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Author: Yeabkal

Leather Exports Face a Hard Floor as Officials Try to Patch Forex Crunch

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Ministry of Industry (MoI) officials have taken exporters by surprise, imposing minimum export prices for 12 leather products, a move they say is designed to raise foreign currency earnings and fight under-invoicing. The directive, issued by State Minister Tarekegn Bululta to the Ethiopian Customs Commission, came into effect without giving exporters much time to react, leaving many unable to meet their contractual obligations.

Under the new rules, 12 types of semi-processed and finished leather should be sold abroad at prices that meet or exceed specific thresholds. Semi-finished sheep wet blue skins, for instance, now carry a minimum price of 24 dollars a dozen, while goat wet blue is set at 15 dollars. Finished leather prices range from 0.70 dollars a square foot for cattle lining to 1.25 dollars for sheep dress glove leather. One of the higher-end materials, finished sheep upper, often used in fashionable shoe manufacturing, is priced at 1.20 dollars a square foot.

The Customs Commission’s enforcement of these new floor prices created a new challenge for exporters struggling with shifting global conditions. Many had negotiated supply contracts at prices below the newly mandated minimums, putting them at risk of contract cancellations. Exporters say they feel caught off guard, as no clear transitional period was provided to adjust their existing deals.

Ministry officials blame persistent discrepancies between export volumes and foreign currency earnings for the intervention. In his half-year report to Parliament, Melaku Alebel, the minister, disclosed export volumes from the manufacturing sector reached 95,167tns, equal to 80.93pc of the 117,586tns target for the period. This represents a marked jump from 74,954tns exported during the same period last year.

However, revenue has not kept pace with that increase in volume. Foreign currency earnings of 149.33 million dollars, amounting to just 58.18pc of the projected 256.69 million dollars, were 9.02 million dollars higher than the same period last year. Officials argue that the gap uncovered how lower prices and invoice values have eroded the sector’s potential revenue.

“Export volumes are rising, but our revenues are not,” said the Minister. “We believe the biggest factor here is the reduced product prices and inaccurate invoices. The minimum pricing strategy is meant to address that imbalance.”

In the past six months, 20 tanneries generated 13 million dollars in combined export revenues.

Rising logistics costs and extended maritime routes have exacerbated the situation. Shipments that once took 45 days to reach European markets could now take up to 65 days, and security threats along the Red Sea corridor are often blamed for these delays.

“We chose this sector because of its high capital flight and under-invoicing,” said Tilahun Abay, strategic affairs lead at the Ministry. “The plan is to review and adjust these prices in line with international market conditions.”

Both officials and industry operators agree that the leather industry has been in decline for quite some time, especially in the quality of raw materials and revenue generation.

“We believe this policy can help reverse that downward trend,” said Tilahun.

Industry insiders say the leather sector’s overall performance has suffered under tough global conditions, but some also point to practices within the sector itself. According to a veteran exporter who asked for anonymity, he signed contracts before receiving news of the price floors, creating a situation where he may have to renege on his deals. He associates the season with lower-quality leather due to weaker local purchasing power and greater dependence on alternative materials like silicone.

“We don’t have any choice but to export lower-grade leather,” he said. “However, that lower grade does not meet the new minimum price.”

According to this exporter, foreign investors who have entered the leather industry in recent years have contributed to stagnant market conditions and a perceived drop in quality. He recalled that before the influx of foreign capital, domestic exporters could collectively surpass 100 million dollars in annual exports. The sector now struggles to earn even 30 million dollars annually despite foreign investors’ participation. His company once exported up to 10 million dollars worth of finished leather annually but now barely hits one million dollars.

He also criticized the Ministry for not including enough stakeholder input before enforcing the new rule.

“When dealing with natural products like leather, you’re bound to get a percentage of lower-quality raw materials,” he said. “I would estimate about half of the raw hides we buy from local traders are low grade, which is impossible to sell at higher prices. Sometimes, to keep your business running, you have to sell below the new floor price.”

The question of how grades should be treated under the new regulation worries tanneries of all sizes. The Ministry’s letter to the Customs Commission did not differentiate among the seven grades of finished leather, even though top-tier products can be twice as expensive as lower-grade materials. Many exporters are concerned they will be forced to store subpar leather or risk shipping it at a loss.

“Quality variations are important,” said an exporter who has dealt in various grades for years. “You can have top-grade leather commanding a price 100pc higher than the set minimum. Meanwhile, lesser grades go for much less. That difference hasn’t been taken into account.”

Others in the industry appear cautiously optimistic.

Bruk Haile, deputy general manager of Bahir Dar Tannery, believes the new initiative is essential for boosting foreign currency earnings. However, he doubts its implementation and warns that strict controls could unintentionally delay export processes.

“Precise and swift execution is needed to prevent disruptions to delivery timelines,” he said.

Bruk criticised the lack of clarity about leather grades, stating that the rules fail to address the different types definitively. He argued that branding and marketing often involve varying product names, which the Commission does not recognise. His company exports up to three million dollars worth of leather annually, focusing on higher-quality grades up to grade four, less affected by price changes.

For Dagnachew Abebe, secretary of the Ethiopian Leather Industries Association (ELIA), the floor price is the right step. He observed a price gap between domestic and foreign direct investment players, which he believes could be rooted in questionable pricing practices.

“We see export numbers going up, but the revenues have been stagnant, which suggests under-invoicing,” he told Fortune. “If we want to bring more foreign currency into the country, we have to deal with that issue directly.”

Dagnachew believes that price regulation of this kind is not new. He recalls that the National Bank of Ethiopia (NBE) used to follow a similar approach.

“It brought some results,” he said.

During recent discussions with the Ministry of Industry officials, exporters voiced concerns about the contracts they had signed before the rule’s introduction. Ministry officials acknowledged that these specific deals might be treated as exceptions, but how that will be applied remains unclear. Some exporters also contended that foreign-owned tanneries, importing semi-processed leather and exporting finished products, should face a higher minimum price to reflect the added value.

Yet, some experts caution that the new rules lack essential detail and have arrived with little runway for exporters.

“They’ve the right to sell lower-grade products at reduced prices,” said leather technology specialist Kebede Amede, arguing that the government’s strategy overlooks major benchmarks in leather marketing. While he supports the measure, he doubts about its practicality. “Compliance is also tough because you’d have to inspect export-ready stock for quality. That’s not always practical.”

Hibret Bank Names Tsigereda Tesfaye as President During Shifting Industry Dynamics

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Hibret Bank’s board of directors, chaired by Samrwit Getamesay, has nominated Tsigereda Tesfaye as its sixth president, submitting the request for regulatory clearance to the National Bank of Ethiopia on January 21, 2025.

Tsigereda emerged from a final shortlist of three candidates and will become the third woman to head a bank if approved, following the appointments of Emebet Melese (PhD) at the Development Bank of Ethiopia (DBE) and Melika Bedri at ZamZam Bank. She is set to replace Melaku Kebede, who stepped down months ago after nearly two decades with Hibret Bank and previously served in senior roles at Zemen Bank.

A graduate of Addis Abeba University, he was previously a senior executive at Zemen Bank before returning to Hibret in top leadership. During his tenure, he oversaw the launch of multi-channel banking services, introduced interest-free banking, and implemented a Broadband Local Money Transfer system. He also guided the Bank’s early push into technology, championing an ambitious internal systems upgrade to boost efficiency.

Nonetheless, in his final year, Hibret Bank suffered considerable losses from its foreign currency earnings following the liberalisation of the forex regime in July last year.

