thiopia’s recent political crisis has had devastating consequences, leaving the North in ruins, the national economy crippled, and causing significant societal disruption, trauma, and a large-scale humanitarian crisis.
What initially started as a “law enforcement operation” in November 2020 quickly escalated into a protracted war, as predicted by some analysts who accurately foresaw the impact on Ethiopia’s political economy. The country now grapples with the harrowing aftermath of war, both in terms of human casualties and the decimation of industrial capacity.
According to a report released by the Ministry of Industry last year, the war led to the suspension of production in over 446 industries. Damage assessments, comprehensively evaluating the extent of destruction across various sectors including infrastructure, healthcare facilities, education systems, and economic resources, have already been conducted.
In the government’s Damage and Needs Assessment report released in April 2023, it was estimated that the war has inflicted a staggering cost of approximately USD 28 billion upon the nation. In addition to the ruinous impact on infrastructure and utilities in the north, underreported conflicts in areas like Wollega and Metekel among others have also exacted a heavy toll on the nation. Tragically, as a result of these internal conflicts, there is once more an underreported humanitarian crisis involving displacement of over four million people.
As per estimations, the recovery and reconstruction project, slated for completion within five years, requires an estimated USD 20 billion (19.7 billion to be exact). However, the estimation should be taken with a “grain of salt”, as emphasized by Eyob Tekalign(PhD), the State Minister of Finance leading the initiative.
The government initiated the Recovery and Reconstruction Project over eight months ago, aiming to restore infrastructure, reopen schools and healthcare facilities, and provide basic services such as water and electricity. Yet, this endeavor extends beyond mere physical restoration or resuming services; it seeks to instill a renewed sense of normalcy and hope.
Looking back to the post-World War II era, several European countries faced the daunting task of recovery and reconstruction after being left in ruins by the war. They successfully implemented a large-scale recovery plan known as the Marshal Plan, named after George Marshal (Gen.). Also referred to as the ‘European Recovery Program,’ it provided over USD 15 billion to finance rebuilding efforts. Thanks to this initiative, many European countries were able to make a full recovery. Similarly, Rwanda managed to recover remarkably after enduring one of the most horrific genocidal experiences.
Unfortunately, due to various compelling reasons, such initiatives face significant challenges when it comes to Ethiopia’s current situation. One crucial factor is the global landscape, where numerous pressing needs in different parts of the world vie for the attention and resources of potential donors and investors. While crises unfold in the Middle East and other regions, many countries have turned their focus towards the situation in Ukraine.
The Ethiopia’s recovery and reconstruction initiative simply has its head in the clouds. Nonetheless, Eyob(PhD) hopes a more favorable year may lie ahead.
He states, “We are in full agreement about how critical this job is. But in terms of providing resources, they claim that they are constrained by a lot of global challenges indicating that 2024 might be a better year.”
The ongoing nature of the conflict presents another major obstacle that could hinder such initiatives.
Turhan Saleh, the resident representative of the United Nations Development Program (UNDP), one of the key advocates for mobilizing funds for Ethiopia’s post-war endeavors, emphatically calls for a commitment to peace and stability from the Ethiopian government.
“There are numerous crises around the world, and Ethiopia is competing for limited resources. We are advocating for Ethiopia, but donors and investors pose a critical question,” Saleh explained. “‘Will we have peace and stability in Ethiopia?’ They ask for a guarantee,” he said.
“At least give us confidence,” the Representative said, urging the government to demonstrate a firm dedication to peace and stability, as this is essential to secure the financial support required for the country’s recovery and reconstruction.
Germany’s ambassador to Ethiopia, Stephan Auer, chose to express his government’s position without diplomatic niceties during a recent press conference.
He boldly asserted, “To put it very bluntly, it is difficult to argue for money to rebuild a bridge which will be destroyed the next day by conflict.” Thus, stability and peace remain indispensable prerequisites.
Recovery and reconstruction necessitate substantial financial resources, and Ambassador Auer’s country-Germany, is well aware of this fact. In the ‘Marshal Plan,’ Germany itself received a loan of USD 1.4 billion dollars (equivalent to USD 16 billion today) for its own recovery and reconstruction efforts.
Despite the challenges, Germany remains committed to supporting Ethiopia’s recovery. However, their support comes with a significant precondition. The Ambassador highlights the necessity of convincing and showing the allocated funds will be well-spent.
“Indeed, there is a competition for resources out there. And we need to explain to our capitals; my capital in Berlin and that of the EU in Brussels that every penny we are spending in Ethiopia is well spent and reaches the needy one,” Auer emphasized.
Transparency is a paramount concern for donors, alongside peace and stability, as they strive to ensure that funds reach their intended beneficiaries. In this regard, the Ambassador emphasized “We need a safe card system that aids diversion as it had happened here in a systematic and quite big way doesn’t happen again.”
During the conflict, humanitarian aid diversion took place, initially attributed to the Tigray People’s Liberation Front (TPLF) and the government itself, as acknowledged by international institutions over the past two years.
Reports revealed that the TPLF looted humanitarian aid, while the federal government was accused of diverting aid wheat for export. Consequently, some organizations, such as USAID, became hesitant to provide humanitarian assistance until recently.
Creditors have not responded favorably to its request for debt restructuring under the G20 common framework.
When it comes to securing adequate funding for its recovery, the country has continued dealing with serious challenges. Creditors have not responded favorably to its request for debt restructuring under the G20 common framework.
