When Hope Meets Despair

April 3 , 2021
By Christian Tesfaye ( Christian Tesfaye (christian.tesfaye@addisfortune.net) is a researcher and Fortune's Deputy Editor-in-Chief whose interests run amok in the directions of political thought, markets, society and pop culture. )

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In such times, it would be akin to incredulous to claim that Ethiopia is any sort of country with a prosperous or even viable future. Darkness seems to be all around; fear and anxiety press on citizens. A general sense of insecurity is in the air; it feels as if violence has been privatised and regularised to the point that death could be lurking on any corner. It is a sad, sad reality.

Yet again, millions and millions of people wake up each day with a hope that the next one would be better. They hope, they dream and thrive. They attempt to innovate, create wealth and, if possible, make a profit. They have the potential to go much further if they are given a chance.

In many ways, the battle is to save the economy from the broken political system – it is to develop not because of but despite our political class. If anything, the national discourse over the political situation has gone into depths that are nearly irredeemable, especially since the start of the war in Tigray Regional State. There are no more sober or centrist voices in the political space. Instead, it has become a cesspit for the exchange of insults and malice. There is a good possibility that there may be no positive future with Ethiopia's practice of politics, at least not with this generation of political elites.

But is it possible to have a country that develops economically despite its callous political class?

One only hopes. Here at least, there is ground to build on and opportunities that could be derived. Economic reforms being implemented to make “doing business” in Ethiopia easier are highly encouraging. Take the value of the Birr that is slowly being moved toward a market-clearing rate, which could do wonders for the manufacturing sector. It discourages imports - with a priority in foreign currency allocation given to the import of the likes of raw materials - while incentivising export and consumption of locally sourced and produced goods.

Another major change with a positive outcome will be the introduction of a capital market. Currently, there is minimal incentive to save, given the negative deposit interest rate in real terms, but little available avenues for investing in productive sectors. A capital market will make the connection between savers and entrepreneurs and businesses much smoother. More critically, it will provide alternative access to capital, instead of only banks, for businesses.

Perhaps the most exciting industry today is telecom, a sector that has long been kept on a tight leash by the government. Non-financial institutions have just been allowed to engage in mobile banking. The rush to become the dominant market player has already begun. Sunpay Solutions entered the business with 100 million Br in capital late last month. In the same month, ArifPay raised 140 million Br to become a digital payment platform.

The knock-on effect of this is already obvious, as evidenced by the rise in digital service provision. Platforms such as Awtar, Avetol, Bana Muzika and Habesha View are some of the streaming services that have recently entered the market owing to the incentive provided by the growth and formalisation of electronic payments.

Many countries have grown despite their politics, not because of it. Politics is not a problem that confines itself to issues of elections or representation. It pours over into every part of our lives, even in the bedroom, as the postmodernists are loathe to let us forget.

This is not a defeatist argument for relinquishing the political space to extremist voices, the generals and the armed combatants. But sometimes, it could be the wrong tactic to keep fighting - for liberal democracy, in our case - when the risk could be wiping out all potential elsewhere.

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PUBLISHED ON Apr 03,2021 [ VOL 22 , NO 1092]

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