However, Hibret Bank reported robust growth in the 2023/24 fiscal year, as net profits reached 2.3 billion Br and revenue rose by 28.1pc to 13.23 billion Br. The Bank’s total assets climbed 16pc to 96.58 billion Br, while deposits grew by 15.6pc to 74.65 billion Br. Loans and advances stood at 68.89 billion Br, with earnings per share (EpS) hitting 383 Br. During the year, Hibret opened 26 new branches, expanding its network to 499.

The Bank’s equity also grew, increasing by 3.27 billion Br to 12.65 billion Br. The Bank also invested 50 million Br in equity in the Ethiopian Securities Exchange (ESX), adding to its broader strategy of strengthening its market presence.

Acting president since August 2024, Tsigereda brings three decades of banking experience. She did her undergraduate studies in business management and an MBA in finance from Addis Abeba University. Her career began at the Construction & Business Bank (CBE) in 1995, where she rose to lead its general accounts division by 2003. She moved to Dashen Bank as head of credit analysis before joining Hibret Bank in 2004.

Over two decades at Hibret, she held successive roles in credit and risk management, advanced to assistant vice president for credit management, and later became senior vice president of business and operations.

Since joining the industry, Tsigereda has observed that senior leadership often remains out of reach for many women. According to her, the slow progress in the banking industry echoes concerns shared by peers. Melika has led ZamZam Bank S.C. for four years, having formerly served as Chief Financial Officer (CFO) at the Commercial Bank of Ethiopia (CBE). Emebet assumed the presidency of the DBE after briefly heading Nib Bank last year.

Underrepresentation of women persists in the banking industry, according to financial consultant Tilahun Girma.

“The sector has long been governed by the belief that men are more suited to lead banks,” he said. “Recruitment policies need reform.”

He urged institutions to promote in-house talent.

Tsigereda credited her ascent to commitment and perseverance, remaining at Hibret Bank despite offers from elsewhere.

Colleagues say her decision to stay at Hibret Bank through demanding times reflects her deep commitment to the institution. She played an instrumental role in strategic initiatives, especially in risk management, which they regard as critical for the Bank’s growth. Her continued presence over the years has enhanced her reputation for reliability and expertise, qualities that, individuals close to her believe, will help her guide Hibret Bank through technological shifts and heightened competition.

“I plan to advance the Bank’s vision, prioritising digital expansion,” she said.

Ethiopia, Djibouti Trade Blame Over Deteriorating Corridor

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The Ethio-Djibouti transport corridor, a vital trade route, is facing severe problems due to deteriorating infrastructure, outdated vehicles, and regulatory disputes, with both sides blaming each other for the issues.

A key trouble spot is the 143km road between Dikhil in Djibouti and Galafi on the Ethiopian border. Flood damage has left the road filled with two-metre-high gravel, making it hazardous for drivers and damaging trucks.

Dejene Luche, representing the Ethiopia Cross Border Transporters Confederation (CBTC), criticised the lack of improvements to the corridor, calling it “one of the biggest hassles.” Dejene, also general manager of Yegna Hilm Cross Border Freight Association, which operates 150 trucks, says that the poor condition of the road has caused damages to vehicles and drivers face risks.

Tesfaye Abebe, a truck driver with nine years of experience, described the road as life-threatening, with every trip posing serious dangers.

Djiboutian officials defended their efforts to repair the road but blamed Ethiopian authorities for allowing trucks to exceed the 40-ton weight limit, often carrying over 70 tons. Mohammed Ali, from the Djibouti Corridor Operation team, argued that overloaded trucks are a major cause of the damage. “Recklessness and lack of regulation by Ethiopian authorities is why the road is in such a state,” he said.

The Djiboutian government has completed 42km of repairs and plans to enforce stricter regulations once the remaining 58km are finished. Officials also cited climate conditions and the road reaching its lifespan as contributing factors.

The Ethiopian Roads Administration (ERA) rejected the accusations, claiming the government enforces strict load capacity regulations on trucks.

Sisay Bekele, deputy head of corporate affairs at the ERA, dismissed Djibouti’s claims about overloading trucks causing road damage. He says that Ethiopia enforces strict axle load regulations to protect roads in both countries.

“Weighbridges are being strengthened nationwide, particularly in busy export-import corridors,” Sisay said. He argued that trucks exceeding weight limits have been held up in Awash, proving that controls are in place. Additionally, an automated overloading detection system is being implemented, according to him. “We are safeguarding not just Ethiopia’s roads but also Djibouti’s,” he added.

The regulations restrict a truck’s three rear axles to a combined load of 56 tons, while banning vehicles with four rear axles.

Djibouti’s ports handle 95pc of Ethiopia’s imports, with 7.6 million tons of goods entering Ethiopia through the ports in the first half of this year. However, a bilateral agreement covering transit, transportation, documentation, and tariffs remains unrevised, with a July 2025 deadline approaching.

Freight forwarders have voiced complaints over bureaucratic delays. Mulugeta Assefa, board chairman of MACCFA Freight Logistics, cited persistent issues with pre-clearance and transit, warning that any decline in Djibouti’s port competitiveness could impact Ethiopia’s economy.

A key issue is the disparity in customs working hours. Djibouti customs operates 24/7, while Ethiopian customs does not. “This costs Ethiopia the equivalent of 56 working days annually,” said Elizabeth Getahun, president of the Ethiopian Logistics & Sectoral Association (ELSA).

A trilateral agreement between Ethiopia, Djibouti, and South Sudan also remains stalled, according to Djiboutian officials. Ethiopia has resisted using its route as a trans-shipment point.

Syad Ali, coordinator at the Djibouti Chamber of Commerce, said that Ethiopia’s reluctance has hindered South Sudanese trade opportunities. Currently, South Sudan relies on Mombasa (Kenya), located 1,700km from Juba, for its imports and exports.

Sisay stated that agreements with South Sudan are in place for constructing a border-crossing road. The project, funded by a 738 million dollars loan agreement with South Sudan, aims to improve transport routes, boost trade, and ease logistical hurdles. Repayment will be made in cash and crude oil over 10 years.

Port operations remain a vital revenue source for Djibouti, but declining competitiveness poses risks. Djibouti’s ranking on the Container Port Performance Index (CPPI) plummeted from 26th to 379th out of 405. Over the past year, 21 million tons of essential goods, including 814,000 tons of sugar, 1.9 million tons of fuel, and 2.2 million tons of fertilizer, were imported through Djibouti’s ports. Geopolitical instability, infrastructure problems, port congestion, and rising transportation costs have further strained the corridor.

Ethiopian officials blame a 20-year-old agreement with Djibouti, which they say hinders efforts to modernize logistics. The government is pushing for revisions to address transit times, transportation modes, operational procedures, customs clearance, and tariffs, planning to increase private sector participation in multimodal logistics.

Transport consultant Mitiku Asmare says that the 10-year strategy launched by the Ministry of Transport & Logistics (MoTL) in 2018 will strengthen Ethiopia’s logistics sector. However, he said progress has been minimal. “Digitising customs systems, cargo tracking, and transit monitoring to improve efficiency and competitiveness are very important,” he said.

A 2023 logistics performance study scored Ethiopia 2.94 out of five, with a 53.9pc ranking in areas such as customs efficiency, infrastructure, logistics service quality, tracing and tracking, ease of international shipping, and delivery time. The lowest performance areas were infrastructure, international shipment competitiveness, and delivery times.

Mathewos Ensermu (PhD), a logistics expert and co-author of the study, attributed the poor infrastructure to transparency issues at the federal level and the absence of an autonomous oversight body.

He says that Djibouti’s reluctance to establish the proposed Ethiopia-Djibouti Management Authority has left many issues unresolved along the corridor.

“The logistics supply chain is only as strong as its weakest link,” he said, warning that these weaknesses could severely impact the country’s economic ambitions.

