During the event, Governor Mamo addressed concerns from the Ethiopian diaspora regarding the floating exchange rate of the Birr and the significant regulatory changes underway. He noted real progress towards convergence between the parallel exchange rate and the newly established market-based bank exchange rate over the past two months, a natural result of the free exchange rate system.

Concerns about rampant inflation and a drastic depreciation of the Birr have diminished, with the governor asserting, “such a scenario was highly unlikely due to a monetary policy that’s periodically reviewed and adjusted according to market conditions.” He emphasized that measures have been taken to mitigate inflationary pressures and currency depreciation.

The shift to a free-floating currency has bolstered the export sector and increased remittances, with Dashen Bank reporting a staggering 300% year-over-year rise in dollar remittances in its third-quarter report. Despite the increased availability of foreign exchange in the banking sector however, bankers contend that importers have shied away, relying on their customary and informal means to access hard currency. “This could be a case of old habits die hard, but I believe it is more likely to be a problem of being misinformed about recent changes—we as banker certainly need to do more to clear up the confusion, said Abe Sano, CEO of state owned, Commercial Bank of Ethiopia, the country’s largest. 

Historically, many people in Ethiopia depended on traditional savings and loans schemes, mostly based on small knit circles of friends and family. Modern banking, although more than 120-year-old in the country, only started to make inroads just in the last few decades. For this reason, many remained unbanked up until very recently. This traditional way of thinking about money and credit is baked into the culture. This means relationships, be they familial or communal are still strong in business. These are not as easy to reform of to modernize. For this reason, a parallel market for foreign currency exchange will likely remain. But the price gap will converge as institutional trust grows. Combined with other incentives provided by licensed financial entities, the legal route for exchanging foreign currency should become more attractive. NBE Governor Mamo reiterated, “our ultimate goal is to instill trust in our banking institutions by building the right incentive mechanism for a healthy financial architecture, one that centers economic development and growth”. 

In a bid to enhance transparency and competitiveness, the NBE recently implemented a 2% cap on bank fees for foreign exchange transactions. However, questions linger about potential collusion among major banks in setting similar pricing for dollars and euros, as the price gap between buying and selling rates remains substantial. To further diversify the market, the NBE has licensed five new Independent Foreign Exchange Bureaus, including Dugda Fidelity Investment PLC and Global Independent Foreign Exchange Bureau.

While the Ethiopian banking sector shows signs of recovery, with restructured debt and improved capital adequacy, loan portfolios remain constrained, primarily serving a limited clientele. Governor Mamo pointed to the success of microfinance as a model for broader lending, suggesting that larger banks need to adopt similar strategies to reach a wider public. New fintech players, such as Ethio-Telecom’s TeleBirr, are poised to outpace traditional banks in attracting borrowers.

Ethiopia is also considering the entry of foreign retail banks into its previously closed market, a move that could disrupt the landscape for domestic banks that have historically faced little competition due to stringent regulations. “The layers of strict regulation meant there was little incentive to innovate for banks,” Governor Mamo noted. Dashen Bank’s CEO Asfaw Alemu said “Stringent regulation meant there was little you can do to fail as a bank in Ethiopia—you were always parented by the state”. Indeed, bank failure is very rare in Ethiopia, not because the banks are good, but rather because of moral hazard. The recent reforms aim to reduce bureaucratic obstacles and enhance the overall banking environment, though many local banks may struggle to compete against foreign entrants without adequate capitalization.

Legislation is on the horizon to encourage bank mergers, aiming to centralize capital and strengthen the sector in anticipation of increased competition. Pooling resources will be a matter of survival even for the biggest of the current institutions. As Ethiopia navigates these transformative changes, the future of its banks is poised for historic evolution, one that is long overdue. 

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On New Year’s Day Ethiopia and Somaliland announced a Memorandum of Understanding (MoU). The specifics of the agreement are not fully disclosed, but the key points involve Somaliland obtaining a share in Ethiopian Airlines, Africa’s prized airline. In return, Ethiopia gains entry to the port of Berbera and secures land (with a 20km coastline) near the town of Lughaya for a naval base along the Gulf of Aden. There is a strong possibility that Ethiopia will ultimately acknowledge Somaliland as an independent sovereign state.

Somaliland gained its independence from Britain on June 26, 1960, was then recognized as such by 34 countries, including the U.K. Five days later, amid excitement and nationalist fervor, it proceeded to voluntarily merge with former Italian colony of Somalia on July 1, 1960. It would turn out to be fateful decision. As the smaller of the two in terms of population, Somaliland quickly found itself receiving dictates from Mogadishu, the capital of Somalia. The following 31 year of union were a dark period of tumult, eventually culminating in full blown war, whereby Somalia desperately tried to cling to Somaliland, causing tremendous suffering and scorn.

According to a recent article by Georgetown University Professor Ken Opalo “The unification and subsequent separation of Somaliland with Somalia has some similarity with that of Eritrea, which also peacefully entered union with Ethiopia in 1952. Somaliland also willingly entered union with the rest of Somalia in 1960, only to witness the violation of the terms of union shortly thereafter. Like Eritrea, Somaliland also leveraged a widespread civil war to claim its independence under circumstances that made it too challenging for the war-fatigued capital to resist. The key distinction lies in the fact that while Eritrea had a consenting government in Addis Ababa to facilitate its secession, the neo-founders of Somaliland in the late 1980s lacked a credible counterpart among the various warlords who battled the Siyad Barre regime and subsequently turned against each other after 1991.”

The eventual dissolution Somaliland’s union with Somalia could not be ratified by Mogadishu, which has been marred in a long saga of bad governance, corruption, and terrorism. However, neither was Somaliland’s brief union with Somalia ratified by their respective law makers. In any case given the root causes of the breakup that followed ratification matters less. Somalilanders have long emphasized their separate status from rump state Somalia. Their state is relatively calm, holding regular elections, issues a passport accepted in several countries, including the U.K, South Africa, Ethiopia, Saudi Arabia, France, Malaysia. Its close tie with neighboring Ethiopia has been a process spanning decades.

Notwithstanding Somaliland’s distinct history, revelation of the MoU ignited a diplomatic uproar by authorities in Somalia, which expressed intense displeasure and withdrew the ambassador from Addis Ababa. So far, a series of statements and declarations out of Mogadishu have not garnered an official response from Addis Ababa, although Somaliland called them “insincere” and “hysterical”.

With a GDP of nearly US$3.5 billion and a population of 5.7 million, Hargeisa stands to benefit significantly from a long-term economic deal centered around ports and logistics. In addition to the prospect of obtaining official recognition from Ethiopia, Somaliland is pursuing the port agreement for economic necessities. Nearly half of the government’s budget relies on revenue from trade taxes and port duties. However, it is expected that there will be opposition within the country to the deal, particularly on the domestic political front.

A Significant Move by Ethiopia

Ethiopia’s decision to eventually recognize Somaliland carries notable significance as it marks the first instance of a UN member state acknowledging Somaliland’s autonomous status since its self-proclaimed independence in May 1991, following the Somalia Civil War.

Despite establishing official contacts after declaring independence, including engagements with Ethiopia in strategic and infrastructural agreements, Somaliland’s international recognition has been constrained. Recognition by Ethiopia’s could enhance Somaliland’s legitimacy, foster economic cooperation, and establish diplomatic ties. Given its strategic location, if Somaliland garners recognition by a UN member state, the ripple effect might encourage other nations to follow suit, contributing to a broader acknowledgment of Somaliland’s sovereignty, albeit the extent of this impact hinges on the nature and scope of Ethiopia’s recognition.

In addition to Ethiopia, Somaliland has consulates services in key countries, including the United States, United Arab Emirates, United Kingdom, Kenya. If Ethiopia proceeds to fully recognize its neighbor as an independent state, then these other nations are likely to follow suite, an outcome that will tip the scale as far as the AU’s decision goes. For instance, the U.S has shown interest in Somaliland for military purposes. While the State Department’s rhetoric has been strategically ambiguous regarding Somaliland, overcrowding of military bases in Djibouti has become an issue for the Pentagon, “raising concerns about “strategic competition and potential risk of confrontation with China in Djibouti” and is exploring the viability of Somaliland as an alternative relocation point.

However, an underlying complexity lies in Somaliland’s lack of Mother State Permission from Somalia. This adds diplomatic controversy surrounding the principle of sovereignty, for the AU, which must contend with numerous claims for statehood across the continent. The AU does not want to be  seen to be encouraging balkanization of Africa, but the legal case for Somaliland is strong, a point discussed below.

