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Boom to bust: Fallout of war and drought leaves Ethiopians mired in poverty

‘What I have seen with my own eyes is a huge number of people starving and even dying.’

Two women are pictured serving food. TNH
Volunteers dish up free lunches for the elderly and destitute in the Teklehaymanot neighbourhood of Addis Ababa.

In a dimly lit community hall, a group of around 100 elderly people sit on long wooden benches waiting patiently as volunteers dish up plates of food. For many, this free lunch will be their only substantial meal of the day.

With annual inflation running at over 30%, rising prices have made daily life a struggle. Seventy-six-year-old Tsedale Gebreselassie explains how even the most basic items, such as teff, Ethiopia's staple grain, are out of her reach.

“Things are really difficult for us,” Tsedale, who comes to these lunch sittings every day, told The New Humanitarian. “I can’t buy any food for myself because of the high prices. I have nothing.”

The free meals are provided by CBISDO, a local charity that feeds over 200 elderly and disabled people every day in Addis Ababa’s Teklehaymanot neighbourhood, a densely packed district of cobbled streets, small mud houses, and roadside coffee stalls.

Mesfin Tegene, who runs the charity, says demand for CBISDO’s services has shot up in the last two years as the cost of living crisis deepens. “We have a waiting list of 200 people,” he told The New Humanitarian. “We want to help everyone who needs it, but we don’t have the resources.”

The poor coming through Mesfin’s door, like millions of other struggling Ethiopians, are suffering the cumulative economic impact of civil war, drought, the Ukraine conflict, and the lingering effects of COVID-19. Those blows, in quick succession, have served to derail what was the fastest growing economy in the world between 2010 and 2019.

‘Remarkable’ progress

Once synonymous with famine, Ethiopia has made huge strides in slashing poverty. Between 1995 and 2015, it more than halved the number of people living below the international poverty rate, from 69% to 27% of the population. 

This drastic drop is hailed as one of the great development success stories of the 21st century. It was driven by breakneck rates of economic growth, averaging 9.5% a year for almost a decade until 2019, according to the International Monetary Fund (IMF).

The rapid growth was the fruit of Ethiopia’s “developmental state” model, characterised by central planning and huge public investments. At the same time, Ethiopia rolled out protection schemes, including Africa’s second-biggest social safety net, which has sent cash to millions of food-insecure farmers since it started in 2005.

When Prime Minister Abiy Ahmed came to power in 2018, he sought to build on the model’s successes, while also liberalising parts of the economy and encouraging outside investment – all part of a longstanding national plan to achieve middle-income status by 2025.

“The progress Ethiopia made is remarkable," said economist Tewodros Makonnen at the International Growth Centre (IGC), a global policy-based think tank. “There is no other comparison in Africa in terms of poverty reduction.”

Then came the onset of the COVID-19 pandemic in early 2020, followed in November 2020 by a devastating civil war between Abiy’s government and the leaders of Ethiopia’s northern Tigray region who once dominated national politics. 

The fallout of a historic three-year drought in the Horn of Africa, which has hit southern and eastern Ethiopia particularly hard, has been exacerbated by a countrywide suspension of food aid by donors last month, following the discovery of a vast food theft scheme in which federal and regional governments have been implicated.

That means 20 million Ethiopians who rely on food aid – one sixth of the population – are now going hungry.

These shocks – combined with the effects of the global spike in commodity prices caused by the Ukraine war, and ongoing insecurity in Amhara and Oromia, Ethiopia’s two most populous regions – have also served to drive up food costs. Tewodros at IGC describes the sheer diversity of negative factors as “unprecedented”. 

Some observers fear Ethiopia’s economic progress is in peril. An analysis by the United Nations Development Programme (UNDP) says “rates of poverty… have increased in all regions compared to 2015/16” – especially in war-affected areas, and in towns and cities where previous poverty reduction efforts had been most successful.

