3 November 2018

Ethiopia Can't Be Choosy, for Now

opinion

Prime Minister Abiy Ahmed (PhD), soon after his swearing in as the nation's premier, made state visits to Middle Eastern and African countries. If Ethiopia had not been dependent on Western aid, skills and loans for such a long time, this would not have been too out of place.

But the increasing dependence on Middle Eastern allies and a resurgence - of a kind - on pan-African relations speaks to the changing global dynamics of power and priorities on the part of Western powers. It was notable, for instance, that when Italian Prime Minister Giuseppe Conte came, he signed agreements for 30 million Euros, of which two-thirds were in the form of loans.

The UAE's crown prince, Abu Dhabi Mohammed bin Zayed Al Nahyan, for his part came bearing gifts to the tune of one billion dollars to be deposited at the National Bank of Ethiopia and another two billion dollars for investments. Italy and the UAE, or the United States and China, have varying geopolitical interests in the Horn of Africa, but it is hard to gloss over who has come to mean more for developing nations.

Nonetheless, Europeans still have interests, and Ethiopia still needs cash. This was no less evident during the Prime Minister's first state visit to Europe, which yielded fruits. Abiy, while holding a press conference with President Emmanuel Macron in Paris, mentioned the agreements reached with France, none of which should be seen lightly regarding their importance to the nation.

The agreement was to support the restoration of the rock-hewn churches of Lalibela, improve capacity building of the military, 100 million Euros for infrastructure in airports and even a possible direct budgetary support to the annual federal budget from the French government.

All of these are necessary supports the Ethiopian government requires. The economy has not had a great couple of years lately. Domestic revenue mobilisation has not increased to the level that it should, mostly because the nation has been starved of a vibrant private sector from which revenue can be mobilised.

The most disappointing though has been export performance, despite the massive investments by the government to attract foreign direct investment and improve infrastructure. Ongoing unrest has not helped either.

Thus, support from France, the UAE and Italy are indeed coming at a time when the nation most needs it. There are of course bound to be consequences. Few nations give away this much taxpayer money or revenue from oil resources out of the goodness of their hearts.

And every leader and government in modern Ethiopia has been well aware of what the consequences could be. It cannot be said that outside factors solely influence the direction of African politics. But it does not take much deeper reading to have an idea of how the Cold War, rivalry between the United States and China and Middle Eastern powers interest in the Horn has affected African nation's economy and policies.

Unfortunately, nations in dire need of resources cannot be choosers. This is a sad reality Africans, especially in the sub-Saharan region, have had to make peace with for the time being. Optimism is great but to assume that Ethiopia - or any other country in the Horn for that matter - could at this moment significantly mould Horn geopolitics without being substantially affected politically and economically in return is a little farfetched.

We are too poor and internally fragmented to be of any significance on the world stage. If poverty and political instability do persist for long, we may not even have a say over what happens in our own country.

It does not have to be like that for long though. Aid, loans and skills have been pouring into sub-Saharan Africa for the last half century but with nothing to show for it. This is because resources are either misused or funneled away to enrich the few, while the other few that acquired skills are immigrating for better economic opportunities or in fear of prosecution.

We continue to need Middle Eastern, European, North American or Chinese support, because we have been unable to put to good use domestic resources while also wasting a great deal of the aid, loans and skill transfers we have received. This will continue in a vicious cycle unless it is broken.

The missing key has been political and economic institutions inclusive enough to encourage innovation, efficiently allocate resources and reward merit. Indeed, let us take the money now, but let us take care that we can use it appropriately enough that we do not need more support later.

Christian Tesfaye (Christian.tesfaye@addisfortune.net) Is Fortune's Op-ED Editor Whose Interests Run Amok in the Directions of Both Print and Audiovisual Storytelling.

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