Parliament Moves Closer to Establishing Certified Accountants Institute

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Parliament is moving close to establishing the country’s first institute for certified public accountants and auditors, as a draft proclamation was submitted for ratification following a final public consultation last week.

The legislation aims to overhaul the country’s accounting and auditing standards, addressing the acute shortage of internationally certified professionals and improving the credibility of financial practices. The law will also ban regional offices from certifying accountants and auditors to ensure reliability and consistency across the country.

The Ethiopian Institute of Certified Public Accountants, once established, will focus on training and certifying professionals in International Financial Reporting Standards (IFRS).

Stakeholders argue that this is a critical move as the country opens its capital market and seeks to attract foreign investors who demand reliable, globally certified auditors for financial decisions.

Prepared by the Accounting & Auditing Board of Ethiopia (AABE), the institute will initially be overseen by the Board which is accountable to the Ministry of Finance (MoF) for seven years before transitioning to self-governance by auditors and accountants. Fikadu Agonafir, director of AABE, acknowledged that “auditors are not capable of being sole administrators for the time being.”

Currently, the country has only 500 internationally certified auditors, with less than half licensed by AABE. Legal head Samson Negash says that there is an urgent need for reform. “There is a severe shortage of capable professionals in the country,” he said.

The institute is expected to improve regulatory oversight, aligning operating procedures with global standards such as the International Standards of Auditing (ISA) and the International Public Sector Accounting Standards (IPSAS). It will have the authority to regulate, certify, and oversee accounting students and professionals, ensuring compliance with the International Federation of Accountants (IFA).

The governance structure of the proposed institute includes a general assembly, an administrative council, an accountancy education committee, a discipline and audit committee, and executive bodies. The general assembly will oversee strategy formulation, approve annual budgets and bylaws, and hire independent auditors.

The administrative council will include six certified accountants, five government and academic officials, and a president and vice president, both of whom must be accounting professionals.

The institute’s funding will come from annual membership fees, school fees, government sponsorships, and donations.

However, participants during the consultative meeting questioned the availability of professionals capable of training and examining at international standards and the credibility of certifications for global recognition.

A scattered licensing system and overlapping mandates between the AABE and regional auditing bureaus were raised as major issues. Fikadu says that there are ongoing discussions with regional states to transfer full licensing authority to AABE. The general assembly will determine whether regionally licensed accountants or AABE-licensed auditors will need additional certification.

“It’s a work in progress,” Fikadu stated.

The bill also proposes a discipline tribunal comprising certified accountants, a member of the Federal Lawyers Association, and three government officials. This tribunal will have the authority to suspend, revoke, or repeal certifications and publicly announce disciplinary actions.

Participants voiced worries about the potential human rights violations of publicly shaming temporarily suspended professionals. To address this, an appellate committee will be established by the general assembly to handle disputes and appeals.

Gashe Yemane, CEO of Auditors Service Corporation, says the absence of a reputable national institution has forced companies to rely on international firms for auditing services. He says overlapping mandates between the AABE and regional auditing bureaus has led to inconsistent licensing requirements.

Neighbouring African countries, such as Kenya, Uganda, Rwanda, and Tanzania, established certified accountants institutes in the 1970s and 1980s. Kenya, with a population of 55 million, established its institute in 1978 and now has 45,000 certified accountants.

According to Tesfa Tadesse, an auditing consultant, Ethiopia’s accounting profession has lagged behind. He questioned who would oversee the quality of certified public accountancy and whether there are enough qualified professionals to ensure fair assessments within the institute.

Yidnekachew Gezahegn, a lecturer at Dilla University worries about the high cost of international certification. He stated that many aspiring professionals have abandoned certification efforts due to unaffordable costs.

“For years, the country moved forward with principles but lacked uniform standards,” Yidnekachew said. This inconsistency, he says, has resulted in overvalued and undervalued financial and tax audits performed by auditors.

“Auditors have long been overlooked,” he said.

Shimelis Adugna, Unyielding Force in Ethiopia’s Humanitarian Struggles, Dies at 89

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Few understood the deep scars of famine as keenly as Shimelis Adugna, whose personal rituals hinted at the hardships he witnessed. Leftovers never seemed an option on his plate. Instead, he measured out his portions and cleared them with dutiful precision. This habit, shaped by the lessons he drew from serving as Commissioner of the Relief & Rehabilitation Commission (RRC), followed him for much of his life.

Colleagues observed his meticulousness. They believe it likely came from a time when every grain of rice or a scrap of food could save a life.

Shimelis’s name became synonymous with humanitarianism and voluntarism. During the mid-1970s, one of the country’s darkest chapters unfolded when famine devastated its northern regions, putting countless lives at risk. He took the lead role in establishing the Commission to coordinate the influx of international aid. He displayed a tireless resolve to alleviate people’s suffering, and he did it with the unyielding dedication that many of his contemporaries still speak about today.

Shimeles was in charge of ensuring that vast shipments of relief supplies arriving from different parts of the world reached the hands of those who needed them most. Overseeing these operations, he faced grim realities daily. He spoke about the plight of his fellow citizens with a voice that carried the weight of sorrow. His eyes brimmed with tears as he offered updates to anyone who would listen — government officials, humanitarian agencies, or curious onlookers.

Former colleagues recall that no matter how often he spoke about the crisis, his empathy remained raw and genuine. Some say this palpable emotion served as a moral call to action for everyone around him.

According to Shibeshi Lemma, who worked as the Commission’s public relations officer during those turbulent times, international aid providers sought out Shimelis, convinced that his sincerity and commitment were unmatched. They understood that beneath his calm demeanour was an unwavering drive to help people survive unimaginable hardship.

“He was trusted and respected,” said Shibeshi.

Despite the constant demands of relief work, Shimelis did not allow his responsibilities to overshadow his life at home. He was, by all accounts, a devoted family man. His wife, Yeworkwuha Zewdie, and his five children had a father who guided them with calm conversations rather than lectures. Books were familiar in their household, and he instilled in his children the belief that truthfulness was a foundation of character.

His son, Brook, remembers that having convictions was not enough; one had to be ready to face the consequences of standing by them.

“That was very important to him,” said his son Brook, who remembers his father as someone with a clear set of principles.

He described Shimelis as a man who worked relentlessly, always willing to hear people out.

“His emotions were always on display,” Brook said. “Tears would roll down his cheeks when people shared their pain.”

That compassion left a lasting mark on the family, teaching them to lend an ear to others, respect their needs, and offer help whenever possible. Brook recalled how people in need never required any reference or formal introduction to approach his father.

“They didn’t need anyone to vouch for them,” he said. “They simply had to show up at home or his office.”

They would find a man ready to avail himself of his resources, connections, or simply his time to lighten another’s burden.

Shimelis’s public service career spanned multiple roles and institutions, illustrating his far-reaching influence. He began as a lecturer at Addis Abeba University, where he obtained his first degree. Later, he served as Deputy Minister for Internal Affairs and assumed his role as Commissioner of Relief & Rehabilitation. Throughout these appointments, he took assignments ranging from urban community development to social research and disaster relief coordination.

His reach extended beyond Ethiopia’s borders. Over the years, Shimelis held diplomatic and advisory posts with UNICEF, the United Nations Development Programme (UNDP), and the International Labour Organisation (ILO). In those international arenas, he remained the same empathetic leader he was at home, someone who believed in the fundamental dignity of all people and dedicated himself to improving their circumstances.

Friends and acquaintances describe Shimelis as a man who never wavered in his willingness to help. Even when posted as an Ambassador to India, he prioritised connecting families back home with life-saving medical and humanitarian resources. For Shimelis, no problem seemed too mundane to tackle if it could alleviate someone’s anxiety or distress.

