Koki Abesolome ·Follow
You Must Trust Me When I Say This Article Will Destroys Abiy’s Economics Like My Article on Oromummaa Killed Asafammaa Jaletummaa.
This is Just the Snapshot and the Abstract. I will share the article when it is published. It is 30 pages long. Once You read the Snapshot and the Abstract you cannot wait for the full article. Not to brag or anything, but it feels good to be good!
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SNAPSHOT
Survival, Not Development: Ethiopia’s budget marks a shift from development to survival—capital expenditure down to 21.5%, recurrent up to 61%. No country has ever developed with such a structure.
What Has Gone Up: Skyline of Addis Ababa; war spending; poverty (31% in 2016 → 43% in 2025); unemployment of university and high school graduates; prices of food, gasoline, and rent.
What Has Gone Down: Spending on manufacturing, health, and education (% of GDP); agriculture (% of expenditure); foreign direct investment; purchasing power of the birr; and human life.
What Makes No Sense: The Prime Minister’s Delusional “Digital Ethiopia 2030 Strategy” in a country where education funding is falling and 92% of high school students fail the university entrance exam.
Government Spin vs Reality: The Government Claims “Low international borrowing reflects reduced need.” Reality: All three Major International Rating Agencies have downgraded Ethiopia to junk. Banks have effectively shut the door on Ethiopia.
Diaspora Losses: A diaspora investor who bought a 2-million-birr condominium in Addis Ababa in 2019 would face a 39% loss if selling and repatriating today.
Remittance Illusion: The rise to $6–7 billion in diaspora remittance reflects a shift to formal channels and economic crisis-driven additional support to family members —more safety net lifeline than investment.
Opportunity Cost: Investing in power transmission and irrigation instead of urban corridors could have raised farm profits by 58–98%, reduced diesel imports, accelerated industrialization and laid the foundation for economic transformation.
Middle-Class Erosion: No country has developed without building a middle class. Ethiopia is moving in the opposite direction—its middle class is shrinking, with professionals like doctors and professors reduced to near-subsistence wages.
Quotable Quote: “Ethiopia faces severe economic, political, and humanitarian challenges alongside unsustainable debt levels—conditions that underscore the country’s mounting macroeconomic fragility.” Joint IMF–World Bank Debt Sustainability Analysis (2025)
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Abstract
The problem in Ethiopia’s economy stems from PM Abiy’s philosophy of economic abundance, which assumes that resource constraints can be overcome through positive thinking, ambition, and state-led mobilization rather than disciplined prioritization. This philosophy manifests itself in four patterns: first, the simultaneous pursuit of multiple capital-intensive mega-projects despite limited resources; second, poor prioritization in policy decisions; third, the allocation of resources toward recurrent expenditure at the expense of productive capital investment; and fourth, the ambition to leapfrog from a largely agrarian base to urban focused and a digital, service-led economy without first building the necessary foundations. This approach stands in sharp contrast to the economics of scarcity, which has underpinned successful development strategies over the last three centuries through sequencing, prioritization, and resource discipline.
This paper argues that the country’s core challenge is a misalignment between political ambition and the nation’s scarce resource base, as well as the institutional foundations required to sustain it. Compounding this is a constitutional crisis: Ethiopia’s economic trajectory is shaped by the PM’s discretion, in defiance of the constitutional order that empowers the legislative branch with oversight authority. The absence of protected property rights represents another foundational fault line, shifting the nexus of competition from economic productivity to political access. These dynamics render conflict and instability endogenous to the structure of economic governance.
The analysis is organized around four diagnostic pillars. First, misallocation: resources have been diverted from agriculture and industry toward speculative construction and mega-projects, undermining the productive base and contributing to a shrinking middle class. Second, institutional weakness: the erosion of property rights and the marginalization of constitutional checks and balances foster political entrepreneurship while crowding out genuine productive enterprise. Third, macroeconomic constraint: foreign exchange shortages, fiscal strain, and the state-owned enterprise–bank–sovereign nexus increasingly constrict policy space. Fourth, rising debt burdens and the nation’s inability to service international loans have prompted the world’s most reputable global creditworthiness rating agencies to classify the country “junk.”
Drawing on comparative experiences from China, Vietnam, and South Korea and integrating macroeconomic data with micro-level evidence the analysis moves beyond surface indicators to diagnose deeper structural and institutional fault lines. It goes further and presents a counterfactual analysis. The question is: What if the resources the government spent on corridor development had been directed elsewhere—toward expanding electric transmission and scaling irrigation through electrically powered pumping systems? This is not a speculative exercise. Ethiopia’s own data provides a clear answer: Irrigated farmlands and powerlines, not the corridors, hold the key to Ethiopia’s future.
The article concludes: Ethiopia’s choice is not between ambition and prudence, but between continuing a politically driven momentum model and transitioning toward a strategy grounded in productivity, anchored in a suitable institutional framework, and capable of maintaining solvency in its external accounts. The stakes are nothing less than whether Ethiopia’s ambition proves its salvation or its undoing.
