed, a move that was found to be worrisome by some private investors. In mid-March cement producers in the region including Dangote were asked to hand control of some parts of their businesses to groups of unemployed youths. While some commentators argue measures like this could impact the country’s foreign investment landscape, regional officials reject that notion, claiming they just want to include the local youth in the value chain.

But for the scholar at the Addis Ababa University these are temporary populist measures aimed at appeasing angry youths. “An absence of political openness means a deficit in transparency and accountability without which no economic plan can hit its target,” he says.


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