Yayehyirad Eshetu recalled discussing the possibility of sending his father for treatment to India with classmates in the Indian Community School. Upon learning of the issue from his son, Lealem, Shimelis himself promptly reached out to the Eshetu family. He provided a list of reputable hospitals and facilitated communication through fax, demonstrating that no request was too small or cumbersome to him.

“His generosity knew no bounds,” said Yayehyirad, describing the reassurance Shimelis’s help offered at a critical time.

Such acts earned Shimeles the admiration of countless individuals, many of whom recall him with gratitude and affection.

Honesty and dedication were qualities that deeply appealed to him. He sought out people he could trust, forging bonds that emphasised integrity and collaboration. His work with the Ethiopian Red Cross, where he served as president for eight years, and with the International Federation of Red Cross & Red Crescent Societies as vice president, broadened his reach in humanitarian efforts. He was honoured with the Henry Dunant Medal, along with several other accolades, cementing his stature in the global humanitarian community.

During his later years, he continued to champion worthy causes by helping establish and lead organisations such as the Ethiopian Heritage Trust and the Addis Abeba Pensioners’ Association. Through these initiatives, he remained a public servant in the broadest sense, engaging citizens of different ages and backgrounds.

Shimelis died on December 24, 2024, at the age of 89. Colleagues and friends paid tribute to his decades of service, bemoaning that his life’s work never received the full scope of formal recognition that many believed it deserved, bar the recognition Jimma University bestowed on him. However, those who understood the importance and scale of his contributions stood by to honour him as he was laid to rest at Holy Trinity Cathedral Church. His funeral was a moment of collective remembrance, a reminder of how one individual’s quiet dedication could shape many lives.

Born in Jijiga, in the Somali Regional State, to Adugna Kasa and Muluemebet Haile Selassie, Shimelis spent part of his early life displaced by the Italian invasion. He spent five years in exile in Kenya before returning to Harer Medhanealem School and later moving on to Wingate School. He excelled academically, a pattern that continued at the Tata Institute of Social Sciences in India, where he studied Social Service Administration and was named student of the year. From there, he went to England to complete a diploma in Hospital Administration through the King Edward Memorial Fund.

Despite his serious responsibilities, Shimelis displayed a keen sense of humour. Friends recall his knack for injecting lightness into tense situations. One longtime friend, Yemane Bisrat, knew him for over 50 years and remembers how Shimelis, though he held high government positions, personally followed up on the construction of his house next door. Such unassuming kindness, Yemane said, was typical of Shimelis’s approach to public service.

Their friendship remained close for over the decades. Yemane recalled how Shimelis once stepped in to lead the delegation of elders when Yemane’s son sought his future in-laws’ blessing for marriage. Customs often dictated that these elders return multiple times before receiving approval, but the parents granted permission immediately upon recognising Shimelis. At the subsequent ceremony, butter was to be placed upon the elders as a symbol of blessing. Sensing hesitation among his peers, Shimelis volunteered to receive the anointing alone.

“It’s a moment that will stay with me,” Yemane said, describing how Shimelis used humour and grace to ease everyone else’s concerns.

In the rare moments when he could rest, Shimelis found simple joys in sports and gardening. He enjoyed tennis, played football when he could, and took pride in growing flowers. Gardening contests became a hobby, and he nurtured his plants with as much care as he dedicated to his humanitarian efforts.

In Green Energy Gridlock, Markets Alone Can’t Power the Transition

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The international community has long recognized the urgent need to reduce dependence on fossil fuels and shift to renewable energy, and in recent years many governments have pledged to reach net-zero greenhouse-gas emissions, albeit over extremely long timeframes. But they will never get there so long as they treat electricity, which is central to the clean-energy transition, like any other market good.

The green transition is driven by several factors, such as energy intensity, investment flows, consumption patterns, and distribution systems. But its success hinges on humanity’s ability to move away from “dirty” fossil fuels toward clean, renewable energy sources, particularly solar and wind. And that requires a profound transformation in how electricity is generated, distributed, and consumed.

Economists and policymakers have long framed the energy transition as a question of relative prices. In recent decades, wind and solar costs have plummeted, driven by technological advances, especially in China, where government interventions have helped scale up green industries and drive down the levelised cost of energy (LCOE). According to this widely used metric for comparing power sources, renewables have consistently outperformed fossil fuels, even before external shocks like the Ukraine war sent oil and gas prices soaring.

In theory, these developments should have expedited the global transition away from fossil fuels. In practice, however, renewable energy sources merely supplement the total power supply. Developed and developing countries continue to increase fossil fuel production and invest heavily in exploring new reserves.

The discrepancy cannot be fully explained by market forces or relative prices. Over the years, many have blamed political leaders for the lack of climate progress, especially after climate-change denialists rose to power in countries like the United States and Argentina. But this explanation, too, is incomplete.

As economic geographer Brett Christophers argues in his book “The Price is Wrong: Why Capitalism Won’t Save the Planet,” the real problem lies in the failure to confront two fundamental truths about the limitations of open markets. First, the driving force behind private-sector investment and production is not output prices but relative profitability. Second, the nature of electricity makes it ill-suited to being “governed by the market,” inevitably leading to suboptimal outcomes in the absence of massive government intervention.

Electricity, Christophers notes, aligns with economic historian Karl Polanyi’s definition of “fictitious commodities.” In his seminal work “The Great Transformation,” Polanyi argued that land, labour, and money were not intended to function within market systems. Unlike conventional goods explicitly produced for trade, commercialising fictitious commodities leads to inefficient and unstable market transactions and inevitably results in economic and social distortions.

To operate, these markets rely on extensive public intervention in the form of explicit and implicit laws, regulations, social norms, and subsidies. Such interventions create the illusion of a functioning market, even though prices and profits are ultimately shaped by public and social mechanisms.

For much of its existence, Christophers notes, electricity was treated as essential public infrastructure, with its production and distribution operating outside the market. In recent decades, the pursuit of profits has fueled a global push to unbundle and commercialise generation, distribution, and consumption. But, despite the facade of competitive markets, the sector still depends heavily on various forms of state intervention.

Electricity’s unique characteristics pose substantial challenges for the clean-energy transition. Wind and solar power are inherently intermittent, resulting in fluctuating output and price volatility. Compounding the problem, public subsidies for “green” investments can lead to overcapacity during periods of low demand, while their withdrawal often causes investors to exit the sector. Although renewable energy has become cheaper than fossil fuels, the profits it generates are low and unreliable. Christophers vividly describes this self-cannibalising dynamic, outlining how it has played out across different economies, from the US and Norway to India.

Instability undermines the “bankability” of green projects, making it harder to secure financing for renewable energy. It should be no surprise, then, that the much-hyped Glasgow Alliance for Net Zero, launched in April 2021 at COP26 and championed by former Bank of England Governor and UN Special Envoy on Climate Action and Finance Mark Carney, has already begun to falter after the six largest US banks withdrew from it in quick succession. This was before Donald Trump’s return to the White House further disincentivised such investment by issuing an Executive Order that effectively terminated efforts to achieve a Green New Deal in the US.

But the solution is not to subsidise green capitalism by derisking investments, although such measures are unavoidable if renewable energy is to remain viable. Instead, the key is recognising that electricity is not a commodity. Consequently, we should restructure all aspects of energy production and distribution, encompassing renewables and fossil fuels alike. Most importantly, achieving true decarbonisation requires governments to adopt a more proactive approach. Instead of acting as behind-the-scenes market facilitators, policymakers should take direct responsibility for producing and distributing renewable energy.