President Mussa Bihi Abdi stated, “We functioned independently as Somaliland for three decades, despite the odds, but never got the recognition we deserved—We just needed one country to open that door, and its suiting for Ethiopia to be that nation”. He added, “The first to recognize Somaliland was always going to be the most difficult, after that there will certainly be others that follow”.

On January 6th, Somalia’s president Hassan Sheik Mohamud signed a law nullifying the MoU between the Gov’t of Ethiopia & Somaliland as illegal and void on grounds of protecting sovereignty and territorial integrity. But how Mogadishu intends to enforce this claim is not clear. As mentioned, Somaliland has been its own entity for thirty years and authorities in Somalia have had no say in that time. This power equation is unlikely to change anytime soon.

Ethiopian troops have been crucial to Somalia’s security. As part of The African Union Transition Mission in Somalia (ATMIS) They played a key role in defending against Al Shabab for years. It currently contributes about 5000 troops to the ATMIS.  Before the formation of ATMIS, Ethiopia was the leading country behind The African Union Mission in Somalia (AMISOM). Outside of this multilateral effort, Ethiopia also commands a significant force combating Al Shabab in Somalia. According to a 2020 Reuters report, “Ethiopia, which shares a long and porous border with Somalia, contributes around 4,000 of the 17,000 troops under the AU, and has around 15,000 additional soldiers in Somalia bilaterally: that is more than any other nation.”

The task of ATMIS slated to end in 2023 was extended at the request of Mogadishu, which needed the protection against increasing attacks by Al Shabab. Ethiopian National Defense Forces (ENDF) have overseen the most difficult sectors of Somalia, where Al Shabab has the strongest presence. These areas include sector 3, Bakool and Bay centered on the town of Baidoa. The withdrawal of these forces now scheduled for December 2024 could leave a security vacuum, in which Al Shabab will certainly take advantage of.

Now what?

On January 8, 2024, to shore up support, President Hassan Sheik Mohamud of Somalia traveled to Eritrea, where Somalian soldiers recently trained. He is also slated to travel to Egypt this week. This follows an earlier visit to Somalia by an Egyptian delegation. Furthermore, Somalia is seeking support from Qatar as well as the Arab league, of which it is a member state. Simultaneously military commanders of Somaliland and Ethiopia convened in Addis Ababa this week.

While most Somalilander’s look forward to the day where their country’s independence becomes officially recognized by the international community, there is some pushback to Ethiopia setting up a navy base in their territory, including by some of its officials. This month AP reported, “Somaliland’s defense minister resigns over deal to give Ethiopia access to the region’s coastline. The issue will certainly be hotly debated in the upcoming elections scheduled for November.

As the 2018 rapprochement between Eritrea and Ethiopia continues to fade, a new reality seems to be emerging in the Horn of Africa (HOA), one where Asmara and Addis Ababa become estranged again, Somaliland gains its vaunted recognition, and Sudan fractures into spheres of influence. While Ethiopia continues to grapple with insecurity. Never in recent memory has there been this level of tumult and geopolitical realignment in the strategic HOA.

It remains to be seen if Ethiopia will proceed to lobby AU member states on behalf of Somaliland at the upcoming 37^th regular session. There is a good case to be made based on a 2005 fact finding mission led by former deputy chairperson of the AU, which concluded, “Union between Somalia and Somaliland was never ratified and malfunctioned from 1960 to 1990, making Somaliland’s search for recognition historically unique and self-justified in African Political History.” The report adds by saying, “Objectively viewed, the case should not be linked to the notion of opening a pandora’s box, and as such the AU should find a special method of dealing with this outstanding case.”

As far as Ethiopian authorities are concerned their bid to diversify, and gain control of a seashore is more critical than ever. This fact became crystal clear in the past few years, whereby logistical bottlenecks and sabotage on country’s maritime trade became more frequent. For example, turbines imported for the Grand Ethiopian Renascence Dam were routinely held up throughout the past three years. Sensitive imports such as military equipment was frequency held in Djibouti, which as mentioned is brimming with foreign military bases.

For Somaliland, it is once in a generation opportunity to seal their nation’s fate among nations. It is also a means to economic revival. In that sense, the MoU is a masterstroke in diplomacy.

The delay in achieving full state recognition and UN membership for Somaliland has multifaceted impacts, restricting its diplomatic outreach and hindering its legitimacy on international political and developmental platforms, including within the UN itself. Despite these challenges, Ethiopia’s recognition represents a significant step in Somaliland’s prolonged pursuit of official statehood and a prominent role on the global stage. It could be a harbinger for an international acknowledgment of Somaliland’s de jure independent status.

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Ethiopia’s recent selective debt default, marked by the non-payment of a coupon on a Eurobond first issued in 2014, underscores contrast with the approach of Chinese lender to debt relief. While Ethiopia faces challenges with Western creditors and is labeled with a “selective default” by S&P Global Ratings, China has demonstrated a proactive stance by pausing debt repayment, thus fostering a more cooperative relationship with Ethiopia.

China’s approach involves temporarily halting or restructuring debt payments, providing breathing room for countries facing financial difficulties. This contrasts with the more rigid response from Western creditors in the face of defaults across the developing world reeling from high interest rates following pandemic shocks. Overall inflexibility towards debt restructuring may lead to increased financial strain and even strained diplomatic relations in the long run.

The proactive debt-service relief from China not only showcases a willingness to work collaboratively with debtor nations in Africa, but also contributes to strengthening diplomatic ties. This approach has been particularly beneficial for Ethiopia-China relations, as it reflects a commitment to understanding and addressing the economic challenges faced by Ethiopia, fostering a more constructive and supportive partnership. In his recent speech in Addis Ababa, American economist Jeffery Sachs praised the patient approach when financing development, stating, “repayment horizons should be thirty to fifty years, not ten or fifteen.”

China, itself a developing nation not too long ago is better able to understand challenging circumstances of investment in Africa, thus takes on a long-term and patient approach. This is one of several reasons why Chinese financed projects on the continent are increasingly preferred. Despite accusations predatory lending, China has pardoned a minimum of $3.4 billion in debt from 2000 to 2019, primarily consisting of interest-free loans to African nations, according to the China Africa Research Initiative (CARI) at Johns Hopkins University.

Moreover, as of 2022, China has granted debt forgiveness for 23 interest-free loans across 23 countries. On the contrary, the proclivity of European or in general Western lenders to be fixated on unrealistic repayment schedules is a determent to both creditors institutions, and debtor countries in Africa.

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These challenges come amidst a backdrop of heightened economic strain, occurring a year after the Government of Ethiopia (GoE) and forces from the insurgent northern Tigray region reached a truce to conclude a two-year civil conflict.

Escalation of security concerns stemming from localized regional conflicts has the potential to exacerbate economic upheavals and undermine global backing. Elevated costs of vital imports, driven by significant currency depreciation and subsidy reductions, pose a risk to social stability. Nonetheless, the International Monetary Fund (IMF) believes Implementing more stringent macroeconomic measures is imperative, although such actions will likely be destabilizing in the short-term and face public opposition. The GoE prefers for these measure to be implemented gradually.

The Eurobond payment originally due in in December 2024 is on the largest debt payments the country faces. The other big payment is one due to Chinese creditors, who recently provided a payment relief period of 12 months.

The East African nation formally sought a pause in debt-service obligations as part of its ongoing program consultations with the IMF and concurrent negotiations for debt restructuring with official bilateral creditors within the framework established by the G20. The finance ministry, in a released statement, indicated that the agreed-upon interim debt-service suspension is designed to afford the country a suitable reprieve during the years 2023 and 2024. The terms for the redemption of the suspended amount have been structured to optimize relief on debt servicing throughout the anticipated years of the IMF program, strategically avoiding a concentration of maturity dates following the program period.

According to a Reuter’s report citing the country’s Ministry of Finance, “The exigencies prompting an interim debt service relief from the Official Creditors Committee (OCC) concurrently affect the nation’s capacity to meet obligations on other external debts, encompassing the Eurobond.”

In August, Ethiopian authorities disclosed that China, a co-chair of its official creditors committee, had granted permission for the suspension of debt payments through the fiscal year concluding on July 7, 2024. Subsequently, in October, an official from the International Monetary Fund (IMF) conveyed that Ethiopia was pursuing a comparable arrangement with other creditors.

