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Ethiopia: Keeping it all together | Analyst Picks | RiskMap 2020

Ethiopia

Ethiopia risk forcast

Keeping it all together

 Patricia Rodrigues

The sense of euphoria that characterised Prime Minister Abiy Ahmed’s appointment and accompanying economic and political liberalisation agenda has faded somewhat in the past year. Instead, in 2020 Abiy will be faced with the difficult task of uniting Ethiopia in advance of the legislative elections that are currently scheduled for May, and in their aftermath. He will be required to counter the growing popularity of ethno-nationalist parties that have been calling for more autonomy to be granted to ethnic groups and their respective regional states. He will also need to unite a ruling coalition that is deeply divided over the shift away from a state-led approach to economic development and the opening of the political space. While the ruling coalition and its allied parties will benefit from their access to the state apparatus to secure their majority in parliament, the election period will be tense. Further incidents of political violence are likely amid heightened tensions and the inability to demobilise several ethnic militias.

However, although the political distractions will attract the most attention, the country’s economic potential should not be understated. Economic growth is anticipated to be one of the highest in Africa in the year ahead. In addition, the administration’s push to open strategic sectors – telecoms, energy, aviation and logistics – is set to continue, as is the government’s intent to improve infrastructure . Abiy has made diversifying the country’s economic relationships with Western and non-Western countries a priority. All of this will allow investors to enter and serve one of the largest internal markets on the African continent. Although bureaucratic reforms in the wider administration will take some time, investors are likely to find a government keen to support their activities in the country
 

 

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