ETHIOPIA: Prisoners escape & more – 1st Aug 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 1st of August twenty twenty-four. A quick summary of what's going down in Ethiopia.

We start off with big news. On Sunday the 28th of July, the government announced a macro-economic reform program and as part of this program, the country’s foreign exchange rate will be based on the market as opposed to a rate that the government determines. The National Bank said that commercial banks are free from now on to negotiate the rates at which they buy and sell foreign currency. The Bank added that its involvement will be minimal. Following the announcement, the birr depreciated by thirty percent within twenty-four hours. Banks were buying and selling the US dollar at fifty-eight birr, but on Monday the number climbed to about seventy-five birr. Local experts have repeatedly warned against this move citing inflation and ineffectiveness at bringing about the wanted economic changes.

Opposition parties are also against this reform. For instance, the Ethiopian Citizens for Social Justice party, or EZEMA, issued a statement on Wednesday the 31st. The party criticized the decision to float the birr calling it an untimely measure that will cause severe hardship on citizens. The party expressed its fear that this move would cause severe inflation but was cognizant of efforts on the part of the government. The party was also not satisfied with how the government has communicated this development stating that officials should adhere to truth and professional integrity. The current Minister of Education Professor Berhanu Nega is the leader of EZEMA.

However, foreign entities seem happy about this decision and are commending it. The US Embassy in Addis said although this decision is tough, it is important to address macroeconomic issues. Additionally, major donors World Bank and the International Monetary Fund will reportedly support the reform with a financial package exceeding ten billion US dollars or almost a trillion birr. It seems the support arrived quickly; the International Development Association said a billion US dollars will be given as a grant and half a billion will be a loan. The Council of Ministers approved this deal on Wednesday the 31st and sent it to the House of People’s Representatives for its final say; the House approved the deal the same day.

These developments mean that there are going to be several changes. One of them is that the suspension of imports of about forty non-essential goods has been lifted. This means that importers will be allowed to use foreign currency to bring in these goods. However, this doesn’t mean that all previously barred imports will be allowed; the Ministry of Finance announced on Tuesday the 30th that diesel cars cannot be imported. The government hasn’t lifted the restriction on diesel car imports because it is encouraging the import and use of electric vehicles. Note that even if the restriction is lifted, it is still very difficult to import diesel cars because of the exorbitant excise taxes.

Let’s move on to news about the tragic landslide in the Gofa zone of the Southern Ethiopia region last week, which took the lives of over 200 Ethiopians. The House of People’s Representatives declared on Friday the 26th that the next three days would be national days of mourning. The victims of this tragic accident were remembered in these three days and Ethiopia’s flags all over the world were waved at half-mast.

In news from the turbulent Amhara region, during the ordinary annual congress of the region’s council, the law and justice administration matters standing committee presented a report indicating that a total of 7,000 prisoners have escaped from ten prisons across the region. The Committee said this was due to the deteriorating peace and stability of the region and that the government was able to recapture only a few of the escaped prisoners. The Committee also said that various crimes are on the rise, including murder, abduction, and robbery. The region’s peace and stability have been severely affected because of clashes between government forces and the youth movement Fano. Recall that fighting began about a year ago.

Further north in the country, another problem has cropped up and that’s the internal division within the Tigray People’s Liberation Front (or TPLF), which controls the current interim administration. Getachew Reda, the administration’s president, took to the public on Monday the 29th saying that this division has reached the stage where the two sides are unable to effectively communicate and accommodate differences. Certain members of the TPLF are saying that the interim administration that the Pretoria Agreement established is an illegal government; Getachew said these members were previously on board with the agreement. He expressed his dismay at a power struggle at this time when so many Tigrayans were displaced and in need of help.

In other news, the US has a program that stimulates trade between African countries and America under the Growth and Opportunity Act (AGOA). Although Ethiopia was originally part of the program, the country isn’t anymore and that’s because the US alleged that there are human rights abuses and enough progress hasn’t been made to improve the democratic system. Representatives from the US government announced in a meeting on Monday the 29th of July that Ethiopia will be reinstated to the program only after the government takes steps to improve the democratic system and human rights. They also said that President Joe Biden will decide before the end of the year if Ethiopia should be reinstated back into the program.

Speaking of Ethiopia and the US, international animal rights groups are protesting Ethiopian Airlines for transporting live monkeys to the US for laboratory use. People for the Ethical Treatment of Animals, an animal rights group, has launched a campaign against the carrier. The group says the airline is facilitating their use in experimental procedures. Three foreigners in Addis were also about to demonstrate in front of the airline’s head office before officers detained and deported them. Mesfin Tassew, the company’s CEO, held a press briefing on Monday the 29th and admitted that the company does transport live monkeys but that, in doing so, it has always complied with international aviation rules and has permits from the US and other countries.

The CEO also talked about the issue of late payments saying that at some point the company had an uncollected amount of over two hundred million US dollars. He added that the problem is especially prevalent in African countries and although the situation has improved and amounts due have decreased, this is a recurring issue and should be resolved soon. He also said that Eritrea, a neighboring country, owes the company more than two million US dollars and that the payment will be settled in accordance with an agreement between the two countries.

The Ministry of Education announced, at a forum held to discuss license-granting procedures for private learning institutions, that it has finished preparations to publish degree and diploma certificates in-house. Professor Berhanu Nega, the Minister of Education, said the education sector is deteriorating, and publishing certificates in-house will ensure that certificates are issued only after verifying a graduate's competence, ending the decentralized procedure of issuing certificates.

And for our final update, the Ethiopian Chamber of Commerce and Sectoral Associations has elected its new president in Sebsebe Abafra. Sebsebe is the former president of the Oromia Chamber of Commerce and he beat the Addis Ababa and Amhara Chambers of Commerce presidents. The election process was controversial and prompted the intervention of the Ministry of Trade and Regional Integration to ensure the integrity of the process. The Chamber of Commerce has various mandates given to it by law, including business and investment promotion and protecting the rights and interests of its members.

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

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Ciao!