Ethiopia is an emerging economy and the Horn of Africa’s power hub. But in spite of its considerable potential, it also has to face significant challenges to its rise. Depending on how it copes with them, Ethiopia could either become a leader of African progress or another fragmented state torn by conflict.
Ethiopia is a rather large country located in the Horn of Africa region. It extends for 1.13 million square kilometres and its territory is largely made of highlands and plateaus that occupy its central-western part. The capital, Addis Ababa, lies at the centre of Ethiopia in the heart of its highlands. The mountain ranges are separated by the Great Rift Valley, which runs from the south-west to the north east. Yet, there are also some plains. To the north, the Danakil Depression runs along the eastern part of the border with Eritrea. To the south-east, the land descends into the arid Somalian plateau and the Ogaden desert that mark the border with Somalia. This difficult terrain configuration complicates transport and communication in Ethiopia. However, the greatest geographic challenge for Ethiopia is its position.
First, it is a landlocked country, and this hinders its economic development. Ethiopia can of course reach the sea via its northern and eastern neighbours, but this is not an easy solution. To the east, Somalia is a failed state torn by fragmentation, poverty and conflict. Northwards, a war was fought with Eritrean over a territorial dispute, and years of tense relations have denied Ethiopia the access to the Red Sea. Only a recent agreement has reopened the border, thus paving the way to better ties. However, there are doubts over the tenure of the deal, as the border has been closed again by Eritrean authorities in April. As such, Djibouti has been Ethiopia’s only access to the sea for a long time; to the point that its ports handle 95% of Ethiopia’s foreign trade. to secure its access to the sea the Ethiopian government acquired stakes in Djibouti’s ports and built a railway connecting the two countries. Yet, there is strong foreign competition in Djibouti, as many other states are present in economic and even military terms: the country hosts US, Chinese, Japanese and French forces.
Another problem related to Ethiopia’s position is that it is surrounded by fragile neighbours. Somalia is the most prominent case; but even Eritrea and Djibouti do not perform well in terms of stability, especially the former. The state of affairs to the west is also complicated. Sudan and South Sudan are two other weak states where armed conflict is common, notably in the latter’s case. The situation is better only to the south, where Kenya enjoys relative peace and prosperity. Such instability from its fragile neighbours could spill over to Ethiopia; also because it is socially-fragmented state itself.
Demography and society
Ethiopia’s growing population counts around 109 million people, most of whom are young; and is divided along ethnic and religious lines. In regards to the latter, 43.5% of the population was Ethiopian Orthodox in 2007; while 34% were Muslims and 18.5% Protestants. Other minor faiths were also present. But the most significant differences are ethnic-related. The most important groups are the Oromo and Amhara, representing respectively 34.4% and 27% of the total. These are followed by the Somalis and the Tigray, who both count for a bit more than 6%; and many more groups also exist. This ethnic fragmentation is a cause of tensions in Ethiopian politics. As a matter of fact, the Oromo and Amhara, in spite of being the majoritarian groups, are politically and economically marginalized. By contrast, the Tigray minority holds much wealth and power. It dominates the ruling government coalition, called the Ethiopian People’s Revolutionary Democratic Front; and this creates resentment among the other larger groups. Contrasts between them is a prominent feature in current Ethiopian politics, as the recent events demonstrate. An army officer belonging to the Amhara attempted a coup in the north. He was known for his ethnic nationalism, demanding greater autonomy and even calling the Amharas to take up arms. The coup failed and he was killed. Two officers who opposed him also lost their lives. They belonged to the Tigrays, many of whom blame the government for the death of the two officers even though incumbent Prime Minister Abiy Ahmed mourned them. He is of mixed Oromo and Amhara ancestry, but is politically affiliated with the Oromos. This shows the complexity of Ethiopia’s political life and the tensions existing within its society. Yet, the country must also cope with other issues.
