Eastern Africa Association
Eastern Africa Association
The Eastern Africa Association is a source of insightful and helpful publications, guides, and advice for all visitors to our website. Contributors include EAA analysts, our Members, and a wide range of experts and official commentators. As a key service for Members only, we produce a regular Newsletter which contains our analysis of developments in the region.
You can search for material using the filters below, or access the latest publications in the library further down the page.
Just as Ethiopia was righting itself after the Tigray conflict, a new outbreak of violence between the Federal Government and local militias in Amhara threatens to derail the restoration of peace and prosperity in the country. While international bodies and investors are concerned, the Government seeks to restore control through a State of Emergency. The renewed conflict is a reminder of the broader constitutional complexities in Ethiopia which still need to be resolved. Nonetheless, the economy continues to grow, and IMF/WB talks with the Government are progressing well.
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The Eastern African Association (EAA), in collaboration with the Ethiopia Embassy, London and Ethiopia Investment Commission (EIC), organised a hybrid business roundtable to brief UK investors on Ethiopia’s Economic and Political Reforms. This report provides an overview of the event’s discussion on the significant reforms implemented by the Ethiopian federal government to attract international investment and strengthen its economic and political systems.
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With improving international relations, particularly with key Western partner the United States, and an economic peace dividend from the end of the Tigray conflict emerging, Ethiopia’s prospects are improving. The Government is forging ahead with economic reform programmes, and actively seeking foreign investment.
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Progress continues to be made on implementing the Tigray Peace Agreement, drawing a line under the bloody two-year-old conflict, though the lingering presence of Eritrean troops poses a potential threat to its success. The Government seems intent on reaping a peace dividend as it presses ahead with its reform programme, focusing on liberalising the banking, telecoms and logistics sectors.
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2023 is looking to be a considerably brighter year for Ethiopia as the peace in Tigray appears to be holding and both sides implement terms of the Peace Accord. While rebuilding costs are very considerable, and instability continues to plague parts of the country, the Government appears intent on restoring an attractive environment for international investors and is driving a number of initiatives to increase FDI.
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Ethiopia’s prospects have brightened considerably since the ceasefire in the Tigray war and the apparently successful peace accords. While there will still be obstacles to a lasting peace and constitutional settlement, most observers agree that the war is now over. Economic activity is picking up and the Government is pursuing a variety of valuable economic reform measures.
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The peace deal between Ethiopia’s Federal Government and the Tigray region’s rebel leadership appears to be sticking, with concrete measures taken to implement its conditions, including the disarmament of rebel forces and resumption of supplies of goods and services to Tigray. Unresolved points remain the continued presence of Eritrean troops and uncertainty about the long-term constitutional arrangements for Ethiopia. However, the improved environment means investor sentiment is lifting and conditions for a rise in FDI are emerging.
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The signing of a Peace Agreement between the rebel Tigrayan leadership and the Federal Government, after a two-year civil war, if upheld, will provide significant respite to a battered population, and open up investor appetite in the country again. Obstacles remain, including the status of Eritrean forces and Amharan militias, but it appears the will is there to address these.
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There are tentative hopes that a renewed peace push may dampen the Tigray conflict and pave the way to a peaceful resolution; however, given the volatility displayed on both sides and the yawning gap in their demands, this is still far from assured. While the conflict rages in the North, large parts of the country remain open for business and some encouraging reforms in the financial and telecoms sector begin to bear fruit.
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