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In mid-February 2018 amid increased protest and unrest in Ethiopia, the then sitting prime minister, Hailemariam Desalegn, announced his gracious and surprising resignation. On April 2, 2018, Dr. Abiy Ahmed was confirmed and sworn in by Ethiopian parliament as the new Prime Minister of Ethiopia.
Dr. Abiy is now the chairman of both the ruling EPRDF (Ethiopian Peoples’ Revolutionary Democratic Front) and the OPDO (Oromo Peoples' Democratic Organization), which is one of the four coalition parties of the EPRDF.
The new prime minister is just 42 years old and the youngest head of government in Africa. Since April, the world has been watching in fascination as he worked to address the country’s challenges head on. Challenges remain, but here at RENEW, we are grateful for the changes we see, and the increasingly positive impact on the business environment.
Some of the highlights from the last four months include:
- Acceptance Speech– Dr. Abiy’s acceptance speech sparked optimism and received an overwhelmingly positive reaction from the Ethiopian public including some opposition groups inside and outside Ethiopia. - Full English Transcript of Ethiopian Prime Minister Abiy Ahmed’s Inaugural Speech (All Things Ethiopia - April 2, 2018).
- Charm Offensive- In the weeks after his inauguration, Dr. Abiy launched a “charm offensive” in an effort to defuse tensions; he toured the country, freed prisoners, visited the main regions where protests have erupted, restored internet access in the restive Oromiya region and shut down one of the most infamous prisons where dissidents were jailed. - Abiy Ahmed: Ethiopia's first Oromo PM spreads hope of reform (France24)
- Reducing Trade Barriers- He is working to lower trade barriers with Djibouti, Ethiopia, Kenya and Sudan. - Ethiopia ready to ratify Africa free trade deal after Kenya, Ghana (Africanews.com - May 14, 2018)
- Ending State of Emergency– On June 5, 2018, he ended the state of Emergency. – Ethiopia Lifts State of Emergency Two Months Early (CNN - June 5, 2018 )
- Egypt Relations- The PM was in Egypt this week holding talks with President Sisi. The talks appear to have gone well and eased tensions. President Sisi asked Dr. Abiy to swear to God that the dam will not hurt Egypt - “I swear to God, we will never harm you,” was how Dr. Abiy responded. Egypt, Ethiopia Agree to Settle Differences over Nile Mega-Dam (Reuters – June 10, 2018)
- Oil- Ethiopia is to start extracting the first ever crude oil deposit from Ethio-Somali Region as of tomorrow, The Reporter learned. To recap what happened back in March, 2018: Poly-GCL, a Chinese company engaged in oil and gas exploration and development project in the Ethio-Somali Regional State, discovered oil and natural gas deposits. The amount of gas reserve discovered by Poly-GCL is estimated to be 6 to 8 Trillion Cubic Feet. Ethiopia to Start Extracting Crude Oil (The Reporter – June 27, 2018)
- Opening its Economy- In a major policy shift, the government is set to loosen its monopoly on several key economic sectors, including aviation and telecoms. The government will also allow “outright full privatization” in several other sectors; such as logistics and printing. Ethiopia's move to open its markets has been hailed as a seismic policy shift, but analysts say the new government had little choice after years of tight control took a toll on the economy.
- Eritrea and Ethiopia Make Peace- The Ethiopian PM traveled to Eritrea to make peace. Since then, Ethiopian Airlines flights have been restored and the Eritrean Embassy in Addis has reopened. How Ethiopia and Eritrea Made Peace (The Economist – July 17, 2018)
- FOREX- Dr. Abiy is getting very creative with trying to attract forex from remittances into the country. First, he has offered an attractive deal for diaspora that will come to Ethiopia between August and September. Second, he has set an Ethiopian Diaspora Trust Fund they will use for development. Ethiopia's Premier to Woo Diaspora Investors as He Visits U.S. (Bloomberg – July 26, 2018) and Ethiopian Diaspora Trust Fund Account Officially Operational (Ethiopian Embassy – UK – July 18, 2018)
- Diaspora- Dr. Abiy recently conducted a roadshow across the US - and was very well received by the Diaspora. Abiy Ahmed Meets the Ethiopian Diaspora (The Atlantic – August 4, 2018)
The challenges ahead of Ethiopia and Dr. Abiy include managing foreign exchange and inflation amidst a growing economy, managing international relations with Ethiopia’s neighbors, and controlling internal resistance from former leaders resistant to change. At RENEW, we remain bullish on the investment potential of Ethiopia and its long term growth.
First Image Source: France24: Abiy Ahmed: Ethiopia's first Oromo PM spreads hope of reform
Second Image Source: The Atlantic: Abiy Ahmed Meets the Ethiopian Diaspora
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