June 18th, 2008 Print Print Email Email

In 2008, Ethiopians have witnessed two horrendous government actions that in future would be treated as prelude to beginning of the end of another traumatic era. The first one is the looming humanitarian catastrophe, which, despite months of denial of its existence, government has finally confirmed. Consequently, once again today the lives of close to five million citizens, perhaps even more, is exposed to danger. Moreover, as a clear admission of its failure to empower the people to feed themselves, the government has finally appealed for international food aid. (more…)

In 2008, Ethiopians have witnessed two horrendous government actions that in future would be treated as prelude to beginning of the end of another traumatic era. The first one is the looming humanitarian catastrophe, which, despite months of denial of its existence, government has finally confirmed. Consequently, once again today the lives of close to five million citizens, perhaps even more, is exposed to danger. Moreover, as a clear admission of its failure to empower the people to feed themselves, the government has finally appealed for international food aid.

The second one is the awarding to the Sudan of Ethiopian territory by its government that generations of Ethiopians have defended, despite Sudanese claim over a span of ten decades (first under colonial administration) lands beyond the undemarcated border as its own. The incentive for the present leaders to reverse course is, they told the people in the border areas, that Ethiopia would get cheap oil and an alternative access to the sea to a country they have rendered landlocked. However, there is no doubt that the main attraction is security that the Sudan has offered to the ruling party in Ethiopia by closing its border to Ethiopian opposition groups and belligerent Eritrea. When the story of land transfer was first leaked through Sudanese media, automatic reaction of government has been hysterical denial. What compelled them to throw in tatters their cover-ups, if not their outright lies, is the lack of credible arguments and open rejection by experts and the people in the border regions.

Not entirely new though, these situations represent yet another clear case of longstanding TPLF/EPRDF practice of deception and perfidy as statecraft. The only difference this time is they have touched raw nerves of citizens, as recent public actions in Armacheho and the continuing widespread condemnations of the regime’s handling of the famine attest. Citizens would no longer find it easier to listen to the regime, let alone trust it. This has deprived it of the essential ingredients of governance and the essential basis for its much-vaunted claim of commitment to national development. Against the backdrop of continuing state brutality and unsound government policies, especially the impacts of inflation that have already undermined the pride and lives of the majority of our citizens, the rapidity with which these two developments have gotten prominence in recent months speak for themselves. Let there be no doubt, these are unmistakable signs of a terrible headwind ahead for the regime and for our unfortunate country too.


For several decades, inflation in Ethiopia has been closely associated with drought. Since economic activities outside agriculture are limited, movement in core inflation has been insignificant. In other words, because of the backward state of Ethiopian agriculture, the economy is often exposed to various types of shocks—drought, floods, insects or killer diseases. While peasants are the first to know whether there is drought, rising food prices are also signals to consumers that dangerous times are in the corner. A look into inflation figures over time and its comparison with data on crop failures shows closer relationship. The only factor that distorts this relationship is government exclusive focus on years of bumper crops.

Unfortunately, in parallel with times of bumper harvests in the country, there have always been a high number of hunger pockets. The worrisome development now is the growth in size and number of these pockets over time. Highly focussed people sometimes generalize too much and they see this simply as an aspect of the overall environmental deterioration. The reality, however, is that it is mainly a reflection of failure in governmental policies that through 17 years has scarcely succeeded in rehabilitating denuded areas. On the contrary, in its pursuit of increased agricultural production, virgin lands are opened up further exposing fertile regions. This approach has only made more and more fertile areas prone to drought and famines.

The first evidence is six out of nine regions are in need of some form of food aid. That was not the case before, as drought was more pronounced in northern Shoa, Tigrai and Wollo. Another indicator is the change in inflation since 2005. For instance, at the height of the drought in 2003, according to the IMF, average annual inflation accelerated to 13.4 percent in the 10-month period ending in April 2003, up from -7.2 percent in 2001/02, mainly because of food shortages caused by a severe drought (Source: IMF, Country Report No. 05/26, January 2005). On a yearly basis, headline inflation rose to 24.8 percent, while core inflation was 15.1. Today, the 26 percent headline inflation is the highest since 2002/03, although there are added causes to that, especially the endless hike in oil price.