Such an approach is far from radical. Before the rise of neoliberalism, governments played a vital role in building and managing critical infrastructure, including energy systems. To facilitate the green transition, they should reclaim that responsibility. The expected private-sector profits from renewable-energy generation are simply not sufficient to drive the necessary transformation, despite the urgent global demand.

Until policymakers come to terms with this reality, their efforts to accelerate the shift to renewables will continue to fall short.

 

Inflation’s Lingering Impact, the Need for Stronger Consumer Protection

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According to Statista, a platform that aggregates vital data and provides future projections through advanced analytics, Ethiopia’s inflation trend is expected to decline steadily in the coming decades. Statista offers tools for data analysis, management, statistics, machine learning, and data visualisation. While the projection seems promising, the positive effects are yet to be felt.

In 2024, inflation eased compared to its 2023 peak, which was the highest since 2008, a year marked by the global financial crisis. However, the impact of inflation and the cost of living often takes much longer to reverse, especially in a country where the majority live below the poverty line.

According to a 2023 UNDP publication, based on data from the Oxford Poverty & Human Development Initiative, 68.7pc of Ethiopians are multidimensionally poor, with an additional 18.4pc on the brink of poverty. This means nearly 87pc of the population is highly vulnerable to inflation’s effects. For these groups, even minor price increases can have severe consequences.

Other macroeconomic factors, such as currency devaluation, rising fuel prices, and unemployment, further exacerbate the burden on the vast majority. Despite Ethiopia’s rapid economic growth, the benefits are diluted, and the cost of living continues to weigh heavily, especially in a country with a large, low-income population.

On a personal level, I now check menu prices before looking at meals whenever I visit a restaurant. Successive price hikes across eateries have made this a habit. With few exceptions, food prices seem to rise constantly. In Ethiopia, food costs are the primary driver of inflation, disproportionately affecting the majority who spend most of their income on food.

Even though inflation rates stabilised in 2024 and are projected to remain steady beyond 2025, the trickle-down benefits are unlikely to reach the population any time soon. For most, the pain of inflation will linger far longer than the data suggests.

The steady rise in non-food commodity prices also continues unabated, though it may not be as widely felt across all sectors of society. Costs for housing, automobiles, maintenance, spare parts, clothing, footwear, electronics, and other goods remain on an upward trajectory. Often, the pricing of these items seems unjustifiable. Imported commodities frequently cost two to three times more than in their countries of origin. Used cars, manufactured three to four decades ago and no longer in use in their home countries, are sold at exorbitant prices, with values continuing to climb even after years of service.

I often wonder what market forces justify such prices. While I am neither an economist nor deeply researched in the field, I suspect hidden hands, beyond the market’s invisible force, manipulate situations to maximise profits. In Freakonomics, a book by economist Steven Levitt and journalist Stephen J. Dubner, the authors show how fear influences consumer behaviour, often exploited by traders and middlemen through dubious tactics.

A telling example is the Sunday vegetable market in Addis Abeba. One weekend, I went to the Ayat Sunday market to buy groceries. My motivation was freshness rather than price, though I expected some savings compared to local neighbourhood shops. After purchasing tomatoes, onions, potatoes, and other items, I realised I had saved more than 50pc compared to buying from nearby stalls. Even after accounting for transportation and rental costs, the price disparity was staggering. It became clear that such inflated prices were driven more by individual greed than by market forces. Consumers are being unfairly burdened by irrational and inconsiderate traders, stripping them of their hard-earned income.

It is high time society forms strong consumer protection groups to ensure fair pricing. While Ethiopia has government legislation dating back decades to protect consumer interests, collective societal action is needed to use its bargaining power effectively. The Ethiopian Trade Competition & Consumer Protection Authority (TCCPA) serves as the main consumer watchdog. This entity comprises industry specialists, lawmakers, and market experts.

However, the effectiveness of such initiatives in curbing consumer exploitation remains uncertain. There is still a long way to go in empowering consumers to leverage their influence for fair trade. Interestingly, Ethiopia seems to have an overrepresentation of political and religious watchdogs compared to economic ones, despite the cost of living impacting every aspect of life, including politics.

To unleash the power of consumers, it is essential to educate them about their untapped bargaining potential. Currently, consumers are like a sleeping giant, doing little beyond complaining and assuming prices are imposed without their involvement. Many are unaware that they have the right to demand fair pricing and challenge exploitative schemes. However, isolated individual disputes are ineffective against an established market and skilled traders who can easily turn situations in their favour.

It is insufficient for a single agency to oversee a vast market like Ethiopia’s, with its 120 million people and its economy, now the fourth largest in Africa.

Consumer watchdogs must function as a consortium of civic groups organised by community, geography, and the types of products consumed. These groups should coordinate at municipal, regional, and national levels while working closely with the state on legislation, advocacy, and enforcement.

Once an effective platform is established, consumers could reap benefits from fair trade practices. Empowered consumers would not only create a healthier market but also benefit traders, as fair practices promote competition, trust and sustainable business. Traders, who are also consumers in other sectors, could gain from a fair system.

The state would benefit from a stable and transparent market. A fair system encourages socioeconomic development, spurs entrepreneurship, builds wealth, and strengthens trust among all stakeholders. Ultimately, such a system works fairly and equitably for everyone involved.

Monetary Policy Walks a Tightrope Battling Inflation While Stifling Growth

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I read with keen interest Tesfaye Boru’s (PhD) commentary published last week [January 19, 2025] on policy orthodoxy, which involves imposing high rates, steep reserve requirements, and mandated bond purchases designed to contain inflation in the short run. He was spot on in arguing that adhering to orthodoxy risks choking off investments and productivity gains.

In a country where agriculture and manufacturing remain crucial engines of employment and exports, sustained credit squeezes can trigger the very malaise they hope to prevent. Their effort to curb inflation by maintaining a 15pc benchmark interest rate, imposing strict reserve requirements, and mandating that banks allocate 20pc of their loan portfolios to government bonds is testing the boundaries of a conventional economic strategy.

Their measures follow a traditional inflation-fighting playbook. They attempt to tame rising prices by squeezing liquidity out of private credit markets, but such a rigid policy risks hobbling the economy. Without careful recalibration, this approach could stifle investment, dampen consumer spending, and erode trust in policymakers’ capacity to deliver stability and growth. Higher borrowing costs and tight monetary conditions generally slow demand and hold down prices. But, emerging markets offer cautionary accounts of what happens when policy becomes too rigid.

Several years ago, Brazil faced a similar dilemma when inflation threatened to derail its economy. Its policymakers shifted away from a high benchmark rate of 14.25pc and gradually lowered it to 6.5pc. The rate cuts spurred household consumption, renewed private-sector investment, and helped revive growth. South Korea provides another example of how a country can balance discipline with strategic flexibility. During its industrial expansion, its policymakers directed credit toward priority sectors such as manufacturing and exports, ensuring funds flowed where they could spur productivity and generate foreign revenue.

Turkey, in contrast, serves as a warning. Its reliance on prolonged monetary tightening weighed heavily on production costs, leaving inflation stubbornly high. That experience uncovered the risk of pinning too much on blunt interest-rate tools while neglecting structural issues.

Ethiopia now faces a similar conundrum. By requiring banks to funnel a portion of their lending into government securities, the authorities effectively starve key industries, mainly manufacturing and agriculture, of affordable credit. These are sectors that depend on capital to grow, modernise, and compete globally. Cutting them off from financing could undermine the country’s long-term economic potential, especially if rising unemployment meets stagnant exports.

Interest rates alone often fail to address the root causes of inflation in low-income or developing economies. In Ethiopia, price pressures are partly driven by supply-side bottlenecks such as logistical inefficiencies, costly imports, and limited infrastructure. China’s development strategy offers an instructive contrast.

