April 13, 2025
Borkena
Toronto – The war in Ethiopia’s Amhara region is severely disrupting economic activity. For the last two years, the regional administration admitted failing to meet its revenue targets, while reports also revealed a worsening humanitarian crisis—including near-famine conditions in some areas, as previously reported by Borkena.
Much of the Oromia region remains embroiled in conflict, harming local businesses. In Tigray, basic services have been restored for over a year, but meaningful economic recovery—including tourism—has yet to materialize.
Despite this, Prime Minister Abiy Ahmed’s administration portrays a different economic narrative. Yesterday, he convened his cabinet to assess Ethiopia’s performance over the past nine months.
Fitsum Assefa, Minister of Planning and Development, presented the country’s economic outlook during the meeting at the recently renovated Emperor Haile Selassie’s Jubilee Palace.
The government touted a “stable macroeconomic landscape” and projected 8.4% economic growth. Officials linked this alleged success to macroeconomic reforms introduced in July 2024, which triggered a drastic depreciation of the Ethiopian Birr. Critics described the currency’s plunge as a “free fall,” with the Birr losing over 100% of its value against the U.S. dollar and other major currencies within six months. When the market-based exchange rate was introduced in July 2024, $1 USD traded for 57–58 Birr; it now exceeds 134 Birr.
Rumors suggest the reform was a precondition for the International Monetary Fund’s (IMF) Extended Credit Facility (ECF), which endorsed Abiy’s policies as a “homegrown economic growth plan.” Indeed, the government secured funds from the IMF.
Teachers and health workers protesting in many parts of Ethiopia in connection with months of unpaid salaries have been making headlines in many parts of the county – another reality that seems to contradict claims of economic growth.
Yesterday’s presentation claimed the new exchange regime boosted remittance inflows and foreign currency reserves. Unverified rumors also allege the policy enables illicit wealth holders to move money abroad in hard currency, though no evidence has surfaced.
The government also announced the Grand Ethiopian Renaissance Dam (GERD) is now “98.66% complete.” For nearly a year, the government has been making a headline in state-owned media outlets with a claim that it was over 97% completed. Initially designed to hold 74 billion cubic meters of water, Prime Minister Abiy declared it ready after retaining 42 billion cubic meters about a year or so ago. The number of turbines has also been reduced by at least two from the original plan.
“we should not feel complacent about what we have achieved over the past six months. We should work harder in the next three months,” Abiy remarked in a way asserting what was presented is real when it is not. Also, his party is said to have more than 30,000 paid “media army” that is reportedly working a full time and rotational basis to counter voices from opposition voices and distort information. It was Reuters who revealed that the government has a media army.
With the ruling party controlling over 95% of parliament, scrutiny of these growth claims is unlikely. Meanwhile, war continues to ravage Amhara, and fears of renewed conflict loom in the Tigray region of Ethiopia. Reports suggest the TPLF faction, led by Debretsion Gebremichael, is preparing for war with Eritrea’s support—a claim Eritrea dismisses as “warmongering.”
Abiy Ahmed’s ruling party has about 15 million registered members.
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