Additionally, its membership in the BRICS may also play its part in negatively impacting its chances of receiving support from international financial institutions.
Senior political economist Zinabu Abera (Prof.), a retired researcher at Addis Ababa University and the current chairman of the Ethiopian Peoples Revolutionary Party, is known for voicing his views on national issues without much regard for political correctness. He expresses more circumspect.
While acknowledging the challenges in obtaining the requested funds, Zinabu argues that this is not the only issue. He says, “When the current administration first took office, it declared that a substantial quantity of money had flowed out illicitly. It has been more than five years since the Prime Minister pledged to return it to the nation. What became of it? While that is one aspect to consider, Zinabu says, the most disheartening question is: “how can we not believe that an even worse situation is currently unfolding?’
Zinabu further adds, “You can imagine what happens when you give access to Forex to someone who is responsible for driving up the price of a quintal of cement to 2,000 birr artificially.”
Recovery and reconstruction are formidable tasks that lie ahead. Nevertheless, the urgency to address immediate humanitarian needs remains more crucial than ever, considering that 30 million people are in dire need of assistance—a truly alarming figure.
Assessing and adequately addressing the impact on civilian lives, including casualties, displacement, and trauma, remains a complex challenge. It is a daunting task to confidently assert that these issues have been thoroughly evaluated and effectively resolved.
Restoring social cohesion and rebuilding shattered communities are monumental assignments that must be undertaken to ensure a meaningful recovery.
The displacement of people further compounds the difficulties, exacerbating the existing humanitarian crises and compounding the challenges faced in rebuilding infrastructure and utilities.
Ethiopia is confronted with a staggering population of internally displaced individuals, making it one of the largest such populations globally, with 4.2 million people displaced throughout the country. According to the displacement tracking matrix established by the International Organization for Migration (IOM) in February 2022, conflict accounts for approximately 85 percent of these displacements.
The scale of internal displacement is truly shocking.
Debre-Berhan is one of the areas in the country where there are hundreds of thousands of people displaced due to conflicts in other parts of Ethiopia, such as Wollega in West Oromia. The need to address immediate humanitarian needs in these areas is more pressing than ever.
The signing of the Pretoria agreement a year ago had raised hopes for an “inclusive and sustainable” recovery.
However, achieving such a recovery has remained elusive. Conflicts persist in various parts of the country, particularly in Amhara and some parts of Oromia, posing significant challenges to the recovery and reconstruction efforts.
In Ethiopia today, particularly in some regional states, it has become uncommon to hear government offices frequently failing to provide civil servants with the minimum compensation i.e their monthly salaries. In this sense, the Hadya zone of the recently established Central Ethiopia Regional State serves as a typical example. Teachers and other health professionals stopped coming to work because the zone was unable to pay them, which resulted in several schools and health stations closing for months. Amhara and other regional states have also had difficulty making ends meet. That is the most depressing aspect of the nation.
Chronic foreign currency crunch has been and continued to be a serious bottleneck to the economy. The magnitude of the problem goes to the extent of forcing big manufacturers to halt production.
The process of post-war reconstruction is a multifaceted undertaking that necessitates meticulous planning, coordination, and implementation of strategies to rebuild nations ravaged by conflict. Effective planning should encompass the allocation of resources to rebuild critical infrastructure and public services, while also addressing the socio-economic disparities exacerbated by war.
Looking back at post-WWII examples, countries like Germany and Japan successfully embarked on their paths to recovery and reconstruction. It took them two decades to achieve significant progress.
However, the current situation in Ethiopia appears to be far more complex and challenging.
“The difference is that those countries had responsible governments, to say the least. They clearly knew what they were doing when it came to recovery and reconstruction,” Zinabu commented.
Indeed, those countries had visionary leaders who could envision a future beyond the immediate devastation and work towards tangible outcomes. Zinabu sees no foresight and practical goals being pursued in Ethiopia.
“I find a lack of clarity of purpose within the government corridors. On one hand, they engage in destructive actions and then ask for finances for reconstruction. Meanwhile, they continue to wage war and invest in costly drones to be used against their own people,” he said. “I fail to comprehend this approach to recovery and reconstruction,” expressed Zinabu with concern.
The pursuit of political stability under the current administration has remained an elusive goal.
“At times, our thinking is akin to smallpox, where it seems everyone needs be to be inflected so that everyone would feel safe. I think that touched probably all. Hopefully we have full redemption from this unnecessary useless conflict,” added Eyob, highlighting the urgent need for resolution.
Debre Birhan Refugees Cump Aid with UN Refugee AgencyAs a result, the ongoing political crisis hinders any progress in the recovery and reconstruction efforts.
“Famine, rather than recovery, is what awaits us. It is a harsh and cruel reality,” lamented Zinabu, emphasizing the dire circumstances faced by the nation.
The State Minister, however, tends to attribute this to challenges within the nation-building process.
“We have an incomplete state formation. We do not have a lasting political settlement. We need to agree on fundamentals as a nation,” Eyob nted.
One thing is now abundantly clear: putting an end to the ongoing conflict is an absolutely crucial prerequisite to take any meaningful strides in the recovery and reconstruction initiative.
“First, let us observe a moment of silence. Cease the conflict, reflect on the damage we have inflicted upon ourselves, and earnestly plan for the future we envision,” Zinabu emphasized, underscoring the importance of collective action and thoughtful planning for a brighter tomorrow. “It is then that our talk of recovery and reconstruction will give sense.”