Ethiopian Prime Minister Abiy Ahmed
Since Ethiopian Prime Minister Abiy Ahmed declared victory over the Tigray People’s Liberation Front (TPLF) in late November, Tigray’s airspace has opened and businesses are gradually picking up again, despite ongoing tensions and a vow by the TPLF to continue fighting.
Abiy even visited the embattled city of Mekelle on December 13, his first trip to the Tigray region since hostilities broke out there on November 4.
During his visit, Abiy, clad in military camouflage and a green beret, promised that work was underway to restore phone and internet connectivity to the northern region after services were cut. But Tigray’s internet blackout persists, while phone calls are possible in only about a dozen of the region’s towns.
It’s not a novel occurrence. In 2019, there were eight internet shutdowns across Ethiopia.
Swathes of the country’s Oromia region were without phone and internet services during the first few months of 2020, as the Ethiopian army battled Oromo Liberation Army (OLA) fighters based in the area.
In late June of last year, mob violence following the murder of superstar musician Hachalu Hundessa led to hundreds of deaths and a nationwide internet shutdown that lasted 23 days and is estimated to have cost Ethiopia’s economy at least $100m.
Flatlining the internet is simple for authorities. Ethiopia’s state-run telecommunications firm Ethio Telecom is the sole telecoms provider for the country.
In 2018, when Abiy took office, the government announced it would open the state-run monopoly to private foreign investors – one of several high-profile privatisation plans announced that year.
The allure for foreign investors was undeniable. Ethiopia’s economy is among the most closed in Africa and it boasts the second-biggest population on the continent, with 110 million people.
But the enthusiasm that first greeted the announcement is likely to have been tempered by the government’s habit of shutting off internet and phone services whenever instability rears its head.
A frontier market superstar
Despite a history blighted by recurring wars and famine, Ethiopia had started turning a page over the past decade. A frontier market superstar, it achieved an average of just shy of 10 percent growth a year from 2008-09 to 2018-19, according to the World Bank.
Most of that growth was fuelled by construction and services. An infrastructure boom saw condominium housing projects, industrial parks, skyscrapers and Addis Ababa’s light rail system inaugurated in 2015.
Skyrocketing living costs in a country where incomes were averaging $855 per capita before the coronavirus pandemic left most Ethiopians struggling to cope, but the transformation fuelled enthusiasm, nonetheless.
The future looked even brighter when Abiy became prime minister in 2018. Hopes abounded that his political ascent would quell two years of political unrest and anti-government uprisings that had unseated his predecessor, Hailemariam Desalegn.
Frustrated by years of state repression, protesters had demanded change. Heavy-handed government crackdowns over the course of 2016 often ended with security forces shooting and killing scores of unarmed youth. During this period, a slew of foreign-owned businesses was attacked and set ablaze by protesters who felt these companies did little to serve their communities.
Abiy’s freeing of thousands of political prisoners and announcement of plans to liberalise the economy appeared to herald a future of rising living standards, and for foreign investors, a chance to buy into what looked like a promising growth story.
Meanwhile, Ethiopia’s unrest did not quiet when Abiy took office. In 2018, some 1.4 million Ethiopians were displaced by ethnic violence and land disputes – the highest number in any country that year, according to the International Displacement Monitoring Centre. And approximately five months after Abiy became prime minister, communal clashes in an Addis Ababa suburb left 23 dead.
But Abiy’s international credibility got a sterling boost after he cemented a peace deal with neighbouring Eritrea in 2018, ending two decades of conflict and paving the way for landlocked Ethiopia to potentially access to Eritrea’s trade-boosting ports.
In 2019, Abiy was awarded the Nobel Peace Prize.
Now, the conflict in Tigray has badly tarnished those reformist credentials.
‘Divergent scenarios’
More than two million people have been displaced by the conflict in Tigray, an Ethiopian government official recently said on state-run TV.
Fighting continues in the conflict-ravaged region. Last month, the United Nations raised the alarm over “major violations” of international law at two refugee camps in Northern Tigray.
A starvation crisis looms.
Multinational corporations have pulled their staff and shuttered operations.
Chinese state-run Guancha news outlet reported that on November 13, the Welkait sugar factory, whose construction was funded by a $500m Chinese government loan in 2014, was damaged in an air raid during the Tigray conflict. The Chinese government ended up evacuating more than 600 of its citizens, including 187 of the factory’s employees.
The DBL Group, a Bangladeshi garments manufacturer, recently evacuated over a hundred foreign staff members from Ethiopia after the company’s factory in Tigray was hit by an explosion in November.
It has yet to reopen its facilities there.
Whether these are harbingers of a rethink by foreign firms is unclear. Some big-name multinational firms like British retailer Diageo, Chinese garment producer Wuxi Jinmao and German automobile manufacturer Volkswagen that had gambled on Ethiopia’s sizeable and young population have stayed the course through Ethiopia’s chronic power outages, slow internet speeds and bureaucratic difficulties that have seen the country slip down the rankings of the ease of doing business global index in recent years.
Dutch juice and fruit processing company Africa Juice had its project site in rural Ethiopia set ablaze by protesters in 2016, and the company pushed on with operations.