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Introduction

In a recently televised meeting with members of Ethiopia’s parliament, Prime Minister Abiy Ahmed emphasized, “the critical importance of the nation’s access to the sea”. This statement follows weeks, if not months of speculation and rumor that Addis Ababa was actively seeking port ownership by courting neighboring states of Eritrea, and the de facto state Somaliland.

Observers interpreted Prime Minister’s comments as provocation towards Eritrea, with whom he famously fostered a historic reconciliation, for which he was awarded the Nobel Peace Prize in 2019. The speech, or rather lecture delivered to members of parliament was largely interpreted as irredentist by surrounding countries. While ruling out the use of force or coercion in achieving this goal may provide some ease, his distaste for the status quo was visible. Abiy added by saying, “the current phase of being landlocked is not tenable for the long run — and could spark tensions and even conflict as the country continues to grow in population and economy”.

While Ethiopia has long sought reliable port access, or preferably ownership, the topic remained subdued for long periods. Several factors seemed to drive this issue to the forefront at this juncture.

In the absence of comprehensive financial relief, the country’s debt overhang, which has been rapidly accumulated since 2005, is straining its ability to pay port services provided by neighboring Djibouti, which according to Abdulber Shemsu, the Director General of the Ethiopian Maritime Authority, “handles most inbound and outbound trade from Ethiopia, raking in $1.6 billion in port fees annually”. This payment largely shouldered by importers and exporters is primarily made in dollars or euros. The state of Djibouti has pushed against claims that it charges excessive fees.

Red Star, a company engaged in importing and assembling tuk-tuk vehicles in Dire Dawa is just one of many businesses affected. Management laments work has slowed due to limited access to foreign currency. “We spend a lot of time procuring the necessary exchange needed for imports and also incur substantial expenses in import service fees”, said one executive. Many businesses also complain about storage fees and transit time capacity at the port of Djibouti. The Red Star manager further emphasized, “While the government has exempted import taxes on assembly part for vehicle and machinery, it’s still not enough”.

The government has long sought to prioritize key imports only, and maximize exports, drawing in foreign exchange, but Ethiopia continues to run a significant trade deficit. As of 2021 this imbalance was approximately negative $10 billion. Although declining recently, economists agree this number will not improve systemically without successful structural economic reforms to improve the quality and quantity of exportable commodities. In addition, challenges in governance, logistics, and infrastructure need improvement. The main exports include gold, coffee, live animals, and oilseeds. Conversely, Ethiopia heavily relies on imports for fuel, fertilizer, pharmaceuticals, and textile apparel.

The country’s negative trade was sustainable when readily accessible, low-interest multilateral debt financing was relatively easier to get. The situation now is different. Not only have interest rates risen substantially, but global crises, domestic instability, and structural adjustment demands have restricted credit from the likes of the IMF. Cutting costs has thus become a necessity This period of austerity includes costs associated with services at the port of Djibouti.

The port of Assab and turmoil in Ethiopia

Addis Ababa has been trying to diversify the country’s access to ports for at least a decade. In doing so it hoped to cut costs, but it also wanted ownership. Underutilized ports of Assab in Eritrea and Berbera in Somaliland both have obvious appeal. Cooperation on the Port of Assab had a promising start in 2018, when roadwork connecting the port to Ethiopia began. At that time, influential constituencies within Ethiopia, such as the Tigray People’s Liberation Front(TPLF) remained deeply suspicious of closer ties between Asmara and Addis Ababa.

This, in no small part contributed to the TPLF’s calculation in igniting what became commonly referred to as the “Tigray War” on November 4, 2020. Notably, the United States shared similar and growing uneasiness towards Ethiopia-Eritrea detente, which it believed was aimed at cornering the TPLF. The U.S appeared to be seeking the Tigray rebels as counterweight against Asmara’s influence, long viewed as a regional spoiler by Washington.

However, cooperation on the port of Assab was in no way directly impacted by the conflict. Geographically located farther away from the conflict zone, it remains to this day a stable corridor. Yet, unbeknownst to many, attempts to restore Assab, spearheaded by the UAE began to face difficulty as far back as late 2018. While the specific details of the 2018 peace agreement remained undisclosed, it was widely acknowledged that Ethiopia would reestablish free access to Eritrea’s ports in return for relinquishing the contested regions it had held since the conclusion of the 1998 border conflict.

UAE’s involvement in the port of Assab preceded the 2018 Ethiopia-Eritrea peace deal, mediated by Saudi Arabia and the UAE. Assab served as a military base for the UAE’s support of Yemen’s Hadi Government in its fight against Houthi rebels.

The Ethiopia- Eritrea agreement solidified Abu Dhabi’s and Riyadh’s role in Horn politics, especially considering earlier setbacks in Djibouti and Somalia. The general consensus at the time was Assab would be upgraded with investment from the Gulf and would mainly serve the Ethiopian market.

The subsequent military defeat of the TPLF was welcome news to both Ethiopian and Eritrean leaders, but the involvement of the United States in the African Union led Cessation of Hostilities Agreement (CoHA) that ultimately ended the fighting in November 2022 remained a point of contention. Asmara believed an opportunity for the complete and unconditional surrender of the TPLF leadership was missed. Washington had used its leverage on Ethiopia, to force a soft surrender of the Tigray rebels, as opposed to a complete wipeout. Prime Minister Abiy was likely enticed further by presumed economic and political support from the U.S, which of course holds tremendous sway over the IMF and World Bank.

Eritrea had been involved in the “Tigray War” on the side of Ethiopia’s federal government, but was not party to the peace agreement, and continued to be targeted by Western news media and civil society, alleging it committed atrocities during the war. Faced with increased pressure, Asmara sought to pivot towards Russia and China. In May of 2023, President Isaias Afeworki made a high-level state visit to both China and Russia in quick succession. Meanwhile, in Ethiopia an uneasy peace deal still holds. However, the Amhara Fano militia and the federal government, which were formerly allied have recently clashed. The fighting in Amhara has since overshadowed the conflict in Tigray.

An agreement on the port of Assab now seems complicated, primarily by Ethiopia’s ongoing political turmoil and the geopolitical circumstances, in which the United States has tried to leverage its influence on Ethiopia to bear upon Eritrea, particularly as it pertains to their continued convergence. Both Eritrean and Ethiopian authorities remained tightlipped about their growing divergence on the CoHA and its implementation process, but relations between the two has cooled visibly.

Regardless, it would be too hasty to assume relations are irreparable. Rather than conflating trade and economic issues with regional political and security matters, the two countries may begin compartmentalizing their relations into spheres of commonality and divergence. The latest conversation about the Red Sea has damaged relations, at least in the short term.

While delving into the precise nature of their disagreement would be speculative, it is crucial to acknowledge the possible adverse consequences of escalating tensions, affecting the vital interests of both nations. No one will benefit from a return to the fraught relations which prevailed for two decades before 2018. A recommitment for cooperation cannot be ruled out either. For now, Ethiopia is likely to explore other routes to secure access to maritime trade it controls, while keeping public conversation about the Red Sea alive.

The Somaliland Option

At the moment Somaliland seems to be the path of least resistance. It is geographically accessible to Ethiopia’s mainland, but more importantly, this de facto autonomous region, which declared “the restoration of its independence from Somalia” in May 1991 could be amenable to Ethiopia in return for security assistance and recognition of its vaunted statehood. So far Somaliland has only received recognition by Taiwan, itself a semi-autonomous region of The People’s Republic of China. It maintains diplomatic missions in seven countries, most notably Ethiopia.

Somaliland has been relatively successful and most importantly peaceful. It has managed all its affairs independently since about 1993 and has become self-reliant in many ways. It holds elections, and by regional standards, its telecom and banking sectors are notable. It has attracted some investment from the Middle East and cooperation with Ethiopia could increase economic benefits. Yet it remains prone to the highly fragmented and clannish nature of Somali politics. Most recently, the northernmost sub-region of Somaliland, referred to Awdal, home to the historically strategic seashore of Zeila has sought autonomy, citing neglect by Hargeisa, the capital of Somaliland. Zeila would require significant investment to make it a viable port.

In 2017, an agreement known as the concession agreement was inked by DP World of the UAE, Ethiopia, and the government of Somaliland, aimed at the revitalization and modernization of the Berbera port. This 30-year concession encompassed the development of a commercial port, a free trade zone, a corridor connecting Berbera to Ethiopia’s borders, and the construction of an airport.