Massive investments in transportation networks, energy systems, and communications infrastructure improved productivity and lowered production costs, helping tame inflation without resorting solely to high interest rates. By focusing on supply-side reforms, China balanced price stability with robust growth. Ethiopia could emulate this approach by prioritising infrastructure spending that reduces transport and logistics costs.

The foreign exchange regime is another area for reform. The authorities’ decision to liberalise the currency is an important step, but liberalisation alone would not deliver growth unless complemented by measures that help exporters manage currency risk and expand their markets. South Korea’s policy mix during its high-growth era is particularly instructive. Its government introduced tax breaks and other incentives for export-focused industries, which boosted foreign reserves and stabilised the currency.

If Ethiopia were to adopt a similar strategy, currency liberalisation might spark investment and fortify the economy against external shocks. Otherwise, a floating exchange rate could expose the economy to volatile capital flows and currency gyrations (a whirling motion) that worsen inflation rather than cure it.

High interest rates also take a psychological toll on households and businesses. When credit becomes scarce and expensive, small firms struggle to expand, and families cut back on spending. The risk is a downward spiral of slackening demand, weaker profits, and further caution among lenders and borrowers. Confidence can unravel if people begin to doubt the Central Bank’s ability to balance stability with growth, making economic recovery even tougher.

In Turkey, consumers and businesses grew frustrated as repeated tightening cycles failed to rein in inflation, fueling scepticism about central bankers’ stewardship. Ethiopia faces the same credibility crisis unless it starts loosening the spigot in measured steps. The European Central Bank’s response to the eurozone crisis illustrates how targeted liquidity injections can maintain a financial system without igniting runaway inflation.

Infrastructure-led growth has the added benefit of boosting employment, especially in sectors that can absorb a large labour force. Improved roads, railways, and other logistics systems also reduce wasted time and spoilage in agriculture, lowering costs for producers and consumers. The emphasis on manufacturing, particularly textiles and light industry, would gain a much-needed lift if firms could count on reliable and affordable electricity, consistent water supply, and swift transport routes to ports. By making such investments, Ethiopia could chip away at the structural drivers of inflation while laying a foundation for steady expansion and more resilient supply chains.

Opening temporary liquidity windows could help banks extend credit to struggling businesses and keep the private sector afloat while broader reforms take hold. Such a move would be most effective in tandem with selective rate adjustments and a recalibrated reserve requirement, freeing up capital that banks can lend to high-impact industries.

The goal should be to preserve monetary discipline while recognising that blanket tightening can turn counterproductive when it starves the economy of the funds it needs to grow.

The Trade Shifts Redefining Economic Development

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Global trade is undergoing a profound transformation, driven by three major shifts. New technologies are redefining countries’ comparative advantages and the types of goods they produce and export. The revival of activist trade and industrial policies threatens to distort trade flows and provoke retaliatory measures. And escalating tensions risk fragmenting the global economy along geopolitical lines.

The combined force of these shifts can reshape global trade patterns, marking a clear departure from the global economic landscape that defined the past three decades. Although the changing nature of globalisation is at the forefront of current policy debates, the focus has primarily been on the needs and priorities of advanced economies.

But what are the implications for developing economies?

To answer this question, it is essential to understand the role of trade and globalisation in advancing development. Over the past three decades, many developing economies have pursued an export-led growth model, benefiting from immediate efficiency gains and sustained productivity improvements. Initially, these economies specialised in low-skill, labour-intensive manufacturing, leveraging abundant workforces and investments from advanced economies.

Their newfound access to global markets and foreign expertise enabled them to adopt new technologies and achieve economies of scale. As trade-driven manufacturing growth spilled into other sectors, it became a powerful engine of broader economic progress.

Admittedly, development does not happen in a vacuum. The post-1990 surge of export-led growth depended on several critical factors, chief among them technological advances, particularly in information and communication technologies, that paved the way for the emergence of globalised supply chains. With production processes divided across multiple countries and components traded across borders, developing economies were able to capitalise on their comparative advantages by specialising in specific manufacturing tasks.

The second factor was effective policymaking. The embrace of multilateralism, the entry of developing countries into the World Trade Organisation (WTO), and the minimal use of industrial policy by advanced economies enhanced the predictability and openness of the global trade system. Meanwhile, “deep” trade agreements served as a mechanism to discourage trade-distorting measures and promote structural reforms.

Lastly, the end of the Cold War ushered in a period of relative geopolitical stability, peace, and predictability. This environment, underpinned by a philosophy that prioritised economic efficiency over national security concerns and political ideologies, was instrumental in ensuring the smooth functioning of global supply chains.

But, conditions have changed, as evidenced by technological innovations like robotisation, 3D printing, and artificial intelligence (AI), which could have far-reaching and complex implications for economic development. Although the wave of automation fueled by these technologies threatens to displace low-skilled workers, eroding the competitiveness of labour-abundant, low-income economies, it could also enable companies to boost productivity and expand. This, in turn, might increase demand for intermediate inputs and stimulate trade with developing countries.

Perhaps more importantly, technological advances could make services more tradable, unlocking new opportunities for export-led growth but also posing significant challenges for developing economies. Unlike manufacturing, business and IT services require a highly skilled workforce. To transform such service sectors into growth engines, governments will need to invest heavily in training and upskilling workers.

The implications of shifts in policies and geopolitics for global trade are equally complicated. Approximately 20pc of the industrial policies adopted by developed economies in 2023 were driven by geopolitical and national security considerations. For example, measures targeting electric vehicles and semiconductors were justified as an effort to diversify supply chains away from geopolitically sensitive locations.

While the short-term effects of geopolitical tensions are the subject of ongoing research, one notable finding from our work is that they fundamentally reshape trade flows. The United States is a case in point. Since the start of the Sino-American trade tensions in 2018, several developing countries have emerged as key suppliers to the US market. This can be attributed to the apparent reconfiguration of global supply chains and, crucially, to the rerouting of Chinese-made intermediate goods through third countries.

That said, trade tensions are not inherently beneficial for developing economies. For starters, the countries that have gained the most from the reallocation of trade flows are not low-income economies on the margins of globalisation, but rather those already deeply integrated into the global trading system, such as Malaysia, Mexico, and Vietnam.

Simulations show that the world’s fragmentation into competing blocs would hit low-income countries the hardest. Over the past three decades, access to open global markets has created enormous growth opportunities for developing economies. Moving away from this model would disproportionately harm poorer countries that lack the large domestic and regional markets needed to offset the loss of international trade.

To be sure, the new global economic landscape is still taking shape. But, it is increasingly clear that the changing nature of globalisation will make it harder to replicate the export-driven growth miracles of the past few decades. Addressing the three major trade shifts reshaping our world calls for pragmatic and forward-looking solutions.

The Key to Narrowing the Development Gap

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In 2015, United Nations member states unanimously pledged to work toward “peace and prosperity for people and the planet” by meeting 17 Sustainable Development Goals (SDGs) by 2030. Although the agenda was unprecedented in its ambition – end hunger, slash inequality, spur economic growth, achieve gender equality, arrest climate change, and ensure access to water, sanitation, and energy – many expected that the world would make significant progress.

But the sad, hard truth is that only 12pc of the SDGs’ 140 measurable targets are heading in the right direction, and more than 30pc are stalled or moving in reverse.

There is still hope, though. A single sector that holds the key to closing half of the outstanding sustainable development gaps in agri-food systems in Africa. The continent is home to over half of all people facing extreme poverty, and more than half of those facing acute food insecurity. One in five people in the region suffers from undernourishment, and nearly one in three children is affected by stunting. Africa is also home to around one-fifth of the global agricultural workforce and is projected to become home to 49pc of migrants displaced by climate shocks by 2050.