The inflationary pressure that began in earnest in 2005, side by side with the deterioration in food producing regions, accelerated through the subsequent years. According to the IMF, in 2005 inflation jumped form 7.7 percent in 2004/05 to 10.8 percent, although for political reasons the government drummed up the sustained growth of Ethiopian economy, especially agriculture. In February 2007, it reached 19 percent and official international reserves fell to less than eight weeks of import coverage. At the time, the IMF warned officials, “While the economic outlook seems favorable with strong macro policy implementation, there are significant risks. There is very little margin for policy slippages if economic stability is to be maintained, adverse weather may recur, structural bottlenecks and constraints persist, and the environment is not yet fully conducive to private sector-led growth”(Source: IMF, Country Report No. 07/247, July 2007).

In March 2008, the Fund reported that “the 12-month increase of overall inflation was 30 percent, with food price rises of 40 percent (year on year) having a particularly strong negative impact on the urban poor” (Source: IMF, Press Release No. 08/115, 19 May 2008). During the previous two years, the Somali region has been a war theatre; military operations in Oromyia were also intense in order to destroy the OLF. As a result, agricultural activity has been severely curtailed during these difficult times, thus, resulting in the onset of the current drought and famine. The same is true in SNNPR and Amhara regions. While there is no conflict in Tigrai, a substantial part of the region continues to be vulnerable to drought.

Last April, as the drought was deepening and famine spreading, the prime minister emphasized that food production was high and that the peasantry with its increased production was in a position of strength to bargain for higher prices. The effort is to make the world believe that the skyrocketing inflation in Ethiopia was attributable to heightened economic activity. It is not clear how this could all be caused by heightened economic activity in a country where, according to data by the CSA and the ministry of finance, manufacturing industries have been operating in almost half their capacities. Furthermore, the country since late 2007 has lagged behind substantially in achieving its export targets. Businesses complain, among others, about lack of working capital, foreign exchange, raw materials and spare parts. Power outages and lack of water, including frequent breakages of machineries have also been constant impediments to production.

Even if one agrees with what the prime minister said, the simple question to government authorities is why there have been appeals for massive international food aid on a continuous basis, although there are differences of magnitude and urgency. Both the records of the Ethiopian government and the United Nations indicate that for the last several years Ethiopia has sought international food aid on several occasions, at times twice a year and for those in food deficit regions on a continuous basis.

Among the factors responsible for this is the fact that the return of rains during subsequent season does not necessarily provide relief to the victims. It does not at all mean that life returns to normal in the next farming season. Experts have often stressed that Ethiopia would continue to suffer from one season of drought for several years to come. This is because of the depletion of resources and vital assets that distress millions of farmers and pastoralists. Many remain vulnerable because of poor health, inadequate water and sanitation services and insufficient agricultural support—in short because they fall to the deepest abyss of destitution. Government deliberately distracts attention from this by drumming up the story of record harvests in the fertile regions, by implication meaning that things have improved all over the country.

Although government has now grudgingly admitted the existence of famine in southern and eastern Ethiopia, to this day it seems it is more preoccupied with quibbling over the numbers of affected population or attacking civic organizations (Source: Walta Information Centre, 13 June 2008). Obviously, the present focus of the United Nations, NGOs and donor governments is on Somali region and Oromyia, the two being mentioned often because of the critical situation there. Unfortunately, the situation in four other regions—Afar, Amhara, SNNPR and Tigrai—is equally grim. Keep in mind that, at present without this drought situation, already 7.2 million people would need assistance in food deficit regions through the Productive Safety Net Programme (PSNP). The government’s current five-year plan reads, “the National Food Security Program that seeks to attain food security for five million chronically food insecure people; and another 10 million who are badly affected by food shortages in drought years.”