As part of this concession, Somaliland’s government was entitled to maintain a 30% stake in the port, while Ethiopia was allocated 19%, and DP World held the majority share at 51%. However, in June 2022, Somaliland declared that ‘Ethiopia had not fulfilled the conditions to obtain its 19% share in the Berbera port due to non-compliance on Ethiopia’s part’. The UAE proceeded to invest the remaining sum to upgrade the port. The port remains a viable, efficient, and competitive option for trade in the region, especially for Ethiopian transit cargo.

Exported goods at Berbera, in Somaliland and Bossaso, in Puntland are largely coming from Ethiopia. These include livestock, camel, coffee, and khat, a stimulant herb widely consumed. “A significant portion of these goods are exported as contraband ”, according to assistant professor Salah Hussien at Jijiga University, located in Ethiopia’s Somali region. Arab traders located in Bossaso, Berbera and Zeila facilitate transactions. Hussein adds, ‘by owning its own port, Ethiopia may be more successful in controlling illicit trade, but establishing rules governing this centuries old and largely informal trade is difficult, especially when you don’t have leverage over the ports’. The Portuguese tried it in the 16^th century and so did the Ottoman Turks in the following centuries’.

Somaliland serves as a secure alternative to Djibouti, Somalia, and Kenya’s Lamu Port. The UAE is keen to support Ethiopia and keep costs lower than what it currently pays in Djibouti due to their strategic partnership. In remarks made to FDI Intelligence, Ahmed Musa, research fellow at the LSE said, “If Ethiopia is not onboard, it raises a big question on the feasibility of the Berbera port and corridor project”. However, Prime Minister Abiy’s recent speech signaled greater ambition, not just for access, but for control. His government has been building a naval force since at least July 2018, when the BBC reported, “Why landlocked Ethiopia wants to launch a navy”. Hundreds of sailors underwent training in the UAE as well as in France. Where will this force be deployed?

So far the UAE has managed to outbid competition for ports in Somaliland, but rival bids from Turkey and Qatar is aways a possibility. China Merchant Port Holdings, which is involved in the development of the US$3.5B Djibouti International Free Trade Zone could come in as well.

China expanded its military presence in Djibouti, which also hosts French, Japanese, Italian as well the American naval base of Camp Lemonnier. Overcrowding of military bases has become an issue. The Pentagon has raised concerns about “strategic competition and potential risk of confrontation with China in Djibouti” and is exploring the viability of Somaliland as an alternative relocation point. Somaliland has offered to host a U.S base with naval and airport facilities in exchange for recognition of its independence, a move that has displeased the Republic of Somalia.

In an apparent signal to Washington, Somaliland has tried to position itself as a potential counterforce to rising Chinese influence in Africa. This is evident in its July 2020 agreement to establish representation offices with Taiwan, a move that has drawn the ire of Beijing, seeking to isolate Taiwan. Ethiopia would have to consider ways of balancing its engagements in light of this.

According to a recent report by Bloomberg, Abiy’s comments were also rebuffed by The Republic of Somalia, where authorities believe Ethiopia is trying to illegally grab its coastal territory. However, Mogadishu has limited leverage on decisions made by Somaliland. Mogadishu itself is reliant on security provided by the African Union Transition Mission in Somalia (ATMIS, formerly AMISOM), in which Ethiopia has played a key role for years. A drawdown of this internationally backed force is currently underway. President Hassan Sheikh Mohamud’s government seeks regional cooperation to contain increasing attacks by Al Shabab terrorists.

In June 2023, ATMIS commenced a reduction of its troop presence in Somalia, withdrawing 2000 out of 22,000 troops. In September, a further 3,000 troops were removed. More reductions are scheduled, with the goal of a complete withdrawal by December 2024. In addition to this multilateral effort, The Republic of Somalia has received direct security assistance from Kenya, Eritrea, and Ethiopia. The latter has been the most extensive, spanning almost two decades, and its complete departure might leave a security gap Mogadishu will struggle to fill. Nonetheless, helping Somalia become more secure and stable remains in the in the interest of all of its neighbors.

Related Red Sea Developments

The Red Sea has quickly evolved into a focal point of fresh geopolitical interest, with a surge in interactions between Gulf nations and the Horn of Africa reshaping the dynamics of politics, economics, and security along one of the world’s busiest maritime routes. Allies and adversaries have come together in this increasingly crowded region, as the Red Sea and its surrounding areas gain heightened strategic significance. Within this evolving frontier, there are both opportunities and challenges, and much like any emerging scenario, the governing principles are yet to be established.

According to a report by Brookings, “No clear regional hegemon exists in the Red Sea, and the competition among aspirants is characterized by projections of influence across ever-greater swathes of land and sea”. In January 2020, the Red Sea Council, organized and hosted by Saudi Arabia was aimed at organizing consensus among the littoral states of Egypt, Jordan, Eritrea, Yemen, Sudan, Djibouti and Somalia. A report by Radio France International (RFI) says ‘the notable meeting did not recognize key players, such as Israel and the self-declared independent country of Somaliland’, which as mentioned, has been directly engaged in livestock and other commodity trading, primarily originating from Ethiopia and transported to Saudi Arabia through the Berbera port.

Ethiopia was also left out of the Red Sea Council. Although landlocked, leaving out the largest population center and fastest growing economy in the region was not ideal. Despite a slowdown, Ethiopia still stands out as one of Africa’s rapidly expanding economies, with its global trade amounting to $19.2 billion in 2022. This figure represents a 4.3% increase compared to the preceding year, as per data collected by Bloomberg. An IMF report projects its GDP to grow at 6.2% in 2023.

Speaking on Ethiopia’s exclusion, Ahmed Soliman, Africa Programme research fellow at Chatham House in 2020 said, “You don’t want to limit participation to littoral states only–There is a need to look at more inclusive engagement and membership around that”. Camille Lons, research associate at the International Institute for Strategic Studies (IISS) Middle East based in Bahrain views Ethiopia’s exclusion as having more to do with lobbying by Egypt rather than its landlocked status. In her statement to RFI, she says, “For Saudi Arabia, there is a similar dilemma over the inclusion of Ethiopia in the Council–Keeping it outside makes little sense, but Saudi Arabia is trying to spare Egypt”. Disagreement over the Grand Ethiopia Renaissance Dam, aimed at harnessing water from the Nile River for electric power generation has fueled Egyptian-Ethiopian tensions for decades.

In July on 2020, a report confirmed members of Somaliland’s Cabinet of Ministers, along with the Chief Intelligence Officer, made a trip to Egypt. The objective was for Egypt to set up a military base and apply pressure on Ethiopia in light of the ongoing Nile River dispute. This coincided with ongoing conflict in northern Ethiopia. The Ethiopian government objected to the move. Foreign Ministry spokesman Dana Mufti stated “This is a red line for us”, adding that ‘Ethiopia wants friendly relations with Somaliland, despite its non-state status’. Although the plan never came into being, word of Egypt’s move prompted Addis Ababa to refocus on the security risk posed from not having enough leverage on coastal territories in a rapidly changing region.

Ranking as the world’s largest landlocked country in terms of population, Ethiopia remained muted on its ambitions, particularly considering its own internal unrest, but quietly proceeded to organize a naval branch of its military, a move some have argued is akin to putting the wagon before the horse. Prime Minister Abiy in his speech said, “talking about the Red Sea in parliament was taboo until now”, before proceeding to explain how “the nation’s fate has long been intertwined with the waters of the Nile River and the Red Sea”. The speech was intended to provoke a somewhat uncomfortable conversation. Some argued it was to distract from Ethiopia’s internal feud. It would be immature to believe this is enough to unite a divided society, however.

Conclusion

Ultimately all nations of the Horn of Africa share the common goal of peace and development. Given the interlinked mesh of interests and advantages, the obvious and best outcome ought to be a balanced win-win solution focused on integrating their economies, but this is easier said than done, especially given the layers of conflict and competition influencing decisions. Encouraging the smooth and uninterrupted flow of goods and services across borders and beyond is a common good that aligns with regional goals as well as continental goals of Agenda 2063.

The politics of maritime trade can be thorny. History shows the goal of owning a port or coastal territory is largely about controlling the chokepoint in trade routes, which then allows one the power to extract levies and political leverage. All states and empires have an inherent desire to do this. This risk is heightened in a global system undergoing transformation, as is currently the case. Numerous interests are establishing trade as well as military outposts on the coastline across the Horn of Africa, and no one wants to be left out, but maintaining peace now is more paramount than ever. In this sense, Prime Minister Abiy is correct in stating, “the longer we ignore the port issue, the more intractable it becomes”. It remains troubling however, that no effective regional mechanism exists to guide a more open conversation for cooperation.

