ETHIOPIA: Egypt in Somalia Conflict & more – 5th Sep 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 5th of September twenty twenty-four. A quick summary of what's going down in Ethiopia.

We start off this week’s episode with follow-up news on the rift between Ethiopia and Somalia. Ambassador Taye Atske-Selassie, Ethiopia’s Minister of Foreign Affairs, said in a press release, on Friday the 30th of August, that Egypt’s involvement in Somalia poses a security risk but that this isn’t a major threat because he’s confident in Ethiopia and its people to maintain their sovereignty and repel any attack, adding that he isn’t losing sleep because of this.

Tensions in the region have heightened following Egypt’s deployment of soldiers and weaponry in Somalia for an African Union mission. Recall that Ethiopia is not on good terms with both Egypt and Somalia for different reasons. Somalia is upset over an agreement signed between Ethiopia and Somaliland allowing Ethiopia access to the sea in exchange for recognizing Somaliland as an independent state —recall that Somalia considers Somaliland part of its territory. Egypt, on the other hand, doesn’t like that Ethiopia built the Grand Ethiopian Renaissance Dam on the Nile River.

These issues were probably points of discussion when a lot of African leaders, including Ethiopia’s Prime Minister Abiy Ahmed, and Somalia’s President Hassan Sheikh-Mohammed, got together in China on Wednesday the 4th to attend the China-Africa Summit. After his meeting with President Xi Jinping, PM Abiy said that Ethiopia appreciates China’s multi-faceted support in different sectors, including agriculture, manufacturing ,and tourism, despite various setbacks, such as conflicts in parts of the country. He acknowledged China’s contributions, including granting funds, directly building projects, and training manpower. Another important meeting also took place; this one between Somalia’s President Hassan Sheikh Mohammed and Eritrea’s President Isaias Afewerki, both leaders of Ethiopia’s neighbors.

Before heading to China, Prime Minister Abiy Ahmed met with billionaire philanthropist Bill Gates, on Sunday the 1st of September. PM Abiy later took to his social media handles, saying that the two visited wheat cluster productivity and poultry farming, with Gates looking to strengthen partnerships.

Another American is set to come to go to Ethiopia. Ambassador Mike Hammer, the US special envoy to the Horn of Africa will be part of a multi-country tour, including Belgium and Kenya. His visit will be centered on reviewing the implementation of the Pretoria agreement (which ended the war with the Tigray People's Liberation Front or TPLF) and it comes at a crucial time, where top officials in the Tigray region are at odds. Recall that there’s a schism between the TPLF (the largest, most dominant political party in the region) and the interim regional government (officials who were previously senior members of the TPLF)

In other news, Taye Dendea, the former state Minister of Peace, will remain in custody after the Federal Supreme Court rejected his bail request. Even though Taye was first detained on multiple charges, including the dissemination of anti-peace forces’ propaganda, the Federal High Court acquitted him on these charges and he’s only being held in custody and appearing before court on charges of illegal possession of firearms. The Supreme Court reasoned that Taye shouldn’t be released because of the severe punishment he is facing and that there’s a risk he may not appear before the court. Taye will appear before court on the 18th of October.

On another note, Ethiopian Airlines will no longer fly to Eritrea because the country’s Civil Aviation Authority refused to repatriate money that the airline made in Eritrea. The Authority had been disgruntled with the airline, saying that Eritrean passengers’ luggage is frequently delayed and that the Airline owes compensation to these passengers. A few months after these warnings, these issues remain, so Eritrea is refusing the airline to send money it earned back to Ethiopia. Mesfin Tassew, the company’s CEO, clarified that the airline needs the money to fund its flights to and from Eritrea. Since the airline couldn’t collect this money, it had to stop flying there. Passengers who have already bought a ticket will get a refund. However, on Tuesday the 3rd of September, he explained that this doesn’t mean the airline won’t fly through Eritrea’s airspace.

The carrier was in the news again as its CEO revealed at the Civil Aviation Authority’s transformation program inaugural event that he had received a directive from the House of Federation, the upper house of parliament, saying that before the company builds another airport in the country, it will have to notify the House. He said that there are a lot of requests from regions asking the company to build more airports and that notifying the House will help ensure the fair distribution of airports across the country. There are currently twenty-three airports in Ethiopia and six more under construction.

The Authority’s head said that this transformation program comes at a pivotal time, where demand for aviation services has grown both locally and internationally. The transformation program includes overseeing the increase of airports, improving locally available aviation services, and supporting Ethiopian Airlines.

In economic news, The Ministry of Finance has announced a draft regulation on value-added tax (or VAT) collection procedures. The regulation says that only the federal government is obliged to collect the VAT. Regional governments and city administrations can only do so after obtaining permission from the federal government. Still, regions and cities will only be allowed to collect the VAT if the Ministry of Revenues doesn’t have an office in the city or region in question or if there’s an unstable internet connection making it hard to declare and pay taxes digitally. Aside from this, the draft regulation also provides that foreign companies engaged in taxable transactions will have to register as VAT payers and will be allowed to settle payments in several different foreign currencies.

Ever since Ethiopia allowed the free exchange of foreign currencies as part of the macro-economic reform program, the US dollar and other foreign currencies' official rate against the birr has been growing. As of Wednesday the 4th, the banks started buying one US dollar for up to a hundred and fifteen birr and selling for a hundred and twenty. Just a few months back, the official buying rate of one US dollar was around only fifty-five birr.

Previously, the National Bank set the official rates. The Bank has a very broad mandate as it regulates both bank and insurance. However, there have been talks over the years to establish a separate regulator for the insurance industry. Even though the regulator was slated to be established by the end of the previous budget year, on Friday the 30th of August, the Ethiopian Insurance Corporation, the biggest insurance company in the country, said in its annual report that no significant headway has been made. The deputy governor of the National Bank was also asked about the plans and the timeline for introducing a separate insurance business regulator, and he said he’d make no comments on the development.

And for our final update, sadly Professor Andreas Eshete passed away last week on Thursday the 29th of August, at the age of seventy-nine. He was a prominent scholar, philosopher, former president of the Addis Ababa University, and advisor to former Prime Minister Meles Zenawi. During his tenure as president of the Addis Ababa University, he issued various progressive policies that fostered inclusiveness, initiated numerous programs, and opened faculties that increased the volume and value of research conducted in the university.

Aaand that’s it for this week! Thank you for joining us!

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