Thus, investing in African agri-food systems can have an outsize impact, allowing us to tackle a range of thorny issues – from hunger and poor health to poverty and undereducation – at the scale needed to keep up with the growth of Africa’s population, which is expected to double, to 2.4 billion, by 2050.

The biggest hurdle, of course, is financial. African agri-food systems are seriously underfunded. The sector receives less than three percent of global development funds and under five percent of total investments in Africa from public, private, and development funding combined. The average African farmer receives less than 140 dollar a year in total investment, far below comparable figures for India (800 dollars), Brazil (1,800 dollars), or Thailand (2,000 dollars). Some Britons and Americans spend more on coffee in the space of a month.

This chronic underfunding has taken a heavy toll. African agricultural productivity is 60pc below the global average, and food imports are projected to cost the continent 110 billion dollars annually by 2030. But with targeted capital and sustained attention, this can change. Boosting agricultural productivity would help feed a growing population, reduce import dependency, protect biodiversity, and restore soil health. Greater investments in the sector can secure the livelihoods of 250 million small-scale farmers and address the urgent need for climate resilience in a region disproportionately affected by global warming.

The benefits of investing in African food systems extend far beyond the continent. Africa’s natural carbon sinks will continue to mitigate climate change, but only if they are preserved. And strengthened agricultural systems can stabilise global food supply chains against disruptions caused by pandemics, conflicts, and climate shocks, by helping to rehabilitate the continent’s farmland, 65pc of which is degraded.

But, unlocking global benefits requires global engagement. Fortunately, African agri-food systems represent a compelling business opportunity. Aside from the fact that the continent boasts an increasingly skilled, youthful labour force and much of the world’s remaining arable land, investments in its food systems are 2.5 to three times more effective in raising incomes than those in other sectors.

Investors also stand to gain by coupling agri-food investments with investment in infrastructure such as energy, water, and technology, which will transform African agricultural systems into major sources of growth. Hundreds of small and medium-sized enterprises are already moving inputs, providing services, and hauling hundreds of millions of metric tons of food between rural and urban areas every day. This is a strong base for investors to build on.

So, what needs to happen next?

At the Paris Peace Forum earlier this year, we unveiled the Agricultural Transformation Lab for African Solutons (ATLAS), a permanent platform to advocate for increased investment, align priorities, and promote transparency and accountability in African agri-food systems. Since then, 30 organisations have joined, demonstrating real momentum behind the initiative. Members span from the private sector, including OCP Group and the Boston Consulting Group, development organisations (including AGRA and ONE Campaign) and leading financiers, such as the International Finance Corporation and the French Development Agency (AFD).

At this year’s annual World Economic Forum meeting in Davos, ATLAS is launching the 2×30 Challenge, which calls on leading development funders to commit to doubling total annual investments (from about 50 billion to 100 billion dollars) in Africa’s agri-food systems by 2030. To ensure that the additional funding does materialise and has a meaningful impact, it will be tracked through an annual investment barometer.

Increasing investment is a first step toward building more productive, sustainable, and resilient African food systems. Supporting Africa’s farmers is not only an opportunity. It is indispensable to achieving global development goals.

In Africa’s Embrace of AI, a Double-Edged Sword Looms Over Security, Peace

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Last year, the African Union’s Commissioner for Political Affairs, Peace & Security, Bankole Adeoye (Amb.), described a growing phenomenon that could determine the fate of many African countries. He stated the rise of artificial intelligence’s (AI) power to transform nearly every aspect of life, from governance to human security. But, he also warned that Africa risked becoming a testing ground for technologies that, while offering critical advantages, could introduce new threats if not properly regulated. He urged leaders to recognise AI’s dual potential, its promise to strengthen governance and peace, and its capacity to undermine both if left unchecked.

The concerns presented by Adeoye gained urgency as AI-driven tools began appearing in African conflict zones and security operations. Many saw the benefit of advanced surveillance systems, data-driven conflict prevention, and sophisticated early-warning mechanisms meant to help communities avert violence. In theory, AI could feed into the African Union’s Continental Early Warning System, offering richer, real-time intelligence on belligerents, the interplay of local actors, and hotspots where conflict might escalate.

The data these systems generate could, at least in part, support efforts to mediate disputes and encourage dialogue among communities teetering on the edge of conflict. AI could also be channelled into peacekeeping operations, making it easier to monitor ceasefires, broker peace agreements, and ensure that belligerents did not violate the terms of any negotiated settlement.

But, reality on the ground often brings a harsher perspective.

Over the last two years, African conflict theatres have seen more sophisticated deployment of AI tools than ever before. Using drones and autonomous systems has reshaped the balance of power and raised the stakes for state and non-state actors, many of whom do not follow international law. In places such as Libya, the Sahel, Sudan, Somalia, and the Great Lakes region, drones have been used for intelligence gathering, reconnaissance, and direct attacks on military installations and populated areas. This escalation has led to an alarming increase in civilian casualties, generating questions about the legal, ethical, and humanitarian consequences of AI-aided warfare.

In July 2024, reports of parties jamming global positioning systems and conducting spoofing cyberattacks sent jitters through security circles, stoking fears that these tactics could extend to civilian aviation and other critical infrastructure.

These developments have also troubled intelligence services, which are now struggling with evidence that terrorist organisations operating in the Sahel, as well as militant groups like Al Shabaab or the Islamic State in Somalia, have acquired and deployed drones against military camps. Ethiopia’s Air Force, presumably recognising this shift in the tactical environment, announced last year the establishment of a drone unit that would incorporate AI-driven capabilities. Such moves demonstrated a regional arms race in which AI becomes not merely an appendage to traditional military hardware but a decisive factor in how power is projected and maintained.

Beyond the visible use of AI in combat, there is a quieter threat with equally profound implications. Though ostensibly neutral, AI systems can become vectors of disinformation if hijacked or manipulated. A policy brief by the United Nations University Centre for Policy Research (UNU-CPR) discovered how generative AI, from natural language models to deepfake technologies, has accelerated the production and spread of false or misleading information. Since OpenAI’s ChatGPT was publicly launched in December 2022, political conflicts across sub-Saharan Africa have been inflamed by waves of AI-generated content crafted to mislead voters, promote extremist ideologies, or foment distrust in state institutions.

These toxic messages can now spread more rapidly and easily penetrate regions with limited internet access through proxies that exploit social media loopholes and local communication channels.

Complicating matters further, AI systems often draw on datasets that may embed ethnic, social, or economic biases. If a government or an institution invests in AI models without carefully auditing how they learn, it risks magnifying existing discrimination. In Africa, where fractures along tribal, religious, and socioeconomic lines can be acute, the deployment of biased AI could erode citizens’ trust in everything from law enforcement to judicial proceedings and inadvertently target vulnerable communities.

On the other side of the spectrum, authoritarian regimes could co-opt AI-driven surveillance tools to suppress political opposition, muzzle free speech, and cement their hold on power, all in the name of maintaining stability.

In response, the African Union Peace & Security Council (AUPSC) took several steps to guide AI’s responsible integration into security policies. Its meeting, held on June 13, 2024, culminated in a communique that stressed the role of the African Union Commission in undertaking a comprehensive study on AI’s impact on peace, security, stability, democracy, and development. The document also recommended mainstreaming AI into peace processes, urging stakeholders to incorporate AI in mediation, reconciliation, and post-conflict reconstruction efforts. It offered guidance on integrating AI into military operations while complying with ethical standards and international humanitarian law, cautioning against the deployment of AI in ways that might increase civilian harm.

