The Political instability in Ethiopia is threatening its Economy

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Abbay Media

Shiberu Tamerat

An institution tasked with assessing Ethiopia’s annual loan status, reports, the deepening political crisis in Ethiopia is undermining the economic gains registered in the past and is further exacerbating economic challenges.

For the past ten years, the government led economy of Ethiopia has recorded significant growth, however, the report lists three major factors contributing to the dark economic clouds gathering on Ethiopia’s horizon.

Citing the World Bank report that ranks Ethiopia as the number one nation in Africa with the highest price increase in 2017 lists political instability, climate change and exposure to falling price of export goods, as reasons causing the deepening economic crisis.

Ethiopia is known for registering eight percent annual economic growth, and previously was the number one destination in Africa attracting foreign investors, however, due to the rising political turmoil across the country is losing some of the investors and if the instability continues, Ethiopia could lose all of its investors.

The Oromia uprising in the middle of 2015 and the continued rebellion in the Amhara region in 2016 and the ensuing declaration of the state of emergency by the government has negatively impacted country’s economy.

Unless the government of Ethiopia is taking measures to stabilize the political situation in the country this could derail the significant economic gains Ethiopia registered for many years. The report concludes the price fluctuation of coffee and gold, major export items in Ethiopia, is adversely affecting the economy.