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.
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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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The prospects for a negotiated settlement of the Tigrayan conflict are looking more hopeful, with the outline of a process in place. There are still mountains to climb as the differences between the two sides remain significant. Other ethnic conflicts continue to batter other parts of the country. That the Tigray war may be drawing to a close has buoyed economic sentiment, though the war and global economic pressures continue to weigh on the economy.
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The ceasefire in Tigray largely continues to hold, and aid flows have begun to arrive in greater quantities in the region. However, separatist and nationalist movements continue to arise in other parts of the country leading to continued security uncertainty and concerns over civil liberties in the country as a whole. Meanwhile, costs to the economy from the war at home and in Ukraine continue to rise.
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The Conflict in Tigray continues to dampen with the announcement of a truce and ceasefire by the sides. The peace process is still not defined but rhetoric from both sides indicates a desire to find a solution.
Read MoreKihara Maina, CEO, I & M Bank Kenya gave a presentation on Investment in East Africa: the risks and opportunities in the region as seen through the eyes of an investor, at the EAA’s global meeting on 28th July 2021. To view his presentation click on the link below: Risks and opportunities in East Africa:
Read MoreThe future of the Tigray conflict is entirely dependent on concessions being made by both sides to allow talks to open up.
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