The EU renews financial aid to Ethiopia

Nearly three years after the EU suspended direct financial aid to Ethiopia, the European Union (EU) has now committed to providing the East African country with assistance valued at 650 million euros, marking a significant shift in policy.

The announcement was made by EU Commissioner for International Partnerships, Jutta Urpilainen during a press conference held in Addis Ababa, Ethiopia’s capital, where she was joined by Ethiopian Finance Minister Ahmed Shide. Urpilainen emphasized the significance of step-by-step reestablishment of diplomatic ties and the formation of a cooperative alliance with Ethiopia. She referred to this aid package as the “first tangible move” in this direction, following the conclusion of hostilities that brought an end to the conflict in the previous November.

The initial EU aid package had amounted to $1.04 billion and had been scheduled to be disbursed to Ethiopia between 2021 and 2027. However, it was paused in late 2020 following the outbreak of conflict in the northern Tigray region. The United States also suspended its assistance programs and imposed legislative measures, including sanctions, removing preferential trade agreements, such as the Africa Growth and Opportunity Act (AGOA), which had allowed Ethiopia to export duty free products to the U.S.

According to Finance Minister Ahmed Shide, “financial assistance would play a pivotal role in enhancing Ethiopia’s recovery in the aftermath of the war and in supporting essential economic reforms”. He stated, “The strategic collaboration is now moving forward once more.” This is a normalization long sought by Ethiopia’s government which had been under intense international pressure in recent years due to ongoing conflicts in the country.

The conflict in Tigray resulted in an unknown number of casualties, with all sides accused of atrocities. The EU had warned it would not normalize relations with Ethiopia until there was a reckoning for these atrocities. While there has been some progress in establishing an internal mechanism for justice and accountability, there is still ongoing conflict hotspot in the Amhara as well as the Oromo regions.

Urpilainen clarified that direct financial support to the Ethiopian government’s budget remains suspended and will only be reinstated when “extremely transparent political prerequisites” are met, though she did not specify what these conditions were in her press conference. On a more positive note, she emphasized the need for an International Monetary Fund financing for reconstruction and stabilization of Ethiopia, a strategic country in the Horn of Africa.

Earlier today, Urpilainen also held meetings with Ethiopian Prime Minister Abiy Ahmed and Moussa Faki Mahamat, the Chairman of the African Union Commission, where she was expected to bring up efforts by the United Nations Human Rights Experts to investigate “crimes against humanity” committed during the two-year war with rebels of the Tigray People’s Liberation Front.

While Ethiopia has initiated its own post war transitional justice process, Western human rights organizations have criticized the mechanism as flawed. The UN’s own International Commission of Human Rights Experts on Ethiopia (ICHREE) has reported that all sides in the conflict have committed abuses, some of which may amount to war crimes. Ethiopian authorities argue these reports ‘are politicized and tainted by a remotely sourced and manipulated data’.

This latest EU financial recommitment to Ethiopia coincides with the deadline for the renewal of the ICHREE mandate to investigate rights violations in connection to the recently concluded war in the Tigray region. Many have interpreted this to mean the end of ICHREE, as the EU had been a key supporter of the initiative. But the EU has treaded slowly, allowing payments to go through in tranches over the next three years.

On the same day as the EU announcement to provide financial assistance to Ethiopia, the U.N. human rights experts cautioned that due to the “overwhelming risk of future atrocities, additional independent investigations into Ethiopia’s human rights situation were imperative.” Steven Ratner, one of the United Nations experts, emphasized the pressing and immediate concern that the situation could deteriorate further, and the international community must ensure that investigations persist, enabling the addressing of human rights violations and the prevention of the most severe tragedies.

There seems to be reluctance by EU countries to pursue the ICHREE mandate due to improved relations with Addis Ababa recently. Moreover, the human rights investigation itself has been fraught with opposition among African states, as well as other important members states of the UN human rights council. ICHREE accusation of all actors in Ethiopia inherently muddies the accountability process, considering conflict continues to persist in areas of Amhara and Oromo.

When you add in fast evolving geopolitical circumstances in the Horn of Africa, most EU countries seem to be recalibrating their approach on Ethiopia to a more cooperative framework. One Ethiopian diplomate who was recently involved in the recent UN general assembly sated, “we hope to be entering a phrase of normalization-plus as far as our engagement with the EU”. Ethiopia is slated to officially enter the BRICS alliance in January, a move that has allowed Addis Ababa to pivot slightly in the face of Western pressure. It seems to have influenced the EU’s calculation.