Cost of Ethiopia’s war in Tigray fuels search for a lasting peace

Tuesday February 15 2022
Tigrayans queue for food aid in 2021 at a camp for displaced people.

Tigrayans queue for food aid in 2021 at a camp for displaced people. PHOTO | AFP


The drums of war are no longer as loud in Ethiopia, dimmed but not silenced in part by the cost of the conflict in Tigray as well as continued pressure from international partners and world community.

At the African Union General Assembly in Addis last week, Ethiopian Prime Minister Abiy Ahmed said there have been “lessons” from the war in Tigray, which started in November 2020 as a “law enforcement” operation against the Tigray People’s Liberation Front.

At the AU meeting, Dr Abiy said he was leaving “no stone unturned” in the search for peace in his country.

Read: Ethiopia will do everything possible to resolve Tigray conflict, Abiy says

“Without your support, our existence as a nation would have been at great risk,” he said in his address to the 35th Ordinary Session of the African Union General Assembly.

“As you are aware, despite the intransigence of the ether side in this conflict, my government has taken a variety of measures to minimise the loss of life and destruction of property.


“We have implemented unilateral withdrawal from conflict areas and used force that is necessary to ensure law and order. As a gesture of good will, we have released high profile suspects with a view to creating a conducive environment for peace,” PM Abiy told representatives.

The meaning of leaving “no stone unturned” could be variedly interpreted. But more than a year after Ethiopia went to war with a group that once led the government, this was the first speech by Abiy in which he did not label the TPLF a criminal clique.

It also came at a time when the full loss from the war was being realised. A humanitarian crisis has been unfolding, with 400,000 facing famine and over two million people displaced in Tigray, now spilled into neighbouring Afar and Amhara regions, as victims of sporadic fighting even with public ceasefires in place.

Malawi’s President Lazarus Chakwera told the BBC on Sunday that the hosting of the AU Summit itself was a “good indicator” of the country turning a page on peace bid.

The Tigray conflict saw President Uhuru Kenyatta of Kenya warn that neighbouring countries risked being sucked in and hurt, especially when it comes to joint regional investments.

In a meeting with US Special Envoy for the Horn of Africa, David Satterfield in Nairobi, Uhuru said he was worried that the conflict could stall or slow down progress on infrastructure and telecommunications ventures.

“A strong Ethiopia is important to us. A stable Ethiopia is important to us. That is why we are committed to doing all we can to see the conflict resolved,” said President Uhuru.

The Kenyan leader had days earlier called on the warring sides to choose “genuine” reconciliation. “I call on the people of Ethiopia, in the spirit of the Olympic Truce, to embrace peace and pave the way for genuine reconciliation. The prosperity of Ethiopia, our region, and, indeed, our continent, has to be anchored in an enduring peace and security, and a firm belief that together, we can create a better world,” he said.

Kenya and Ethiopia had set eyes on the Lamu port, where four berths have been constructed as part of the Lamu Port South Sudan Ethiopia Transport corridor. Uhuru said the telecom venture into Ethiopia by Kenyan giant telco Safaricom, will only flourish under a stable and peaceful Ethiopia.

Kenyan has been at the forefront for a peaceful resolution in the Tigray conflict.

Visiting Ethiopia last week, Deputy UN Secretary-General Amina J Mohammed admitted that there were “less hostilities” now than before. “We are definitely in a better position now. There are more discussions,” she said at a press conference in the Ethiopian capital, Addis Ababa on Monday. She had arrived from a trip to Tigray, where she assessed the local humanitarian situation and spoke with TPLF leaders.

Ms Mohammed was accompanied by the African Union’s chief mediator, former Nigerian president Olusegun Obasanjo whose efforts to have the protagonist dialogue were seemingly not well received. On Thursday, Obasanjo briefed an AU Peace and Security Council meeting saying there was progress.

In Ethiopia, the mounting cost of war was becoming apparent, both for leaders and their counterparts in the region. Besides the deaths and displacement, Ethiopia’s economy which was growing at 10 percent annually before the conflict has plummeted to under 5 percent. There were also effects of the pandemic, but some of the biggest corporations in Ethiopia have reported a dip in earnings, blaming it on the Tigray war.

According to Louw Nel, a senior political analyst at NKC African Economics, a consulting firm, the Tigray war has cost the country $ 2.5 billion.

The president of the Tigray region and leader of the Tigray People's Liberation Front (TPLF), among many other claims, has accused the Ethiopian army of bombing a 300 megawatt Tekeze Dam, a one-of-a-kind hydroelectric plant in northern Ethiopia.

Ethio Telecom, the country’s only telecom service provider until last year July, says it has lost 3.67 billion birr (roughly $74 million) in the past six months due to the ongoing conflict.

The partially state-owned company’s first half-year performance report issued last week shows that the company achieved 86.4 percent of the total revenue it expected to earn during the last six months. It reported, 28 billion birr (roughly $560 million) in the first half of the budget year. Despite the losses, Ethio Telecom however said that the revenue secured during the past six months is significant given the country's difficult situation. Officials blamed the Tigray conflict for destruction of infrastructure and disruption of telecom services in neighbouring regions, for the reported losses in revenue.

The report further said that, over 3,470 Ethio Telecom stations in parts of the country's north were forced to stop providing service as the war had spread to neighbouring Afar and Amhara regions.

In Tigray, there have been a total blackout of telecommunication and banking services since the conflict began in November 2020. Ethio Telecom performance report indicates that it has spent some $7 million to restore services in the war affected areas.

Beyond losses by firms, the country’s currency weakened from 35 birr per dollar to more than 50. Somalia’s US-based economist Faisal Roble, with expertise in the Horn of Africa says that the high cost of the war has negatively impacted Ethiopia's capacity to access dollars.

With no official data, economic commentators speculate that the military expenditure by Ethiopia would reach $502 million by end of January 2022, up from $ 460 million the previous year, according to estimates by the Stockholm International Peace Research Institute.

Last month, the Ethiopian House of Peoples' Representatives approved $1.8 billion budget for Ethiopian National Defence force (ENDF). That is more than quadruple compared with that of 2020 military budget.

Last August, the Secretary-General of the United Nations Antonio Guterres said that the conflict in Ethiopia had already drained the country's coffers over $1 billion including on military expenditure.

The increasing military expenditure has led to severe inflation. Last June, Addis Ababa admitted that the country had lost about $2.3 billion since the conflict in Tigray erupted in 2020 in lost business hours and damage to infrastructure. Internationally, after the US suspended Ethiopia's membership in the African Growth and Opportunity Act (Agoa), Global fashion giant PVH Corporation closed its manufacturing facility in Ethiopia.