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Ethiopian diaspora-founded organization, Brighter Generation, is determined to make a difference with a technology-assisted teaching approach and impact thousands of students across Ethiopia.  

Brighter Generation is a platform that rallies professional global volunteers, including members of the Ethiopian diaspora and second-generation college students, in knowledge sharing with Ethiopian leaders and innovators, both virtually and in person. This non-profit organization, recognized as a 501c (3) entity and registered in Virginia, USA, was established through the collaborative efforts of Dr. Berhanu Bulcha, a NASA space scientist who is globally recognized for his contribution on developing space technologies to find water on the Moon, and Dr. Tsega Solomon, a biochemist who works on drug development, with support from other diaspora professionals.

The twelfth-grade matriculation, or university entrance exam, is one common measure used in the country to gauge student performance. The test has been marred in systematic cheating scandals for years. Lately, there has been an attempt to minimize cheating, and the effort seems to be bearing fruit, revealing the real picture of where students truly stand, although the result is not pretty. According to the MoE, in 2023, out of 850,000 matriculations, only 3% (27,000 students) passed (scored above 50 percentile). The score was essentially unchanged from last year when a robust controlled setting for test-taking was first introduced nationwide. 

The Minister of Education, professor Brehanu Nega, who taught University in the United States, and was involved in opposition politics for years, said last year, “Measuring where things stood was the first and obvious step.…. It’s where everything starts naturally and trying to clean up the matric examination was a good entry point”. He added, “Now we have a good understanding of student performance by school location, but test performance is not everything, and a holistic approach, starting at grade level, is needed”. 

Identifying the problem has been a big step forward. But this year’s test score data is not to realize the problem. That was already established last year. It is rather to quantify how much progress was made from last year. By that measure, progress seems to be stuck. Approximately 27,000 students out of 195,000 available university spots qualified to get in. So, there is a vacuum, which means one year’s worth of remedial education is needed to qualify 86% of students for university after they graduate high school. This costly grace period was also required last year. When you delve into the data a bit more, it becomes even more daunting. Only 0.03% or 3,000 students nationwide actually scored above 84% or a B score. That means even those 27,000 who got into college are in because of leniency by international standards (Scoring above 50 percentile).

Nonetheless, the students and teachers alike have had to contend with extraordinary circumstances. There was the covid pandemic related interruptions, and then conflict related school closures left many unprepared. The curriculum itself is something that no one talked about until very recently. Students begin their education in one of dozens native languages, adding the official language of Amharic a bit later. When they reach high school, everything suddenly becomes English, a language most students nor the teachers have a full grasp on. While this is not an issue for those attending expensive private schools, a vast majority of students struggle. The University entrance exam is almost entirely an English language-based test. It is also a lot more in-depth than the SAT, an exam most American high schoolers are familiar with. For instance, a student choosing the social science track in junior year will be tested on English, Math, History, Civics, and Geography. The test takes days, not hours. Speaking about exam week, Liyu Asrat, a student who recently took the exam in Addis Ababa stated, “Before they used to let students go home in between exam days, but new rules mean we have to stay in our assigned dorms the entire week”. This was done to minimize widespread cheating.

The need to move the needle forward is now looming, requiring an all-hands-on-deck approach. Education, alongside nutrition, is perhaps the one single area where real societal dividends can be had for Ethiopia. The generational aspect of education is crucial, and focusing on the younger students will pay dividends in the years to come. The shared reward is not all that apparent now. It may seem slow, but steady incremental gain is what it takes to bridge the large gap that exists today. 

One area for boosting progress is through technology. It offers a great opportunity to virtually connect talented and motivated teachers abroad with young students across Ethiopia in ways that impart real practical skills and knowledge, particularly in problem-solving, critical thinking, reading, writing, and community projects. Dr. Berhanu Bulcha, founder of Brighter Generation, says, “Now, if we pinpoint the issues, it goes back to qualified teachers – That’s where we come in; Brighter Generation provides a platform for global professionals with years of experience and academic excellence who can offer enrichment courses for students and local teachers to change the numbers you see.”

For long periods, education in Ethiopia had been largely based on monotonous memorization and regurgitation, where the focus was more on quantity. A shift in approach is needed to overcome practical challenges, however. Students need a good foundation, and tools such as ones offered by Brighter Generation are innovating ways to fill the gap where resources may be lacking. Dr Brehanu Bulcha agrees ‘educating the future generation is a collective responsibility, and members of the diaspora have a lot more they can contribute’. 

While based virtually, the courses offered by BG are hands-on and interactive. Accordingly, “in every center, we have two local teachers assigned to observe while the global instructor is teaching the class via video link – the local teachers are crucial to hands-on projects”, according to Dr. Berhanu Bulcha. The platform includes globally recognized educators, scientists, engineers, medical doctors, pharmacists, and business experts, all of whom contribute some of their time and effort to teach virtual real-time courses to students in 30+ locations across Ethiopia. The program had its third graduation ceremony on September 23 after completing a three-month program and graduated more than 750 students. In this ceremony, the program announced the release of a book, BILIH (ብልህ), timeless stories with moral lessons for all ages, particularly for the youth and young adults written in collaboration with their students.

The Brighter Generation program was launched in the summer of 2022, reaching 110 students across 9 locations in Ethiopia. In 2023, the virtual program expanded its scope significantly, impacting 750 students across 30 locations in Ethiopia. The in-person winter program was demonstrated through a six-week course in January 2023, featuring a group of Massachusetts Institute of Technology (MIT) students who traveled to Ethiopia to teach over 130 high school students at four learning centers.

Over 100 global volunteers collectively contributed engaging and interactive courses, and fulfilling Brighter Generation’s mission is to nurture and motivate a generation of Ethiopian leaders and innovators who will address the core needs of their developing nation.

In its second-year anniversary, the Brighter Generation has taught hundreds of students with the support of the Global volunteers actively engaged, making a lasting impact on the next generation. According to Dr. Berhanu Bulcha, the organization aspires to include hundreds of professional volunteers across the world to reach thousands more students and support the education system in Ethiopia.  You, too, can join this initiative by signing up to volunteer.

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The United States Agency for International Development (USAID) is resuming food deliveries to hundreds of thousands of refugees in Ethiopia, following a four-month hiatus due to allegations of a widespread theft scheme involving supplies.

The resumption of food assistance will occur at 28 refugee camps within Ethiopia, primarily accommodating refugees from Sudan, South Sudan, Somalia, and Eritrea. Nevertheless, broader aid efforts within Ethiopia, to help in the recovery from internal conflicts will remain paused while the United States implements additional safeguards.

According to the USAID, this come after enhanced reforms in the refugee food assistance system, which were collaboratively undertaken by the Ethiopian government and its humanitarian organizations. These changes include bolstered program monitoring, improved commodity tracking, and enhanced registration procedures. According to a related report, the USAID has also implemented various measures globally, such as biometric tests and GPS tracking, to mitigate diversion risks and ensure that food aid reaches those in need.

A USAID spokesperson said “We continue to collaborate with the Ethiopian government to enact further reforms that align with international best practices, ensuring assistance reaches the most vulnerable and needy.” –according to a report by ABC News.

In May, 2023, the United Nations World Food Program (WFP) suspended all food aid to Ethiopia after alleging extensive diversion of donated food intended for millions of people in the country’s northern Tigray region. The news was characterized as possibly the largest theft of humanitarian food in history. Subsequently, the USAID also announce its stoppage of aid distribution in the country.  

It was later said an aid diversion probe revealed theft involving armed actors, government bureaucrats, as well as humanitarian workers. In the same month of June, The New Humanitarian reported senior WFP leadership in Ethiopia “resigned their positions shortly before the findings of a probe into the misappropriation of food aid were due to be made public”, suggesting extensive involvement in the scheme by WFP officials.  To date, despite recurrent news reports and statements, no official document regarding the WFP’s probe findings has been made public. In July a report by Abren considered those suffering from lack of food aid amid the forgotten investigation.

On June 19, 2023, WFP announced conditionalities on the resumption of food aid. To deal with the issue, Valerie Guarnieri, the WFP’s Assistant Executive Director for Programme and Policy Development, had said ‘the organization aims to decrease the influence of local and regional government officials in determining eligibility for food aid.’

Following the scandal, authorities in the Tigray region said they arrested 480 individuals in connection with the theft. They asserted “five entities, the Eritrean government, the Ethiopian federal government, the Tigray regional authorities, the coordinators of the displaced persons camps and humanitarian workers, all took part” __ in aid siphoning. One month after this announcement, the World Food Program cautiously restarted limited food distributions in certain areas of the northern Tigray region on July 31 while implementing what it dubbed “enhanced controls and measures”.

