In November 3,2021 the now leveled as terrorist group, the TPLF launched military offence against the Ethiopian army stationed in the northern command and abruptly while the soldiers were in their barrack at night, it committed crime by massacring them.
Responding to the junta blatant attack, the army made reoffence against the junta rebels and within three weeks it defeated and recapture Mekele town which is the capital of Tigray. Top TPLF officials either killed or jailed and later on the federal government appointed a provisional government which comprised the local residents.
However, while the army stayed there, local mercenaries backed by the Junta remnants occasionally made military offence against the army. Even some times ambushed the military convoy and threats the movement.
But side by side keeping law and order in the region, the government made huge efforts to rehabilitate the economy and re-establish institutions. It allocated budget not only for recurrent cost but also for capital to repair infrastructures demolished during the war. The government also spends a lot of money to reopen electric and telephone services which were destroyed by Juntas. Civil servants also resumed their jobs. In general, while the army stayed in the region the government allocated more than 100 billion Birr apart from the humanitarian aid.
Prime Minister Abiy Ahmed (PhD) recently announced that, while the army left the region in order to give chance the Junta and its recruits to think over the situation, it announced unilateral cease fire and left millions of litters of fuel and gasoline in the stations, rations and edible oils to protect the public from misery. But instead of respecting the peace offer, the Junta made new military offence and intruded towards Afar and Amhara regions.
According to a recent UN update, more than 2.2 million people have been displaced in the two regions.
The continuation of conflict presents a further roadblock to an economy ravaged by the COVID-19 pandemic. Analyst who specializes in the Horn of Africa, says that spending on the war effort “has really negatively impacted Ethiopia’s capacity to access dollars”, and has caused the exchange rate to deteriorate.
It is not clear how much the war has cost but Trading Economics forecasts military expenditure will reach higher than the previous years.
The UN secretary general Antonio Guterres said the conflict had “drained over a billion dollars from the country’s coffers”.
During the military assault, the junta bandits, in the two regions killed innocent civilians, domestic animals and demolished residential houses. They also destructed churches and mosques through artillery fires. The bandits looted and destructed hospitals, health centers and schools.
Currently, millions of students in both Amhara and Afar regions are forced to interrupt their education and others left their villages to the surrounding areas.
Such devilish acts incur heavily economic cost on the nation.
The Ministry of Trade and Industry estimates that the closure of factories and mining sites in Tigray since early November is costing the Ethiopian economy around 20 million dollar per month, while communications blackouts continue to obscure the scale of the damage to industry in the region itself.
According to some sources, the war mounting insecurity posed the greatest threat to Ethiopia’s economic recovery and debt affordability. Like a number of sub-Saharan African nations, Ethiopia has borrowed heavily from creditors.
Some argue that these deals could lead to further issues for the country as it seeks to restructure its debt under the G-20 common forum in the coming round of talks. Experts placed Ethiopia’s B2 credit rating which is viewed as speculative and high-risk on review for downgrade. It reflects the ratings agency’s concerns about the requirement for Ethiopian authorities to engage with private creditors on equal terms.
Irmgard Erasmus, senior financial economist specialized on African Economics, highlighted that Ethiopia’s access to financing was deteriorating.
It comes as reputational risk has soared in the aftermath of the brake out of war in the northern part of Ethiopia which curbs budgetary support from international stakeholders.
Experts suggested that even if Ethiopia successfully restructured its bilateral and multilateral loans, economic disruption and raised security spending would pose longer term threats, but the prospect of commercial credit restructuring seems take some time in the future.
The war has prompted several companies to show reluctance operations in the region, including European and Asian textile, agribusiness, and manufacturing firms.
The Pangea-Risk report noted that security-related expenditure had contributed to a notable deterioration in the fiscal balance and Ethiopia’s foreign exchange reserves.
Apart from the macro-economic impact, the war posed a negative consequence on farming, farming production and farmers lively hood at large.
As it is understood more than 80 percent of the Ethiopian population relied on agriculture for it is living. In Tigray region farmers because of forceful military recruitment left their farms to the war front and their land is more or less remained idle.
And the already fragile agricultural economy of the region will be disturbed. Farmers in the next season might suffer from lack of food. In fact, even currently more than 3 million people depends on the foreign handouts for their living in the region.
Farming also disturbed in the Amhara region. A significant number of farmers are unable to plough their farm because of displacement. Some of the crops produced by farmers in the region is being looted by the Junta bandits this again critically shatter the farmers livelihood particularly in the winter season.
However, to overcome the problems which affects farmers livelihoods the SASKAWA global 2000 Ethiopia, the Japan based international non-governmental organization with the cooperation of the Ministry of Agriculture is working to grow crops in other regions of the country in order to compensate the looted and the demolished agricultural farms. Such kind of effort helps farmers to rehabilitate their life and to start from new.
On the other hand, the pastoral community living in the Afar region also lost their cattle due the war and unless they recover from the crises their livelyhood will be precarious. Therefore, to bring long lasting solution to the crises which critically affects the nation economic life, bringing peace should be a priority agenda by defeating the Junta once and for all.
BY ABEBE WOLDE GIORGIS
THE ETHIOPIAN HERALD NOVEMBER 2/2021
