Spotlight on… Africa
Ethiopia’s new wave of ethnic violence and its nefarious impact on investors
Identified as the world’s fifth fastest growing economy, Addis Ababa’s regime in Ethiopia is facing internal political challenges since last October. Oromo, one of the largest ethnic groups, has started a new range of protests against the Ethiopian People’s Revolutionary Democratic Front’s (EPRDF) regime and what they claim to be a refuse to share power. Ethiopia is constitutionally defined as a Federal Democratic Republic, which should be translated into a political framework of inclusiveness of all ethnic groups. This system should safeguard their constitutional right for self-determination, a proportional and inclusive presence in the central authority administration through a multi-party democratic system of self-rule at the regional level. Although the Ethiopian ruling party is a wide coalition of ethnic-based political parties, EPRDF has become the target of the Oromo Liberation Front based on an accusation of non-representation of Oromo’s interest within the federation.
This hostile attitude might be understood as a response to this year’s drought, considered the most severe in the last 50 years. The government spent $ 200 million on a programme to deal with the structural widespread famine phenomenon that the country is known for but with poor results. Latest estimates indicate that the number of food insecure people rose to about 10 million as the crop production suffered a drastic fall of 50% to 90% in the usually most productive Ethiopian regions, the Tigray and Afar.
Tensions between the government and the opposition also increased because of the violent police intervention in the October Oromo’s sacred festivity, Irreecha, which led to the death of 100 people. This tragic episode resulted in several attacks on foreign and government-owned companies. Fearing that this anti-governmental movement might be instigated by the diaspora through social media, the Addis Ababa regime decided to shut down access to Internet for the 50th time this year. However, various international institutions have denounced the nefarious effect of this decision on the services economy as total losses are estimated to be around $ 9 million. For instance, the governmental shutdown of Internet implied that daily transactions could not be regularly processed.
This measure could lead to an economic slowdown as well as to increasing political pressures on the internal cohesion of the EPRDF coalition. In failing to appropriately deal with this new wave of ethnic-based violence, Addis Ababa’s regime might not be able to ensure the security of foreign investments in the country as well as the geopolitical stability in the Horn of Africa. The next few months are expected to be turbulent.
Angolan President Dos Santos announced to leave Presidency in 2017
Once one of the most promising economies in Africa, Angola is facing a severe economic and financial crisis due to a continued tendency for oil-revenues’ drop which were halved in the first semester of 2016. As a consequence, last June Luanda’s Government asked the IMF for a $5 billion monetary assistance to diversify its economy. However, this has not affected some major investments in Angola as for instance the Chinese $7 billion investment for the construction of a deep-water port in Caio testifies.
Notwithstanding the most recent contestation to Movimento Popular de Libertacao de Angola (MPLA) and to Dos Santos’ Presidency, Luanda’s government is therefore still perceived as stable and reliable by foreign partners. However, the country might face one of the greatest political challenges since the end of its long civil war in 2002 as Dos Santos has recently announced that he would not run for the Angolan Presidency in 2017. The succession has never a consensual topic within the MPLA ruling party. There are two major preferable names to succeed to Dos Santos: Manuel Vicente, the current Vice-President who is a controversial figure in the MPLA, and Joao Lourenco, the current Minister of Defence. Joao Lourenco was the last name to be appointed and will most probably be the official successor of Dos Santos. An undefined succession could contribute to political turbulences in Luanda as it would reignite some old cleavages such as those between the MPLA and UNITA (the second largest political party in Angola), which were at the very basis of the Angolan Civil War.
This inaugurates a new climate of uncertainty about the future of Luanda’s government after recent diplomatic tensions with Washington due to judicial processes involving Angolan high-ranking diplomatic figures and the controversial nomination of the daughter of the current President Dos Santos to run the state-owned oil company Sonangol.
About Bernardo Marinho da Mata
Bernardo Marinho da Mata graduated in a BA in International Relations & Political Science and is now attending a Master’s Degree in Conflict Studies at the London School of Economics. Currently working in the sub-Committee of the LSE Political Risk and Investment Society, he is also the founder of the Portuguese Youth Association for Geopolitical Understanding and an Associate Intelligence Analyst of Global Intelligence Insight. His focus is on Eurasia’s geopolitical dynamics and investments in Africa.
