The Somaliland Deal & more – 4th Jan 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 4th of January twenty twenty-four A quick summary of what's going down in Ethiopia.

Welcome to the first episode of twenty twenty-four.

On Monday the 1st of January, Ethiopia and Somaliland, an entity that seeks recognition from the international community as a state, signed a memorandum of understanding. According to the memorandum, Somaliland will grant Ethiopia access to the Red Sea and, in return, Ethiopia will recognize the statehood of Somaliland and give stakes in state-owned companies.

However, the deal did not sit well with Somalia’s government, which says that Somliland is part of its territory and not a sovereign state. The day after Abiy Ahmed, Ethiopia’s Prime Minister, and Muse Bihe Abdi, Somaliland’s president, signed the document, Somalia’s cabinet convened for an emergency meeting. After the meeting, Hamza Abdi Barre, Somalia’s Prime Minister, issued a statement denouncing the agreement, saying that it breached Somalia’s territorial integrity. He also said that Somalia won’t tolerate encroachments on its sovereignty. After the statement was released, media outlets reported that Somalia called on the UN Security Council, the Arab League, the African Union, and other intergovernmental organizations to convene emergency meetings and support Somalia in defending its territorial integrity. Somalia also recalled its ambassador in Addis, Abdullahi Warfa, ‘for consultations.’

Also on Tuesday the 2nd of January, Hassen Sheikh Mohammed, Somalia’s president, talked to Abdel Fatah El Sisi, his Egyptian counterpart, over the phone. El Sisi told Hassen Sheikh Mohammed that Egypt stands with Somalia and is committed to support the country’s peace and security. Recall that Ethiopia and Egypt are not on the best terms because Ethiopia built the Grand Ethiopian Renaissance Dam on the Nile River.

The European Union also had its say on the matter. On Tuesday the 2nd, the Union issued a statement saying that according to Somalia’s constitution, the African Union, and the UN’s charters, Somalia’s unity, sovereignty and territorial integrity should be respected.

Despite Somalia’s dissatisfaction, Ethiopia has revealed the details of the deal. Redwan Hussein, PM Abiy’s national security advisor, said that the Memorandum of Understanding includes a lease arrangement whereby Ethiopia will control the Berbera seaport for fifty years. He also said that the agreement will be finalized and take effect in a month. As part of the agreement, Ethiopia will be allowed to have a military base and a maritime commercial zone. Redwan added that Ethiopia will give shares from Ethiopian Airlines, Ethio Telecom and/or other public companies to Somaliland but that the number of shares will be determined in the future.

In other news, Ethiopia, along with Iran, the UAE, Saudi Arabia, and Egypt, officially joined the BRICS bloc of countries on Monday the 1st. The countries had received an invitation to the group in August last year. After Ethiopia officially joined the group, the Ministry of Foreign Affairs said that the membership recognizes Ethiopia's rich multi-lateral contribution to promoting international peace, security, and prosperity. Ethiopia has appointed Mamo Mihretu, the governor of the National Bank, as Sherpa, the personal representative of the head of state to BRICS.

The Tigray region’s interim administration said that the federal government hasn’t responded to a five billion birr or ninety million US dollar loan request. The region planned to use that money to pay civil servants’ wages. Because of the two-year-long war that ended in November twenty twenty-two, about a hundred and forty thousand civil servants of the region haven’t been paid their wages in full. The interim administration’s finance bureau said that the budget support that the federal government has granted to Tigray, twelve and a half billion birr or almost two hundred and thirty million US dollars, was not enough to compensate government workers. A few months ago, the Minister of Finance said that it could not grant money to regions but could only lend, according to the Public Finance Law. The region’s finance bureau said that it’s been three months since Tigray asked for a loan. However, officials from the Ministry of Finance are reviewing the request just now.

Moving on, The Ministry of Trade and Regional Integration has officially given the green light to BGI Ethiopia to acquire Diageo breweries. Even though the French beer company BGI wanted to buy Diageo a year ago, the Ministry didn’t approve the acquisition back then. However, on Monday the 1st, the Ministry gave the go-ahead, and BGI bought Diageo. The approval took this long because the Ministry had to examine whether or not the acquisition would adversely affect consumer protection and trade competition.

The Ministry said the examination was necessary because there are only a few alcohol manufacturing businesses in the country, and letting BGI acquire Diageo would give BGI significant power and leverage in the market, affecting consumers and other companies. To ensure this won’t happen, the Ministry has revealed certain conditions to which BGI must adhere even after the acquisition’s approval: BGI won’t be allowed to enter into agreements with other companies in the market that will adversely influence competition, make unwarranted price increases, among others.

Next up, recall that Alusius O’Neil, a Nigerian national, was caught in possession of more than fourteen kilograms or thirty pounds of cocaine. He just arrived in Addis from Sao Paulo, Brazil. He was then going to take a plane to Abuja.

The Federal High Court’s cross-border crime bench found O’Neil guilty and sentenced him to ten years in jail. On top of that, the Court slapped him with a twenty thousand birr or a three hundred and sixty US dollars fine. O’Neil had pleaded not guilty, saying that there were no narcotics in his luggage, but the prosecutor’s evidence convinced the court that the defendant had committed the crime of possessing illicit narcotic substances with the intent of trafficking.

The Ethiopian Airlines Group revealed that it is on the verge of receiving a large piece of land from the Oromia regional government to build a huge airport in the region. An executive of the company told the media that the regional government, in collaboration with the federal government, is clearing the land. The airport will sit on almost forty square kilometers of land in Debre-Zeit, a city in the Oromia region close to Addis, and will cost more than five billion US dollars. Upon completion, the airport is expected to have more than eighty million guests a year, a significant jump from the twenty million people Ethiopia’s biggest airport currently accommodates per year. Aside from the facilities and provisions an ordinary airport has, the new airport will have hotels, a cargo logistics center, and a train connecting it to the Bole International Airport in Addis.

Ethiopian Airlines was in the news again as it announced that it is going to increase its flight frequency from Addis to Toronto, Canada. The airline has been flying to the city five times a week, and starting from April this year, it will be flying there daily. Recall that Ethiopian Airlines is the first ever airline to fly regularly directly from Africa to Canada.

As the holiday season comes to an end around the world, in Ethiopia, it’s just getting started. Ethiopian Christmas will be celebrated this Sunday the 7th, because Ethiopia uses the Julian, not the Gregorian calendar. Less than two weeks later, the Epiphany of Jesus Christ will be celebrated. We wish you a Merry Ethiopian Christmas.

Aaand that's it for this week!

Happy New Year from the Rorshok family! These are our wishes for twenty twenty-four: 1) that you tell your friends about us. 2)... Nope, that’s about it.

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Ciao!