In the light of this, what image or credibility is there to fight for and defend when even the fertile parts of the country are progressively becoming drought prone areas? For once, government should summon courage and admit that its economic policies, especially agricultural development, have miserably failed to address the root causes of perpetual poverty and hunger that have become the pervasive feature of Ethiopian life. I urge government to accept the truism of the well-founded conclusion that in democracy famine has no place. This is because free media and representatives of the people become empowered, among others, to propose new ideas and solutions. When government is on the wrong track, they would expose it, if necessary, by denying it room to hide from the people. Let alone a grave situation of such immense proportions like the killer drought and famine and the sale to a foreign country of national territory, even the semblance of impropriety cannot escape scrutiny.

In the course of the current crises, even undemocratic Ethiopia has unintentionally lent credence to the truism that in democracy people would not be left to starve and die in silence. A few months back, the weekly Addis Fortune magazine proved that by exposing cautiously and systematically government cover-ups. It all started already in March in parliament, when the opposition requested discussion on the drought situation in the country; government chose to ridicule them. Bulcha Demeksa of the Oromo Federalist Movement expressed his frustration by saying, “There is another hot issue that we hoped that the PM would raise. We hear that people and cattle are dying of starvation in Borena and Guji zones in Southern Ethiopia. Nothing was said about it. The PM talked only about inflation” (Source: The Reporter 29 March 2008). This exchange between the prime minister and the opposition triggered Fortune to send its reporter to southern Ethiopia to come up with evidence of whether there is drought, as alleged.

Obviously, Addis Fortune rendered the nation sterling service when in its 29 March publication produced an article supported by pictures that dared to remind the authorities that there was drought and famine. In there, it wrote that its reporter had witnessed “an alarmingly escalating drought that caused a rising death toll of cattle and insufficient humanitarian responses by local authorities. Local people felt neglected. Experts warn that should the rains fail to fall in the coming season, the consequences will be too horrific to contemplate” (Source: Addis Fortune, The Grim Face of Drought, 30 March 2008). Instead of rolling shirts and providing assistance, government’s initial response was irritability and enormous efforts on local media and their outlets on the internet to play down the humanitarian catastrophe.

For the prime minister, dealing with inflation in parliament was much more convenient because there are two groups to blame: oil and food price hikes internationally on one side and price bidding peasants and greedy merchants at home on the other! True, that inflation has reared its ugly head around the world. The cause in most instances is the availability of cheap money, in an environment of low interest rates that has weakened the US dollar and forced the price of most commodities through the roof. Over the years, the Ethiopian government has engaged in unrestrained practice of heavy domestic borrowing from private and commercial banks. For instance, who would forget the swaggering by the prime minister a couple of years back at international experts, including IMF staff, in an attempt to legitimize his theory on the unlimited use of excess bank liquidity by the government for investment purposes? At the same time, according to survey by the government itself, the major bottleneck on the production side and to suppliers in Ethiopia have always been the continuously changing regulations and the denial or the inconsistent flow of capital to the private sector.

Has there been any warning to the government about the impending drought? In spite of its denials, mention should be made that already since the beginning of 2008, the United Nations has been sending flash early warnings highlighting that the risk of drought and famine was on the upside. For instance, in its weekly humanitarian alert on Ethiopia in early February, the United Nations alerted the government of its concern about the creeping drought and famine in Oromiya and Somali regions, as follows:

There is a concern about the food security situation in the lowland woredas of Borena zone with increased reports of pasture and water depletion. The situation is very severe in Dire, Moyale, Miyo, Dillo, Dhas, Arero, Yabello and Teltele woredas. Locust infestation in the affected woredas is aggravating the situation. Poor households in these woredas have resorted to coping mechanisms such as reduction of daily meals. Pasture reserves in the zone are over grazed, resulting in poor physical condition of livestock. Unusual livestock migration in search of water and pasture is reported from Moyale and Miyo woredas. According to CARE, deaths of livestock including calves and milking cows are reported particularly in Dire woreda. A significant increase in the price of staple foods has largely reduced purchasing power of pastoralists. Meanwhile, the Oromiya Emergency Coordination Meeting has been revitalized to facilitate effective coordination and timely response. Immediate intervention in water supply, livestock feed, human health, food aid provision and market stabilization is required.