The communique called for using AI-driven tools to combat disinformation and fake news while considering the potential for AI itself to generate deceptive content. It emphasised the necessity of strengthening cybersecurity measures by harnessing AI to track and neutralise digital threats efficiently. It stressed the need to equip early-warning systems with AI so officials can anticipate and defuse emerging crises.

Acknowledging the continent’s demographic dynamics, the communique urged AI-driven initiatives to empower youth and women through education, entrepreneurship, and leadership opportunities, seeing inclusivity as a shield against instability. It also urged for data protection and transparency, from national to cross-border levels, arguing that AI’s governance should be harmonised with the protection of civil liberties. And, in a sign of the African Union’s determination to shape rather than merely react to the global AI conversation, the communique demanded the urgent development of a Global Compact on Artificial Intelligence while calling on the Commission to expedite a Common African Position on AI’s impact on peace, security, democracy, and development.

As if to follow through on these directives, the African Union Executive Council adopted the AU Strategy on Artificial Intelligence at its 45th Ordinary Session in Accra, Ghana. The strategy aims to extract the benefits of AI for African nations by encouraging capability-building, investment, and collaboration across the public and private sectors. At the same time, it endeavours to curb AI risks through ethical supervision and regulatory vigilance. By ensuring that AI deployment aligns with human rights and democratic values, the strategy aspires to position Africa not as a passive recipient of external technologies but as an active participant in global tech governance.

The new framework urges collaboration between African governments and their regional and international partners, including the United Nations and private-sector firms, to define principles for AI usage in conflict zones. These efforts acknowledge that AI crosses national boundaries too easily for any single country to handle alone. The strategy portrays Africa’s voice in global AI debates as essential to ensuring that the continent’s historical, social, and material contexts factor into the design of AI standards.

Yet, no document, however thorough, can single-handedly address the disparities in infrastructure and digital capacity that shape AI adoption across Africa. While nations such as South Africa, Kenya, Rwanda, and Nigeria have moved rapidly to establish AI governance frameworks, many African countries face severe technological shortfalls, from intermittent electricity supply to limited internet connectivity. Without adequate resources, these states find themselves unable to integrate AI in early-warning systems or effectively combat AI-fueled disinformation. That gap threatens to widen the gulf between relatively technologically advanced nations and those on the margins. As a result, AI’s potential for good—from peacekeeping to public service delivery—may remain confined to better-resourced corners of the continent.

Nevertheless, a layered approach could address these risks.

The African Union’s Political Affairs, Peace & Security Department, working with the Department of Infrastructure & Energy, has been tasked with establishing a multidisciplinary advisory group on AI and governance. That group will offer proposals for continental AI governance in civilian and military domains and then report every six months to the Peace & Security Council. African leaders can also ground AI usage in well-established norms by tying AI regulations to existing international human rights standards. Africa’s position in the upcoming United Nations Summit of the Future, the forum where a Global Compact on Artificial Intelligence might emerge, could further shape how responsibly AI tools are developed and deployed worldwide.

Even if these steps are implemented efficiently, vigilance remains crucial. AI’s capacity to automate decisions raises profound questions about sovereignty, human agency, and accountability.

If an autonomous system makes a mistake in a battlefield context, mistakenly designating a civilian convoy as hostile, for example, who is responsible for that?

Local communities, civil society organisations, and technology experts should remain engaged in ongoing debates, pushing for transparency in how AI is procured and deployed. Ideally, that engagement would help keep AI from becoming merely another tool that powerful interests use to consolidate power at the expense of the vulnerable.

 

 

Wash Hands, Save Lives

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In a world scarred by health crises like COVID-19, one might expect handwashing to be a universal habit. Yet, many still neglect this simple, life-saving act, spreading diseases in the process.

Hand hygiene is a basis of public health. It is a simple yet powerful practice that prevents illnesses, yet many people disregard it, risking their own health and that of others.

In Ethiopia, where communal eating from shared trays is a common practice, handwashing is even more crucial. Unfortunately, cultural norms often clash with hygiene standards. The shared nature of meals, coupled with poor hygiene, creates an ideal environment for disease transmission.

It is common to see people dining after handling cash, touching various surfaces, or leaving restrooms without washing their hands. This invisible dirt, bad odour, and potential disease on their hands seem to go unnoticed. Shockingly, a common saying suggests that handwashing is only needed after meals to remove food residue, ignoring its importance before eating.

I stopped dining with others on shared trays long ago because many eat without washing their hands. As a mother, I now go to great lengths to shield my daughter from those who attempt to feed her with unwashed hands. When I politely ask them not to, they often take offence instead of recognising the importance of hygiene.

In cultural restaurants, where groups share trays of food, some people wash their hands, but others neglect to do so. It only takes one person with unwashed hands to contaminate the entire meal, jeopardising everyone’s health.

The World Health Organization (WHO) reports that 50pc of all foodborne illnesses result from unclean hands during food preparation and handling. Hands are primary carriers of disease, constantly exposed to bacteria, viruses, and other pathogens through contact with doorknobs, cash, mobile phones, and handshakes.

According to the WHO, nearly 80pc of communicable diseases are spread through touch. Proper handwashing with soap and water is one of the most cost-effective ways to prevent these diseases.

Handling food with unwashed hands is a leading cause of foodborne illnesses. The WHO estimates that one in ten people worldwide fall ill annually from contaminated food, with poor hand hygiene being a major factor.

Diarrheal diseases remain a top cause of child mortality globally, claiming over half a million lives each year among children under five. The WHO says that handwashing with soap can reduce diarrheal diseases by up to 40pc.

Despite overwhelming evidence of its benefits, a large gap remains between awareness and behaviour. A study in the Ethiopian Journal of Health Sciences found that only 25pc of participants practised proper handwashing before meals. Alarmingly, the US Centers for Disease Control and Prevention (CDC) reports that only 19pc of Americans wash their hands after using the toilet, revealing poor hygiene habits even in developed nations.

Medical literature shows that infectious diseases like E. coli, salmonella, norovirus, and influenza are easily transmitted via contaminated hands. Diseases like trachoma, which can cause blindness, are also linked to poor hygiene. Simple hand and face washing can greatly reduce the spread of trachoma.

Handwashing is more than a personal habit, it is a public health responsibility. Washing hands before meals, after using the toilet, and while preparing food can prevent countless illnesses, including Helicobacter pylori, which is linked to stomach cancer.

For many, reminding them to maintain proper hygiene is seen as disrespectful, making it hard to enforce handwashing. Many people underestimate the importance of washing hands before eating, focusing only on visible cleanliness.

While limited access to clean water and soap is a major problem in rural areas, even residents of Addis Abeba often eat with dirty hands despite having access to these resources.

The country has a long way to go in shifting societal attitudes to view handwashing as a sign of respect and responsibility for personal and public health. Handwashing is a simple yet transformative habit that saves lives. It is baffling that despite its ease and proven benefits, many adults still neglect it.

Observing individuals dressed impeccably but ignoring basic hygiene reveals a widespread disconnect between appearances and health practices.

The WHO says handwashing with soap is a critical intervention that can save millions of lives each year. However, the practice remains inconsistent.

By embracing the simplicity of handwashing, we protect ourselves and contribute to healthier communities. Hygiene plays a critical role in our survival. Mahatma Gandhi once said, “Sanitation is more important than independence,” underscoring its importance for staying alive.

Handwashing with soap is one of the most cost-effective public health measures. It prevents diseases, reduces healthcare costs, decreases school absenteeism, and limits productivity losses caused by preventable illnesses.

In a world where preventable diseases claim millions of lives annually, handwashing is a simple, accessible solution. This small act has enormous potential to save lives and protect communities. The solution, quite literally, lies in our hands.