The new government cancels contracts with its influential military-industrial conglomerate in the agriculture and manufacturing sectors, and now seeks fresh foreign investment to develop stalled economic projects.
The success of the Ethiopian political transition will depend on the new government’s ability to seek compromise between established business and security interests and mounting calls for broad political and economic reform.
The Tigray-dominated military Command Post will remain in charge of Ethiopia’s government at least in the three-month outlook, which mitigates the threat of contract alteration but risks stoking further ethnic violence.
The leadership transition may face some delay due to disputes within the governing ethno-political coalition, which raises the prospect of fresh unrest despite the imposition of a state of emergency.
The politically dominant Tigray kingmakers are expected to endorse a senior Oromo as Ethiopia’s next prime minister over the next week, which would mitigate unrest risks but raise risk of contract frustration and corruption probes.
A shift in the balance of political power towards the ethnic Oromo group will be contested by Ethiopia’s Tigray elite, yet would mitigate unrest while exacerbating risk of politically-motivated corruption probes and contract alteration of foreign investments.
Despite Eritrea’s new position of political, diplomatic, and military clout, its political system remains vulnerable to internal threats, while its destabilisation of the region makes it vulnerable to outside attack or covert interference.
Oromo political leaders are capitalising on widespread ethnic unrest at the expense of the Tigray elite in order to seek a shift in political power within the federal coalition and greater autonomy over investment opportunities in Oromia.
The legitimacy of the governing ethnic coalition is weakening as the government fails to meet economic development goals, while its constituent parties blame each other for the ongoing violence cross the country.
The year 2018 is unlikely to herald the start of a new African debt crisis, but it will augur an end to the boon of high-yielding African debt, as governments continue to increase their debt and to postpone its repayment through refinance. EXX Africa assesses the implications in its latest special report.
- EXX Africa director Robert Besseling moderated a panel on Africa’s commodity rollercoaster at GTR Commodities in Geneva hosted by Global Trade Review (GTR)
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