First there was a war, now Ethiopia faces a debt crisis.

“The World Bank has stepped in to fill the gap” in the past, said Mark Bohlund, a senior credit research analyst at REDD Intelligence. That’s “become more politically challenging in the wake of alleged human-rights abuses committed during the war in Tigray,” he said.

Source: Bloomberg

The nation’s request to restructure its external debt under a Group-of-20 program highlights how much circumstances have changed for the country and Prime Minister Abiy Ahmed in just over a year.

In 2019, Abiy won the Nobel Peace Prize for ending two decades of conflict with Eritrea. After coming to power in 2018, he was hailed for pledging to open up the economy and create more space for democratic expression.

General Economy In Addis Ababa
Banner besides a block of new residential buildings in Addis Ababa.

The coronavirus outbreak and a war with the rebellious Tigray region, have stifled that. Little progress has been made on privatization, and civilian casualties and displacement in Tigray has seen the leader of one of Africa’s fastest growing economies condemned internationally.

Now the country is worried about meeting its debt obligations and its announcement that it’s discussing liabilities with official lenders has sparked panic among private creditors. The country’s Eurobonds plunged the most on record last week.

“The World Bank has stepped in to fill the gap” in the past, said Mark Bohlund, a senior credit research analyst at REDD Intelligence. That’s “become more politically challenging in the wake of alleged human-rights abuses committed during the war in Tigray,” he said.

For now, there isn’t an immediate way out for Abiy.

The coronavirus has slashed demand for the country’s horticulture and textile exports and tourism has ground to a halt.

The war, which threatens to drag on in the form of guerrilla resistance, hasn’t helped.

11 comments

  1. In a strange way, Abiy won the Nobel Peace Prize for allegedly making peace with Eritrea; Ethiopia is now in a huge debt crisis, with its GDP almost at zero. A few years after the arrival of the new PM, it is no wonder that economic mismanagement, bad governance, and bankruptcy have appeared in the country. A reminder: he openly bragged about his skills at begging and procuring foreign aid. Abiy’s first cardinal sin is however his Faustian deal with the Ugly Eritrean: an epitome of rampant murder, rape, pillage, and wanton destruction in an already bad neighborhood: the Horn of Africa.

  2. I am so astonished by the valuation made by world leaders and organisations on different issues in the world. First they were completely enchanted and went to bed with one of, probably the best or worst fraudulent person who even was awarded a peace noble prize. This guy has cheated his way through by fake Doctorate degree and fake ethos and patos sheet talks. He is all the way made of lies and deceptions to an extent any one who discloses him must be exterminated or incarcerated. He closes the Internet and sms to block the truth come out. Once he even said that people have short memories, he cashes out on this theory in vein. The world must know by now their is no leadership in Ethiopia. The country is being looted the people are mistreated. People do not even feel safe with their properties they owned for generations. Any vagabond from the City office or others can come and fabricate accusations to seize your property. Whenever the government wants to run corruption it comes out with a new proclamation that sounds correct, in reality this is a coverup. Soon he will sell the companies and make more money abroad, Ethiopia is for sell and confiscation.

  3. Ethnocentricism is a primary feature in Ethiopian societies. Ability has released a box of disastrous predictable to those who have followed his career from army days, and surprises for those who don’t. Now it seems his political rapprochement and military harmonisation with the Eritrean despotic regime was preplanned. What a disaster for Ethiopia. Now devolve back to the Middle Ages with relentless wars to conquer regional rases and for him to be crowned, like the deceased Haile Selassie, king of Kings! Our leaders are myopic and bent on feeding a ravenously unsatisfied, all-consuming ego!

  4. All this intangable informations on current situation of ethiopia comes from those who lost their benefits as the junta weyane/TPLF the recist/ destroyed by ethiopian defence force. The truth on the ground is much more diffrent from the propaganda disiminated by our historical enamies.

  5. Two misrepresentations. a) Abiy Ahmed did not normalisé relations between Ethiopia and Eritrea. As long as Tigray is part of Ethiopia, the on going war in Tigray is essentially between Ethiopia and Eritrea. The fact that Eritrea was invited by Abiy doesn’t alter the nature of the current war.
    b) Abiy inherited one of the fastest growing economies in the world. He didn’t add a single penny to what the TPLF coalition Left. This article alludes Abiy has anything to do with economy he inherited. His priorities were on becoming a dictator not improving the lives of the people he claims to administer.
    c) Hé was adored by the West not because he promised to open up the political space but because he promised to privatisé state owned enterprises.

  6. US Secretary of State also reaffirmed, “the United States’ commitment to Ethiopia’s reform agenda” and “support for upcoming national elections, regional peace and security, democracy and human rights, justice and accountability, and economic prosperity for all Ethiopians.”

    The TPLF dominated government bankrupted the country before Dr. Abiy came to power. Corrupted government officials stole millions of dollars from the Ethiopian people to enrich themselves and their families. Now we blame Dr. Abiy for someone’s sins. SAD!

  7. The logical immediate way out for #abiy is
    • Grant quick access to aid workers
    • Stop his unjust war against #tigrepeople
    • Release unconditionally all political prisoners.
    Then all Ethiopians will come together as equals at a round table, will discuss problems and majority decision will be taken. Then #abiy might have leniency for the crimes he already committed.

    In other words no free way out for #abiy regardless of what ever he do.

    #tigray #ethiopia #tplf #abiyahmed #tesfagiorgis #biden #eu #england #martinplaut #africa #usa #middleeast #addisstandard #eritereahub #ethiopiainsight #tigrepeople #amhara #somali-ethiopians

  8. The above comments about the imminent crisis which the Abiy government will face is the wishful thinking of the woyane activists and their foreign collaborators. Ethiopia will shine through Abiy’s leadership.
    Down to the enemies of Ethiopia and Abiy.

  9. The above comments about the imminent crisis which the Abiy government will face is the wishful thinking of the woyane (TPLF)activists and their foreign collaborators. Ethiopia will shine through Abiy’s leadership.
    Down to the enemies of Ethiopia and Abiy.

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