In Addis Ababa, the poverty rate may have risen from 17.8% to 24% in 2016-22, according to UNDP. The agency estimates the number of people living in poverty in Tigray rose from 27% to 45% over the same period. “[I]t is possible that these numbers may be undercounting the scale of downside effects,” the UNDP report notes.

Cost of conflict

The conflict in northern Ethiopia caused $22.7 billion worth of damage to infrastructure and a further $6 billion of productivity losses – equivalent to 26% of GDP – between November 2020 and December 2021 alone, according to an Ethiopian government assessment.

Agriculture was the hardest hit sector, sustaining 59% of these war losses, the result of looting, interruptions to planting, and vandalism. This includes the “killing and looting of livestock, destruction of crops in fields, and looting of crop harvests”, the assessment notes. Hospitals, schools, and other social infrastructure took 21% of this damage.

The total financial toll of the war – which ended with a ceasefire in November 2022 – is yet to be calculated and may be never known. The government believes it could have tipped three million people into poverty across northern Ethiopia.

As evidence of war crimes piled up, the conflict also pushed donors, including the United States and the EU, to suspend budgetary support, cutting off a key source of income and exacerbating Ethiopia’s chronic foreign exchange troubles. In September 2021, the IMF stopped a package worth $2.9 billion after disbursing just $309 million.

Meanwhile, defence spending quadrupled to reach 14.9% of the budget in 2022/23, making it Ethiopia’s second-biggest single expense after debt serving. This led to less spending on poverty reduction measures, according to Cepheus, an Ethiopia-based research firm.

Researchers think the conflict killed up to 600,000 civilians – including many who starved to death – making it the deadliest war globally of recent times. Roughly 5.4 million of Tigray’s 6 million people still rely on food aid, but most have not received any since mid-March because of the aid delivery freeze. Hundreds of starvation deaths have been reported and child malnutrition has spiked.

“The number of people coming to us, looking for help, has very much increased,” said Tesfaselassie Medhin, the Catholic bishop of Adigrat, a town in eastern Tigray. “Their situation is horrendous.” His clergy are assisting people with cash and other aid.

A relief worker in Tigray, who asked not to be named so they could speak freely, said the humanitarian crisis there is more dire now than during the war, when access was restricted. As a result of the food aid suspension, “what I have seen with my own eyes is a huge number of people starving and even dying”, they told The New Humanitarian.

Can Ethiopia recover?

It is not clear whether the overlapping shocks to Ethiopia’s economy will have a lasting or transitory effect, says UNDP. Much depends on internal stability, the duration of the Ukraine war, and whether Ethiopia will be able to regain access to external development assistance, which is down by more than half compared to pre-war levels.

As competition with Russia and China heats up against the backdrop of the Ukraine war, there are signs that Western donors are keen to re-engage with Ethiopia. Italy and the World Bank recently pledged hundreds of millions of dollars in grants, credits, and soft loans, while Addis Ababa is currently negotiating a new package with the IMF.

In June, the US administration removed its designation of Ethiopia as a human rights violator – a move that could pave the way for the resumption of financial support. While this is a cause for optimism among Ethiopian officials, it suggests a readiness by the United States to drop awkward demands for justice and accountability for war crimes.

In an address to parliament on 6 July, Abiy emphasised the pressing need to bring inflation down. Ethiopia’s annual rate of 31.4% in 2023 is far above the 7% global average.“We don’t have citizens who can shoulder that,” Abiy said. 

Ethiopians of every stripe are feeling the pinch. Opposite the church that gives Addis Ababa’s Teklehaymanot district its name, military veteran Mohamed Biru told The New Humanitarian he is barely coping. He earns 150 Ethiopian birr ($2.75) a day selling traditional wooden toothbrushes. 

Each day, he spends about 70 birr on lunch and 50 birr to sleep on the floor of a local family’s living room, leaving barely anything left over to replenish his stock. 

“What worries me most is being able to get the money to afford my place to sleep at night,” he explained. “That is my priority even more than food. It means that sometimes I don’t eat during the day in order to sleep inside.”

Edited by Obi Anyadike.

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