(Source: OCHA Ethiopia, HumanitarianBulletin, February 2008)

No government official cared to pay attention to these serious warnings. In fact, most revealing of the prevailing insensitivity is the fact that government did not use even the forum for the review of its tri-monthly performance of the federal government, which took place on 11 May. The agenda of its meetings focussed on actions to control inflation, expansion of telecommunications, road construction and generation and reliability of power supply, and raising the level of revenue from exports (EPRDF webpage, accessed on 12 June). There was no discussion whatsoever, even en passé, regarding the creeping humanitarian disaster, despite the availability of such credible early warnings. At the time, the international press dateline was not only focussed on the destruction of livelihoods and the lives of hundreds and thousands of children in the war theatre in the Ogaden, but also the areas from the southern regions up north to Shahsemene, about 200 km from Addis Ababa. In view of its endowments, the story from Shashemene and its environs should have been that of success, as in the past, for its ability to provide food for both its inhabitants and the surrounding markets.

Unfortunately, the inescapable fact is that government policy itself remains the major cause of the drought and environmental degradation. In spite of all the rhetoric and self-praise, Ethiopia has not managed to improve its backward agriculture and enhance agricultural productivity during the last 17 years. Increases in food production have so far come mainly from expansion of arable lands. Therefore, attributing the evolving humanitarian catastrophe to the failure of the belg rains alone is no pointer to lasting solutions for the country. Moreover, the present land tenure system has led to greater fragmentation of farmlands because of the regime’s single-minded interest in political control of the farming population (85 percent). In the context of such a land tenure system, government keeps on apportioning existing farmlands to meet the needs of the rapidly growing population (at a rate of 2.3 percent). This has triggered insecurity of holdings and the inevitable decline in agricultural production.


The government has now appealed for international humanitarian aid on behalf of 4.6 million people. The international planning figure has been to assist 4.5 million people. The appeal has coincided with presentation to parliament of the proposed national budget for fiscal year 2008/09. Unfortunately, there is an inordinate mishmash between the raging drought and famine and the optimistic national budget figures. The budget outline is estimated at 54.3 billion birr, representing growth of ten billion birr over the current budget, ending during the first week of next month. Interestingly, by government’s admission, 38 percent of the budget is expected to be covered through external assistance and loans. Compared to the current budget, even that shows some growth. At the same time, revenue from tax is overestimated, although the current budget has suffered a tax revenue shortfall of 4.4 billion birr, according to information provided by the finance minister in parliament a few days ago (Source: Addis Fortune, 15 June 2008).

When the new national budget estimate is viewed through the lens of current budget performance, the reality is that the new budget estimates seem loaded with unrealistic assumptions. For instance, the proposed budget does not take into account the possibility of shrinking agricultural production and their spill over effects of the current drought into next year; we know already that livestock have been decimated, at least, in two regions and farmers have lost their meagre assets. Moreover, not only the gap between revenue and expenditures are narrowed down artificially, but also the level of domestic borrowing is significantly understated. If the current budget performance is any guide, the level of external financing is also overly optimistic. The anomaly is that at this time of medium to serious threats of drought and famine in six of the nine regions of the country, the Ethiopian government expects robust economic growth! In addition, it has budgeted $400 million for its defence needs, which shows an increase of $50 million over the current budget year (Source: Reuter, 10 June 2008). Full understanding of this acrobatics in figures requires the skills of Martian!

The fact that government is not being held accountable for its misuse of foreign aid and mismanagement of the country’s resources and opportunities has neither helped our country nor gratified donors. The IMF and the World Bank have known all along that government policy has been responsible to a large degree to the present difficulties the country has been passing through. Even if we leave aside the question of its intolerant behaviour and authoritarianism, government has failed to improve agricultural productivity and manage the macroeconomy properly. Its policies have fuelled up inflation. Headline inflation standing at 26 percent at the time of writing is good indicator of government’s failure to keep inflation within manageable levels. Similarly, this has also severely widened the deficit in the country’s balance of payments. For a long time, many citizens have argued (including this writer), that Ethiopia’s economic growth is hardly sustainable, given that productivity growth has remained terribly insignificant and democratic governance, as the most fundamental prerequisite for development, has been lacking (see “THE CASE FOR MUCH-NEEDED CHANGE: IS ETHIOPIA’S ECONOMIC GROWTH SUSTAINABLE?” http://www.abugidainfo.com/?p=3571 February 05, 2008).