International food aid in Ethiopia has a long been politicized and immersed in corrupt practices, a fact the aid agencies must have known about. However, this is the first time these practices became widely publicized. In the 2022 fiscal year, USAID disbursed nearly $1.5 billion in humanitarian assistance to Ethiopia, most of it food aid.

While the most recent resumption of aid to refugees is welcome sign of improved conditions, there has yet to be an official report about said scrutiny. On the contrary, the aid agencies seem to be more troubled with the optics of the suspension. For example, they sponsored a report published on Reliefweb in July, examining Ethiopian social media public sentiment data, mostly collected on Facebook, to measure the public’s response to the suspension of aid. Its conclusion is summed up in the title; “USAID, and WFP Decision to Suspend Food Aid Blamed on Ethiopian Government”.

Related stories below.

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Although the European Union was the primary backer of the UN’s International Commission of Human Rights Experts on Ethiopia (ICHREE), ultimately, no proposal was presented to prolong the tenure of the International Commission’s further scrutiny into Ethiopia, as the deadline passed on Wednesday at the Human Rights Council in Geneva. Consequently, the investigation will be dissolved when its mandate concludes later this month.

In what appeared to be a last ditch effort on October 3, 2023, the ICHREE team implored the council to prolong the inquiry, citing ongoing atrocities in the northern Tigray region of Ethiopia, even while the epicenter of armed combat has since moved into the Amhara region.

According to the team of experts, ‘Eritrean troops, in alliance with Ethiopia’s military, continue to commit sexual violence against women, including acts of sexual slavery in parts of Tigray.’ The ICHREE report also accused Amhara forces of conducting ethnic cleansing in what the experts referred to as “West Tigray”. The Amhara denote the region in question as “Welkait-Tegede”. In addition, the UN experts referred to ongoing clashes in Amhara and Oromo as indicating the need for further investigation.

In an interview given to ABC news, one of ICHREE’s members, Steven Ratner stated, “Ensuring investigations persist is crucial because there is a genuine and imminent risk of further deterioration in the situation. It falls upon the international community to address human rights violations and prevent the gravest tragedies,”

Previously, European nations had endorsed the inquiry to secure accountability for war crimes committed during the two-year insurrection in the Tigray region. It is thus no surprise Tigray featured heavily in the first report, which was published amidst the fighting there in September 2022. However, even while conflict in the Tigray region subsided due to the Cessation of the Hostilities Agreement (CoHA), and has since spiked in other regions, particularly in Amahra, the latest report by ICHREE was mostly concerning the former.  Ethiopian federal forces are currently clashing with militants in Amhara, where the Ethiopian Human Rights Commission has sighted atrocities.

Ethiopia has consistently opposed the commission, impeding its experts from conducting investigations within the country and characterizing it as politically motivated and tainted with flawed methodology. It also cites manipulation of testimony data, a constant feature of the conflict that broke out on November 4, 2020. The commission had to operate remotely, based in an office in Uganda.

In their most recent report, the commission’s experts expressed that Ethiopia’s national transitional justice initiative “falls considerably short” of both African and international standards. The government in Addis Ababa refuted this but vowed to continue with its plan, adding measures for reconciliation through the National Dialogue.

Signs of ICHREE’s conclusion became more palpable when the European Union unveiled a 650-million-euro ($680 million) aid package for Ethiopia on Tuesday, marking the bloc’s initial steps toward reestablishing relations with the country, despite prior demands for accountability as a prerequisite.

During a press conference held in Addis Ababa, the EU Commissioner for International Partnerships, Jutta Urpilainen acknowledged that the bloc had agreed normalize relations, urging the Ethiopian government to ‘establish robust, independent, impartial, and transparent mechanisms to promote transitional justice in light of human rights violations in Ethiopia.’ This means lack of progress in transitional justice could potentially jeopardize the ongoing gradual normalization of relations between the EU and Ethiopia.

Human Rights Watch and Amnesty International had lobbied extensively for the renewal of the UN’s inquiry. Allowing Ethiopia to be removed from the council’s agenda will come as a blow to both organizations, which Addis Ababa accuses of being overtly prejudiced. The two groups viewed the U.N. investigation as the final significant independent inquiry into the Tigray conflict.

In June, the African Union quietly abandoned its own investigation into atrocities committed in Ethiopia during the war, following extensive lobbying by Ethiopia. The country viewed the council as a means to intervene in its domestic political affairs by using human rights as a gateway, and worked to circumvent encroaching on its sovereignty, emphasizing domestic initiatives for transitional justice after the cease-fire.

In the end, a confluence of events caused the ICHREE’s final demise, including geopolitical shifts, and Ethiopia’s skillful diplomatic maneuvering to pivot. But the one that stands out the most is the report’s own contradictions and biases, which ultimately turned off many UN human rights council member countries, particularly those in Africa. Its backers finally concluded there was no support.

You can find related stories below

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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.

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According to a report by PBS, Menendez declared, “Over the years, there have been persistent efforts behind closed doors to mute my influence and undermine my political career.” This sentiment harkened back to a similar statement he made six years ago, addressing those he believed were working against him and vowing not to forget their actions.

Senator Bob Menendez’s response to the recent federal corruption charges, which also involve his wife and business associates, demonstrates that he is adopting a similar resolute position as he did when he confronted federal allegations almost a decade ago. The Senator asserts the prosecutors have distorted the ordinary activities of a congressional office and have unfairly targeted him and his wife. However, if these allegations are substantiated, they will present a damning narrative of how American policy towards an autocratic ally was compromised for personal gain.

For decades Egypt has been a beneficiary of American military aid. It currently receives approximately $1.3 billion annually in U.S military assistance, theoretically contingent upon Egypt’s progress in addressing its domestic human rights, as assessed by the State Department. As a result, decisions regarding the disbursement of this aid often becomes a contentious matter involving lawmakers, advocacy groups, and the White House.

Historically, the State Department as well as the executive branch have respected requests to postpone grants and weapons sales from the chair or ranking member of the Senate Foreign Relations Committee.

Oddly, even while allegedly taking bribes from the Egyptians, Senator Menendez has frequently been a vocal critic of the Egyptian government. For instance, he criticized the Trump administration for hosting Egyptian President Abdel Fattah El-Sisi, who visited the United States in 2019. On the occasion Menendez urged then Secretary of State Mike Pompeo to raise human rights to the Egyptian leader.

However, federal prosecutors contend that Senator Menendez played a different role behind the scenes, receiving money, a luxury car, and gifts, including bars of gold, from three New Jersey businessmen—Wael Hana, Jose Uribe, and Fred Daibes—in exchange for aiding the Egyptian regime.

Prosecutors also claim Mendez provided sensitive information about U.S. diplomats in Cairo, which assisted the Egyptian government covertly. Furthermore, the indictment alleges that Menendez “improperly advised and pressured” a U.S. agricultural official to secure a contract for Hana as the exclusive supplier of halal meat to Egypt.

According to the arraignment, Senator Menendez maintained confidential relationships with Egyptian officials and business figures throughout 2018, and readily shared sensitive information with his associates concerning U.S. policy toward Cairo. During a private dinner, Senator Menendez told Wael Hana that the U.S. government had lifted a ban on the sale of small arms and ammunition to Egypt, information that Hana subsequently relayed to an Egyptian official.

According to a report by Politico, ‘Menendez is alleged to have drafted Cairo’s lobbying appeal to other U.S. senators in a bid to secure support for the release of $300 million in U.S. aid reserved for Egypt. After a meeting with Egyptian military officials, Menendez reportedly had his wife Nadine convey to Hana that he had given his approval for the sale of 46,000 120mm target practice rounds and 10,000 rounds of tank ammunition, with a total worth of $99 million’.

In a text message to Nadine, which she forwarded to Hana, Menendez is said to have noted, “NOTE: These tank rounds are for tanks they have had for many years. They are using these in the Sinai for the counter-terrorism campaign.”

The State Department subsequently announced its approval of the sale, which included high-explosive and armor-piercing rounds manufactured by General Dynamics. The sale was intended to aid Egypt in its fight against Islamic State militants and to provide target rounds for training M1 Abrams tank crews.

Adrienne Watson, the White House National Security Council spokesperson, declined to comment when approached for this story, according to the Washington Post. State Department representatives did not immediately respond to requests for comment as well.