Ethiopia’s economic conditions
Like many emerging countries, Ethiopia is in the middle of a transition phase. It experienced double-digit growth for most of the 2000s and in 2018 its GDP grew of 7.7% in real terms, reaching more than 84 billion dollars. Income inequality is low, but unfortunately this is because large swathes of its population live in poverty. In 2014 almost 30% of the population lived below the poverty line. Agriculture remains a central economic sector, representing almost 35% of the GDP and absorbing close to 73% of the workforce. Inflation is high, reaching almost 10%. The government runs a deficit of more than 3% of the GDP, but the public debt is currently relatively low at 54% of the economy’s size. In terms of trade, Ethiopia experiences a negative balance of around 6 billion dollars. Its main export destinations are European countries, but also China and the US; while its import comes primarily from China and Europe, with India being another important partner.
This indicates that the status of Ethiopia’s economy is mixed. Its industrialization process is still in the early stages, and it does not enjoy the positive trade balance that allow other emerging countries to develop. Its economy is growing fast, but at the moment many people still live in poverty and their living conditions remain difficult. Droughts and livestock mortality can result into famine, and poor sanitary conditions favour the spread of disease. These problems could be further exacerbated by climate change, whose effects will be particularly marked in the Horn of Africa. According to estimates, Ethiopia’s GDP will be reduced of up to 10% due to climate change by 2045. Water scarcity will become more common as the region gets warmer, thus damaging crops and livestock. Pests and diseases will also spread. As a consequence, Ethiopia’s food security will be severely threatened; together with the health of its people. The effects of climate change are already visible. A recent USAID report shows that in 2016 Ethiopia was struck by the worst drought in 50 years. Around 8.5 million people requested emergency food assistance for a total value of 1.4 billion dollars. Ethiopia hosted 730,000 refugees from neighbouring countries in 2017 plus 1.3 million internally displaced persons (IDP), many of whom belong to the Somali minority. More than half of them had fled the conflict in the Oromia and Somali regions, which are those that are projected to suffer the most from climate change. In other terms, food insecurity is already sparking conflict, and the situation will probably worsen in the coming years; also because of the population growth. In a country marked by ethnic tension, this could further exacerbate conflict with destabilizing effects for a region that already experiences significant turmoil.
Ethiopia’s role in the Horn of Africa
The Horn of Africa is located on the important Bab el-Mandeb Strait which connects the Indian Ocean to the Red Sea. Along with Suez, it is the crossroad for trade between Europe and Asia, meaning it is one of the economically most relevant chokepoints in the world. Maritime trade in the area is threatened by pirates operating from Somalia. Piracy is itself a complex issue strictly linked to the poor conditions of that state, and it triggered a multinational patrol operation to ensure the safety of cargo ships. In addition, the region is also a hub for armed groups, notably the Islamists Al-Shabab based in Somalia. They perform terrorist attacks inside the country and across the borders, and are considered a regional threat. Piracy and armed factions are the factors explaining the presence of foreign military forces in Djibouti. It is therefore important to keep Ethiopia stable: if such a populous country became a failed state, an already troublesome region would become even more unstable; and this would also increase the flow of migrants towards Europe.
But there are also other issues. The source of many of the region’s rivers is located in the Ethiopian highlands. Among them, the most important is surely the Blue Nile, which joins the White Nile in Sudan to form the Nile proper. Any activity that Ethiopia conducts on the river’s course would have deep consequences on the downstream states. Egypt is particularly concerned: it depends on the Nile, and the waterflow along the river is a major point of contention between the two countries, especially since Ethiopia began building the Grand Renaissance Dam in 2011. As such it is possible that conflicts over water will arise as the region becomes more arid.
Finally, Ethiopia is an ambitious geopolitical actor. It wants to become the main power in the Horn of Africa and expands its influence beyond the region. Even though it is a landlocked country, last year it announced plans to build a navy; but the move is not regarded as credible. Most importantly, Ethiopia’s ability to play a greater international role depends on its success in tackling the numerous challenges it is facing; notably poverty, climate change and regional instability. This will not be easy, and Ethiopia must be careful not to aim too high if it wants to avoid becoming another failed state.