Ethiopia: Abiy is wrecking the economy [and the nation as well]

Ratings agency S&P Global cut Ethiopia’s sovereign rating to ‘CCC+’ from ‘B-‘ on Friday, citing heightened political instability and delays to debt restructuring” (Street Insider – ‘S&P pushes Ethiopia’s ratings into junk territory on delayed debt restructuring’ 24.09.2021).

It’s been years upon year where the financial forecasts and the economy of Addis Ababa have been steaming ahead. The one republic and nation in the Horn of Africa, which has always looked golden. There haven’t been a year or a report, which haven’t been positive. So, within a three year span in power, Prime Minister Abiy Ahmed Ali and his allies in the Prosperity Party is destroying this.

The Prime Minister has already caused a famine, weaponized humanitarian operations in the republic and ordered a war to consolidate all power. The PM have ordered his political enemies to their death or detained. There is no middle-ground and this sort of society isn’t bringing prosperity or stability. Anyone can at any time become an enemy and depending on how paranoid the PM is. If he gets total paranoia. The closest allies and leaders might end up like the enemies who are behind bars already.

This is combination of the freezing accounts of Tigrayan citizens, closure of businesses and profiling is also causing damage of the economy. As much as the state is becoming sanctioned and targeted by the United States of America. There is no wiggle-room and trust in the ruling regime.

The Prime Minister is now destroying the economy to a level in which investments have gone from the graded as B- which can be described as “highly speculative”. The PM has moved the Republic to grade of the CCC , which means that the economy is “extremely speculative”. For an investor this means there is a higher risk for defaulting on loans and therefore, deemed as “junk”. This means the state isn’t trustworthy and it is huge risk to invest there.That is not the sort of financial foresight any head of state wants for their republic. However, that is what Abiy has succeeded in doing.

The PM has now officially gone to the lowest level, However, the PM and PP has already depleted and destroyed the prospects of it’s economy with this internal war. It is costly to import weapons, military technology and ammunition. The costs are not only on the battlefield, but on the spreadsheet. This costs money and empty coffers. At one point the bank-accounts are scrapped and the state doesn’t have enough revenue to cover for re-occurring debt.

Abiy has to go to creditors and get the debt restructured. He has to prove he can make a plan to fix the budget and add revenue to the state. Because, at the moment the economy is bleeding. Just like the PM is doing in several of the state’s as well. There is so many people who are struggling in Oromia, Amhara, Afar and in Tigray. There are starvation, lack of basic commodities, medicines and water/electricity. Therefore, citizens are already struggling because of the war and now the state will struggle financially as well.

It is not like the PM has lots of friends to cover his debts and restructuring of it. This will not be easier when the government is sanctioned and that will make it even worse. The PM and PP has failed the republic and the nation itself. Not only the selfish war for own personal power, but risking so many lives to gain that. Therefore, long after Abiy is out of power. These efforts and usage of power will haunt the halls of power. Because, the state will has to rebuild and restructure itself to be a viable entity, which it clearly isn’t at this point. That is why it’s deemed as “junk” and the violations of human rights in combination with crimes against humanity will have to be addressed as well. It is all connected and the PM cannot run away from all the pain he has ordered on his citizens. Peace.

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