Politico said, regarding these allegations, Egypt’s Ambassador in Washington, Motaz Zahran, offered only a brief response, stating, “Not really.”

Menendez is also accused of intervening in Egyptian diplomatic matters and advocating for U.S. involvement in favor of Cairo. After a meeting with an Egyptian official referred to as “the general,” prosecutors contend that Menendez inserted himself into a longstanding diplomatic dispute involving Egypt, Sudan, and Ethiopia concerning access to the Nile River and a significant Ethiopian dam project situated near the river’s source.

The construction of the Grand Ethiopian Renaissance Dam (GERD) has been a key foreign policy concern for Egypt, given its heavy reliance on uninterrupted water flow from the Nile to sustain its population concentrated along the river’s delta and banks.

In April 2020, Menendez wrote to then-Treasury Secretary Steven Mnuchin and Pompeo expressing concerns about the “stalled negotiations between Egypt, Ethiopia, and Sudan over [the Dam].” He called upon the administration to significantly increase the State Department’s involvement in the dam negotiations, according to the indictment.

Senator Menendez was the sponsor of the Ethiopia sanctions bill, S.3199. He has also opined on Ethiopia’s internal conflict, namely the war in the northern Tigray region, where he wrote letters pressing President Biden to sanction the country, which at the time was engaged in active fighting with the Tigray People’s Liberation Front (TPLF), a rebel group which sought to overthrow the government in Addis Ababa. In one of his letters Menendez remarked, “I continue to assert that Ethiopian officials have committed genocide in Tigray, and I strongly urge the Biden administration to make its own assessment as soon as possible,”.  

We do know the armed group’s external reps lobbied U.S lawmakers, including Rep. Brad Sherman of California’s 32^nd congressional district, and Rep. Gregory Meeks of New York’s fifth congressional district. Whether or not the Senator Menendez and others were petitioned legally, or otherwise received bribes by the external affairs unit of the TPLF is to be determined, but the latest indictment increases potential scrutiny.

From 2017 onwards, Egyptian authorities aimed at slowing down progress on GERD, even backed rebels, who in return were willing to disrupt the construction of the dam by closing supply routes in Western Ethiopia. Local media recounted several instances of these stories. During the war with the TPLF, secret flights originating in Sudan provided military equipment to the rebels in the Tigray region. The government in Ethiopia has not said whether these were Egyptian in origin.

The embattled Senator has so far rejected calls to resign his seat but has temporarily stepped down from the Foreign Relations Committee. The bigger question remains, the extent to which American foreign policy is open to manipulation by foreign entities willing to use increasingly sophisticated means to bribe receptive lawmakers. Therein lies a fundamental challenge, as United States tries to engage an ever more complex world.  

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Both Amnesty and HRW have advertised their reports on northern Ethiopia as veritable, longing for readers to accept them as true. Yet nearly all their allegations depended on remotely sourced information, documenting the most diabolical acts. This method however has a serious defect. Any layperson in Ethiopia would tell you the challenges of tenuously collected witness testimony in the Tigray region, where the authorities have repeatedly demonstrated their capacity to orchestrate witness reports throughout the duration of the war, from November 2020 to November 2022.

The Tigray People’s Liberation Front (TPLF) is notorious for staging atrocities and massacres to fit its political narratives. This knack extends to the 1980s, and even throughout its tenure as the leading political party (1991 to 2018). For example, a report by journalist Alistair Thompson, who visited the region in November 2022 indicated the extent to which combatant war casualties were consciously buried in mass graves by TPLF. In a separate article, the same author warns, “All reports from Tigray claiming to have found mass graves containing evidence of massacres and human rights violations need to be read in the light of the fact that there is very clear evidence in Alamata of an active effort by the TPLF to create fake evidence of massacres”.

The staging of false evidence of atrocities was so rampant, deserters from Tigray frequently invoked their experience. In one instance, journalist Elias Michael, who worked for Dimitsi Woyane  testified “Tigrayan sex workers in Mekelle were being paid to pose as university students and tell rape stories to foreign NGOs and media” In his book, Getting Ethiopia Dead Wrong, long-time correspondent, Rasmus Sonderris recounted a litany of similar fabricated stories meant to invoke tribal rage. Lamentably, most mainstream media shied away from reporting stories debunking accusations of “rape as a weapon of war”. After all, in the post “Me Too” and “woke-culture” we live in, even an accurate statement denying rape would be labeled as an insensitive defense of sexual assault.

The ICHREE report, like that of Amnesty’s leans heavy on another routinely misrepresented narrative, namely that of “starvation-used-as-a-weapon of war” accusation, despite the WFP reporting in July 2022 that it had prevented famine. Later, WFP country director for Ethoipia, Steven Omamo would write a book discussing the full Ethiopian cooperation in distributing food in difficult conditions.

Another similar arrangement was when CNN reported, ‘victims of ethnic cleansing in Tigray were killed and dumped in the Tekeze river, with their bodies floating down river,  and later recovered in Sudan’. This story was doctored a few times, with CNN providing a silent edit weeks later to improve its plausibility. The primary CNN source for the floating-corpses story was Gebretensae Gebre­kristos, or ‘Gerri’. He is seen in the interview video wearing a ballcap with the TPLF’s founding date and insignia. Abren wrote a report showing he was a TPLF fixer. But his co-conspirators were pro­bably not supposed to reveal they knew exactly how many bodies to collect downstream.

These are just a few of many cases in which evidence is cooked up, sensationalized, and twisted to paint a narrative meant to generate fury. The latest ICHREE report features similar pitfalls. It even sites several mistranslations, such as calling the word “Woyane” a pejorative for Tigray. It might not even secure the necessary votes for an extension of its mandate. However, considering the substantial scope for investigation, Ethiopia could potentially receive valuable forensic and expert assistance through the Ethiopian Human Rights Commission (EHRC), aimed at establishing “guilt beyond reasonable doubt,” a universally accepted standard. The outcome of this proposition will become apparent in the upcoming days. Nonetheless a sense of caution is warranted, given that ICHREE’s press statement  criticized Ethiopia’s internal transitional justice mechanism, undermining it credibility while providing limited support for capacity development.

There is no reason to suggest Ethiopia would accept an international team of human rights experts to do an investigation on the ground, especially not after three years of manipulated data obstinately digested by the experts and regurgitated by mainstream media with fanfare. The evidence so far indicates even worse reporting is in order if these organizations are allowed on site. in light of this, renewing the mandate of the ICHREE would only serve to corroborate everyone’s deep suspicions that the group of experts and their backers have a political axe to grind, a matter that will do more to drive indignant Ethiopians more into the anti-Western camp.

Finally, the ICHREE gives scant attention recent turmoil in the Amhara region, with conflict largely between federal forces and Amhara regional militia known as Fano. In comparison Tigray is relatively calmer and beginning to normalize. This is credit to the Cessation of Hostilities Agreement, which seems to be holding up. The EHRC has recently reported on several arbitrary mass detention and killings in Amhara. Violations in Oromia are ongoing, with all sides accused of atrocities.

The ICHREE report is nowhere near in addressing the complex nature of recent human rights events in Ethiopia. As mentioned, it has several deep flaws of methodology that need to be addressed. A few recommendations as follows.

1. Commitment to Accountability: Contrary to the ICHREE’s premise, Ethiopia has understood its commitment to accountability, and that accountability is a means to a true transition. While the government seeks steps towards transitional justice, as evidenced by the Policy Options for Transitional Justice published in January 2023, the ICHREE has ridiculed this endeavor. It also criticizes the government’s emphasis on national reconciliation, instead of acknowledging that transitional justice is a complex process that requires a balance between justice and reconciliation.

2. Role of ICHREE: While disbandment of ICHREE is possible, it’s important to consider the commission’s role in supporting Ethiopia improve its internal mechanisms. ICHREE was tasked with investigating violations and abuses of international human rights law, humanitarian law, and refugee law in Ethiopia, as well as identifying those responsible. However, it is equally important to recognize that its mandate was set to expire in December 2023. The UN human rights team should focus on capacity building in Ethiopia.

3. African Initiatives: The ICHREE overlooks the fact that African initiatives are also addressing the situation in Ethiopia. The African Commission on Human and Peoples’ Rights initiated a commission of inquiry, and while its findings may not have been made public, it indicates a regional commitment to addressing the issues in Ethiopia. This underscores the importance of regional efforts in resolving conflicts.

