September 26, 2022

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A bleak new year in Ethiopia, between renewed conflict and accelerating inflation

Resumption of conflict in the north, historical drought and persistent inflation: Ethiopians had little to celebrate on Sunday, marking the transition into the new year.

At a cattle market in the capital Addis Ababa, the multiple crises facing Africa’s second most populous country were on everyone’s lips.

“As you can see now, everything is very expensive. If there is peace, it will not be like this,” trader Indashio Denikio told AFP on Saturday on the eve of the Ethiopian New Year celebrations, known as Inkutatash. “People stayed home and did not come to the market. to sell their livestock.

Fighting resumed last month between Prime Minister Abiy Ahmed’s army and Tigray Liberation Front rebels, violating a five-month truce that had raised hopes for a peaceful solution to their nearly two-year war.

This new escalation in addition to the current economic context is “extremely concerning,” the World Bank emphasized in a pessimistic report on Ethiopia published on September 8.

“Multiple conflicts coupled with historical drought and other shocks have severely affected millions of Ethiopians, jeopardizing the progress in economic and social development that the country has made in recent years,” the minister added.

In early September, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) described the humanitarian situation in Ethiopia as “catastrophic”, with 20 million people in need of assistance.

– Not the usual crowd –

With a population of 115 million, Ethiopia has experienced one of the fastest growth rates in the world over the past 15 years, according to the World Bank, but like many it has been hit hard by the coronavirus pandemic. The war in Ukraine.

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Inflation in July reached 33.5%, according to official figures, and 35.5% for foodstuffs, an increase that discourages people from spending.

“There are no usual crowds in the market during holidays,” official Tshombe Gebrihana told AFP near the capital’s main open market.

Inflation had its effect. If people had enough money in their hands (…), we would not see very little presence.”

In a recent interview with the state-run Ethiopian News Agency, Mamo Mehrito, Abiy Ahmed’s political advisor, emphasized that the government is doing its best to mitigate the impact of price hikes.

“Our efforts are paying off as inflation stabilizes, if not completely contained,” said Mihrito, who also heads the country’s sovereign wealth fund.

– ‘A very difficult situation’ –

He added that the government is working on reforms to encourage investment and trade, and expects economic growth of 6% this year.

The resumption of hostilities in the north also worries the international community, which is intensifying diplomatic efforts to try to end the violence.

“I hope the parties to the conflict will have the courage to choose talks over combat, and engage in an African Union-led process that produces lasting peace,” said US envoy to the Horn of Africa, Mike Hammer, in the new year. A message to the Ethiopians.

Meanwhile, at the Addis cattle market, few customers can afford to cook a festive meal. They also lament the ongoing war, hundreds of kilometers from their homes.

I was buying (a sheep) between 4,000 and 5,000 birr ($75 to $95 at the current exchange rate). But today it is 15,000 birr (about $285). Some have less income, and they are no longer able to afford it (…), the current situation is very difficult, “confirms to AFP Asifa Alemu, a metalworker.

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“I think if peace returns to the country, prices will come down.”