To change Ethiopia’s situation for the better, the government would need to take the following measures: (a) free the peasantry from its parochial political control; (b) revamp the current land tenure system, including allowing land to be used as collateral; (c) pursue improved environmental approaches in the agricultural sector, instead of continually exposing virgin lands through unproductive and wasteful farming practices; (d) exert efforts to get the composition of development aid to agriculture to include input components, instead of continued reliance on food handouts (e) widen political space and public participation; free society from coercion and draconian controls; (f) free the media from unnecessary control and censorships; and (g) free the internet from blockage by censors; government should also honour its pledge to invest in internet connectivity. Surely, these measures do not go far enough; for instance, they do not even deal with the private sector, trade, financial sector reform, etc. Some of them are also beyond the scope and tolerance of the regime.

In the context of the drought, mention should also be made here that the present moment is more propitious to implement sound and meaningful reform measures. Among other things, there would be change of guard in the White House. Ever since 2007, after 25 years of retreat under pressure from conservative administrations of Ronald Reagan and Margaret Thatcher, the World Bank has made a turn around in its policies pledging to provide enhanced support to agriculture, (Source: World Bank, World Development Report 2007). The Bank’s change of direction and focus has also been given prominence in interviews by its President Robert Zoellick. Bilateral donors’ support to agriculture has for a long time avoided provision of aid for inputs, especially fertilizers.

Although clearly input producers have cheered the dwindling input component from foreign aid, the complicity of donors in that is shortsighted. In fact, it has likened their assistance to date, generous though, to providing fish to a hungry man, instead of fishing equipment. In the light of this, it is imperative, therefore, that a serious government should first reform itself, its behaviour and recommit itself to live and govern by the rule of law. Only then, could it have the power of suasion and credibility to persuade and plead with bilateral and multilateral donors to listen to us and give—say for a period of three years—free provision of fertilizers to individual farmers. This would surely go a long way in enabling farmers, especially those emerging from drought conditions, to work harder, knowing that after three years they would be on their own. This would motivate them to use the land properly (with help of extension workers) and improve agricultural production. With the price of oil and oil products continually rising, no sensible person would argue that poor farmers in Ethiopia could afford to buy fertilisers with their meagre or non-existent resources.

Event without that detriment, the Bank in its 2008 World Development Report has acknowledged the failure of seed and fertilizer market, which it said is ”pervasive in Sub-Saharan Africa because of high transaction costs, risks, and economies of scale. As a result, low fertilizer use is one of the major constraints on increasing agricultural productivity in Sub-Saharan Africa.” In no time, donors would realize that they would be spared of doling out taxpayers monies in the form of food handouts in perpetuity. The only result would be the perpetuation of dependence and widespread poverty. If they take such actions, there is no way that such improvement in Ethiopian agriculture would threaten their farmers at home and their niche in the global market. While it is not realistic to expect the Bank to do that on its own, there is need to launch campaigns to national governments, non-governmental organizations and the private sector.

Given that our government’s credibility problem and its lack of commitment to democracy is a major hindrance to undertake such a venture, it is understandable if donors’ instincts urge them to err on the side of caution, at best, and reticence at its worst. Nevertheless, whatever prompted the World Bank to express its frustration this late, for now it has put emphasis on the real issue with a new tone. On a visit to Addis Ababa this week, Justin Lin Yifu, chief economist and senior vice-president of the World Bank, said, “Given good weather conditions, diverse natural resources and huge labour in Ethiopia, I don’t think it would be difficult to bring about a real change in the country” (Reuter 18 June 2008).

  1. Ketema
    | #1

    It is nice to know that our Ethiopia of tomorrow will listen and consult all of us to improve the standard of living of our people. I enjoy your article for its clarity and no non sense approach.
    Please give us a comparison with others which were in our situation. Keep up the good work sooner or later it will seep in.

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