Prime Minister Abiy Ahmed is defying expectations, bringing peace, and reviving Ethiopia's economy.
Ethiopian Prime Minister Abiy Ahmed’s April 2018 inauguration speech promised the “start of a new chapter” for the impoverished nation. Yet few felt optimistic. Ethiopia had long been an autocratic state ruled by a succession of brutal dictators, and Ahmed emerged out of military obscurity.
Since then, however, Abiy has been doing much to prove the world wrong. Last month, he was awarded the Nobel Peace Prize, largely for resolving conflict with neighboring Eritrea. The Norwegian Nobel Committee noted further that “Abiy has initiated important reforms that give many citizens hope for a better life and a brighter future.”
A rapid-fire series of reforms has already drastically transformed political life in the Ethiopian nation state. The Nobel Committee specifically praised that in his first 100 days, Ahmed gave amnesty to thousands of political prisoners, discontinued media censorship, legalized formerly outlawed opposition groups, dismissed leaders suspected of corruption, and significantly increased the influence of women.
He is also liberalizing the economy. The government is pressing ahead with high-profile infrastructure investments including hydroelectric dams, railways and roads. Expanding agriculture to grow exports is a priority. So is attracting investors through incentives like tax breaks, cheap labor and energy.
“Abiy is telling the world Ethiopia is open for business,” says Gabriel Negatu, outgoing director general of the East Africa Region at the Africa Development Bank. Opening key sectors like financial services and telecoms, coupled with plans to privatize state entities including Ethiopian Airlines, should encourage more investors to enter the country, he argues.
Still, concerns abound. In September, Moody’s downgraded Ethiopia’s outlook to negative from stable owing to a widening mismatch between debt and revenues and thin reserves coverage for imports, leaving limited capacity to absorb shocks.
“Ethiopia will continue to grow, but hiccups exist,” notes Negatu. Notably, the challenge of lifting a majority of the country’s 109 million population out of poverty remains daunting. Per capita annual income currently is only $790, according to the World Bank.