4. Ongoing Challenges: The situation in Ethiopia is undoubtedly challenging, with conflicts in Tigray, Amhara, and Oromo regions. Nevertheless, characterizing Ethiopia’s efforts as a failure is an oversimplification. Contending with multiple internal conflicts poses difficulty, and measures to restore stability requires addressing the political dimension, hence the need for national dialogue.  

5. Accountability and Justice: The ICHREE rightly highlights the importance of accountability for international crimes, such as war crimes and crimes against humanity. However, the path to achieving this accountability must involve a multi-faceted approach that includes a domestic processes, regional initiatives, and international support. The call for the renewal of ICHREE’s mandate should not be viewed as the sole solution but as part of a broader strategy to achieve justice.

In conclusion, disbandment of ICHREE should not however mean the end of criticism for Ethiopia’s human rights record. An honest and transparent investigation into violations is merited. However, it is essential to consider the complex nature of the situation. Commitment to transitional justice and regional initiatives should be acknowledged, and efforts to achieve accountability and justice should encompass a comprehensive approach. The international community must continue to engage with Ethiopia to support its endeavors in achieving a just and peaceful resolution to the conflicts in the country, but it must do so as a partner, not as judge and prosecutor all at once.

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In the 1870s, Khedive Ismail Pasha of Egypt under British protection, directed his Chief of Staff, William Wing Loring, to launch an expedition into Ethiopia with the intention of annexing the Blue Nile (Abbay) river basin for the Khedivate crown. This followed Egypt’s successful annexation of the Sanjak of Habesh in 1866, which had led to the dissolution of the Ottoman Habesh Eyalet in 1869.

Although the British and European powers backed this endeavor primarily to unseat the Ottoman Empire that had significant control of the strategic Red Sea corridor, Egyptian governors sought to leverage this European venture for their own goal of obtaining control of the source of the Nile. British industrialists with a stake in Egyptian cotton also understood the value of the Nile to insure cheap cotton imports to Europe. The Nile was one area were Egyptian and European interests at the time converged. The taking of Habesh Eyalet, which had been a domain of the Ottoman Turks since 1557 provided a strategic foothold for British ruled Egypt in Massawa and Keren, leading the Khedive to believe that the inland campaign into Ethiopia would be relatively straightforward. However, in the 1870s the expedition encountered unexpected resistance.

Under the leadership of Ethiopian Emperor Yohannes IV, Ethiopia repelled Egypt’s plan, which was backed by the British Empire, and aimed to control Ethiopia, with the eventual goal of controlling the Blue Nile. Under the military leadership of Ras Alula Aba Nega, Emperor Yohannes was able to achieve a significant victory over the Egyptian invasion at Gura in 1876. This triumph showcased Ethiopia’s robust defensive capabilities. It also angered European creditors, who had financed the Egyptian campaign that failed to colonize key regions in the Upper Nile basin, which now comprise parts of Sudan, Ethiopia, Eritrea, Uganda, Kenya, South Sudan, and the Democratic Republic of Congo. Later international agreements in the early 20th century such as the Kellogg-Briand Pact and the Stimson Doctrine further discouraged the conquest of sovereign nations, effectively closing the door on Egypt’s aspirations to claim a stake in the Horn of Africa.

In the 1950s, after its independence from Britain, Egypt developed a new strategy to safeguard its Nile basin hydrological interests, which can be summarized as follows:

Prevent Ethiopia from developing the Blue Nile river basin by employing a combination of hostile diplomacy and incitement of internal instability, including support for Somali irredentism and domestic rebellions, diverting resources away from hydrological and agricultural projects.

In September 1960, Ethiopian Emperor Haile Selassie openly accused Egypt of promoting the concept of Greater Somalia, which was driven by an irredentist claim of Ethiopian territory. Later, Mengistu HaileMariam denounced Egypt for arming Somali rebels during the Ethiopia-Somalia War in Ogaden. Despite these accusations, Egypt’s Anwar Sadat continued to supply Somalia with weapons. According to a report by the New York Times in February 1978, the Kenyan Air Force intercepted 20 tons of Egyptian arms en route to Somalia. In May 1980, President Anwar Sadat declared, “Somalia is an Arab country and a member of the Arab League, and Egypt would not hesitate to send its troops to Somalia to fight alongside the Somalia’s then government against Ethiopia if necessary.” Can Egypt now deploy soldiers in any nation neighboring Ethiopia so as to fight against Ethiopia?

Today, the Nile River remains crucial to Egypt, making agreement between Egypt and Ethiopia over shared Nile waters a complicated matter. Most of Egypt’s population centers are situated along the Nile River basin, including Cairo, Giza, and Alexandria, which collectively house a substantial portion of Egypt’s population. Moreover, the fertile Nile valley supports agriculture, so any decrease in water volume directly impacts arable land.

Egypt continues to raise concerns about the potential negative consequences if the dam operates without considering its water share, viewing it as an existential threat. As the most densely populated country in the Arab world, Egypt heavily relies on the Nile River to provide water for its agriculture and sustenance for its vast population, which exceeds 100 million people. Approximately 85% of the river’s flow originates from Ethiopia.

Ethiopia does not recognize the 1959 Nile Water Treaty, an agreement it was not party to, and one which was made between Sudan and Egypt, allocating the entire average annual flow of the Nile to be shared among the two downstream countries, at 18.5 and 55.5 billion cubic meters respectively, but ignored the rights to water of the remaining eight Nile countries, of which Ethiopia contributes approximately 85% of the river’s flow.

In 2011, amidst the Arab Spring uprisings, Ethiopia initiated the construction of The Grand Ethiopian Renaissance Dam(GERD), Africa’s largest dam on the Abay River, also known as the Blue Nile. Initially called the Millennium Dam, this project aimed at providing much needed electricity, economic development, and enhancement of food security.

However, a rebellion in Ethiopia’s northern Tigray region, from 2020 to 2022 posed a challenge to the nation’s stability and the completion of GERD. External actors, including Egypt aimed to leverage ongoing insurgency of the Tigray People’s Liberation Front (TPLF) to disrupt Ethiopia’s defensive-offensive realist dynamics and influence the country’s trajectory. They exposed Ethiopia to hostile diplomacy, information warfare, exacerbated ethnic divisions, fractured the military, and heightened domestic instability. While this major threat to the sovereignty and territorial integrity of the country has now been averted, conflicts in the Oromo as well as Amhara regions persist.

The events that followed Ethiopia’s Tigray war and ensuing internal feuds raise several critical questions:

• Will Egypt and its partners be able to inhibit large-scale water usage in the Abbay basin by fomenting instability in Ethiopia to keep it underdeveloped and weak?
• How did rebel groups like the TPLF and the Oromo Liberation Army (OLA) come to be aligned with Egypt?
• Was TPLF being supplied through Sudan? If yes, who are the suppliers and what are the supplies (military and otherwise)? We know several secret flights ferried arms to the rebels during the war in 2021, when Ethiopia’s air defense strategy was still in shambles. There has since been an effort to bolster defensive capabilities. How adequate is Ethiopia’s defensive posture now?
• Will growing ethno-nationalist polarization lead to fracturing, and eventual balkanization of Ethiopia?
• Can political Islam in Sudan and Somalia be weaponized as a geo-strategic tool to destabilize the upper Nile basin nations? Will Islamists exploit this to their advantage and play a double game that benefits them?
• Have similar counter-terrorism strategies, which had the end result of fueling extremism in places ranging from Iraq, Afghanistan, and Syria, strengthened jihadism led by Al Shabab?…. Might this jihadism be concealed under the guise of the Greater Somalia project, aimed at destabilizing the entire region?
• Why did foreign policy makers and institutions in the West go to the lengths they did to salvage the TPLF, primarily as a wedge-between to avert possible convergence between Ethiopia and Eritrea after the peace agreement of 2018? and how is this related to the Nile Basin Agenda?
• Can Ethiopia still win the information war being waged against it?

The fear of losing control of the Nile has been a central feature of Egypt’s relationship with Ethiopia. To secure its interests Egypt has leveraged the Arab world, as well as Western powers, where their interests conveniently converged. This strategy was successful in foreclosing international multilateral financing for the GERD, an outcome that galvanized Ethiopia to self finance. For its part Ethiopia has been somewhat successful leveraging African solidarity and African solutions, particularly among Nile basin countries.

Now that GERD is nearly complete and the water continues to flow, how does the calculus change, if at all? And will this force the two sides to choose constructive engagement that builds trust? Using the historical context we can calibrate geopolitical lenses of realism and pragmatism in today’s world, to make sense and give more meaning to GERD. Attempting to answer these questions is crucial to understanding dynamic events in the Horn of Africa.

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