ETHIOPIA: Getachew Red Steps Down & more – 27th Mar 2025

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 27th of March twenty twenty-five. A quick summary of what's going down in Ethiopia.

There were major developments this week in the north as the rift within the Tigray People’s Liberation Front, the region’s predominant party, continues. The Prime Minister’s office confirmed on Wednesday the 26th that Getachew Reda, the leader of one of the factions within the party and president of the region’s interim administration, has officially stepped down.

Prime Minister Abiy Ahmed also said in his statement that the Tigray people may submit recommendations for nominees through an email of the Prime Minister’s Office. The government will name a new leader for the interim administration, before a regional election is organized to vote to form a government.

This development could mean an end to the months-long rift between the top leaders of the party, which is great news since Getachew himself has admitted that the party’s internal disagreements have affected the region’s political, economic and social stability.

In the Amhara region, in north-central Ethiopia, residents report that another fighting round started on Friday the 21st. They said that militants from both sides, the government and the popular movement Fano, have been killed. According to residents, the new fighting round began after Fano militants opened fire in Gondar city. The number of casualties has not been confirmed but the region’s communication bureau said that there are civilians among them.

Despite efforts to negotiate, the fighting continues and if it doesn’t end by August, the conflict will reach its second year.

Residents of the Benishangul-Gumuz region, Amhara’s neighbor to the west, also say the situation is unstable. In one of the districts, residents told media outlets that unidentified assailants murdered two civilians. The attack allegedly took place on Sunday the 23rd.

There are allegations that an opposition party, the Gumuz People’s Democratic Movement, is responsible for the attack. However, the Party’s chairman immediately denied these accusations, saying that the Party has accepted the government’s call to assume power peacefully, adding that its members have also laid down arms.

The region’s peace and security office head, on the other hand, confirmed the casualties but refrained from identifying those responsible, stating that the region’s law enforcement will work to bring the attackers to justice.

Following PM Abiy Ahmed’s remarks last Thursday the 20th on Ethiopia’s access to the Red Sea, which we discussed last week, Eritrea and Egypt, both countries by the coast of the Red Sea, said they reject the involvement of non-coastal states in Red Sea security. This statement came after Eritrea’s Minister of Foreign Affairs went to Egypt to deliver a message to Abdel Fattah Al-Sisi, Egypt’s President, on the two countries' bilateral relations, but there were no more details. Both Egypt and Eritrea said only coastal states should govern the sea.

Eritrea’s Minister of Foreign Affairs had previously denounced Ethiopia’s requests, calling them a misguided and outdated ambition. Both Eritrea and Egypt have sour relations with Ethiopia and fear that the country might use force to access the sea, although PM Abiy Ahmed has publicly ruled out invasion, opting for a transactional approach.

In other news, a Federal Supreme Court judge recently told media outlets that preparations are underway to establish a special bench which will address gender-based violence, especially in the context of conflicts.

The Court has been working with NGOs and universities to put together a document that will indicate how gender-based violence cases can be dealt with quickly. The judge said that there has been a rise in the number of crimes which, unless addressed immediately, can have serious consequences.

The judge noted that if these cases are considered together with others, it will take years to serve justice. He also discussed the importance of treating victims of gender-based violence, especially indicating that currently they’re being treated similarly to victims and witnesses of other less severe crimes.

This month’s fuel price increases felt like they came out of nowhere since fuel price hikes are usually announced by the beginning of each month, if there are any. On Sunday the 23rd, the Ministry of Trade and Regional Integration revealed that the regular gas price for a liter of fuel has been increased to a bit over a hundred and twelve birr, which is around ninety US cents. This is a price increase of over ten birr, around eight US cents, an eleven percent rise.

The recent jumps are due to the government’s decision to roll back subsidies to completely cease subsidising fuel, meaning that citizens should expect another round of increases within the next three months. To add to this, in certain parts of the country, there is a severe fuel shortage forcing drivers to buy from shady dealers in the black market, paying even more than the already high official rates.

On another note, on Friday the 21st, the Ministry of Finance announced that Ethiopia will have breathing room in paying back some of its outstanding loans. The Creditor Committee under the G20 Common Framework has agreed in principle to grant the country a grace period of two to four years to pay back about 8.4 billion US dollars.

The deal is not official yet because Ethiopia and the Creditor Committee will have to sign a memorandum of understanding and after that, the country will have to sign bilateral agreements with each member state of the Committee.

However, officials are hopeful that this deal will go through. They pointed earlier that it was likely that Ethiopia was going to get debt treatment after striking a loan deal with the International Monetary Fund eight months ago.

In more news on finance, on Tuesday the 25th, the National Bank revealed that some banks are facing liquidity problems after its Monetary Policy Committee gathered to review and make recommendations. Even though the Committee said it recognized that the banking sector is stable with low unperforming loans and adequate capital, banks don’t have enough cash on them at the moment.

It has also noticed that banks are betting on expectations regarding foreign currency, which may adversely affect the economy and increase the inflation rate. The Committee added that compared to three months ago, when it held its previous meeting, inflation has decreased. To combat inflation going forward, the Bank has also decided to cap the National Bank rate at the current fifteen percent.

Ethiopia’s sovereign wealth fund, Ethiopian Investment Holdings, announced on Saturday the 22nd that it is ending its partnership with Dodai, a Japanese EV bike company. The two struck a deal late last year to develop a battery-swapping station for electric motorcycles.

The plan initially aimed to establish a hundred battery-swapping stations across Addis Ababa in just a year. The fund explained that it wouldn’t be able to continue this project directly and that it would prioritize structured investments instead of partnerships — probably because they didn't want the risks associated with the venture. The two mutually agreed to terminate the deal.

Let’s close this edition with an update to a story from last week’s show. Recall that Ethiopia sent delegates to negotiate to become a member of the World Trade Organization (or WTO). Well, this week, the delegates returned. The Minister of Trade led the delegation and told the media in a presser on Monday the 24th that although the country has received support from the World Bank and nineteen countries, the Organization has asked the country to further open up its telecom and finance sectors. The WTO also wants the country to lift restrictions on the ability of foreigners to import and export.

He also addressed concerns that the country will lose more than it gains if it becomes a member of the WTO. He said that not allowing foreigners’ entry into certain sectors has only harmed the country and that joining the organization and allowing foreigners to export will help increase the country’s export volume.

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

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