opening up isn’t easy

Ethiopia: The challenges of liberalising the economy

By Samuel Getachew

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Posted on March 2, 2021 14:20

Ethiopia Adwa Day © A theatrical troupe poses for a photograph on Adwa Victory Day, in the capital Addis Ababa, Ethiopia, Tuesday, March 2, 2021. (AP Photo)
A theatrical troupe poses for a photograph on Adwa Victory Day, in the capital Addis Ababa, Ethiopia, Tuesday, March 2, 2021. (AP Photo)

When it comes to liberalising Ethiopia’s economy, if the government moves too fast, it risks losing the support of local business and the population; move too slow and international investors could lose interest.

The government of Ethiopia’s Prime Minister Abiy Ahmed had been trying to find the right pace of reform before conflict in Tigray broke out in November, casting a pall over Nobel Peace Prize-winning Abiy’s plans.

The state has played a major role in Ethiopia’s economic transformation, building industrial parks, modernising the Ethiopia-Djibouti railway and managing a telecoms monopoly and top African airline Ethiopian Airlines.

The Abiy administration was planning to open up many of these sectors to foreign investors. Addis Ababa has cancelled the privatisation of Ethiopian Airlines but says it will go ahead with the partial privatisation of Ethio Telecom and also issue two new telecoms licences.

The government’s reasoning for opening the economy is sometimes unclear. When it walked back the plans to sell a minority stake in Ethiopian Airlines in October, finance minister Ahmed Shide

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