Risk and uncertainty following Ethiopia’s latest election delay
Ethiopia should be two weeks from crucial parliamentary polls that will decide not only the parliamentary makeup but also the prime minister. However, the National Electoral Board of Ethiopia (NEBE) announced on Saturday that another[1] postponement was necessary as it has become clear that not everything will be ready by 5 June. It was reported that access to social media sites was blocked at the time the announcement was made and for a day afterwards.
Significance – Confidence remains as do selected risks
According to NEBE, preparations are taking longer than planned, particularly around voter registration, training of officials and printing of electoral materials. It has not given a new date for the election, though it says the delay should not exceed three weeks. It has asked political parties to submit proposals with dates that will be reviewed before a final decision is taken.
Confidence in the NEBE is generally high outside of the main areas seeking independence or autonomy such as Tigray and Oromia[2]. However, the European Union decision to cancel its observation mission over concerns about communication and transparency is indicative of the limits of that trust and associated risks. See: A month to Ethiopia’s general election: Key issues ahead. Moreover, opposition parties, have other concerns:
that the security forces may be too stretched to adequately police voting;
that the longer they wait into July and August, the rainy season may make certain areas inaccessible, especially in rural areas and (given the first two concerns);
that the given time frame may not be adequate.
Already, the country is facing a difficult economic climate. Covid-19 took a heavy toll on the country’s stellar growth over recent years. It had averaged 9.4% growth over the past decade, fell to 6.1% in 2020 and is expected to fall to 2% in 2021. Debt stood at 57% of GDP in 2020 and is likely to grow as social and infrastructure spending plans remain elevated whilst revenue collection remains very low. Note the Fitch Ratings downgrade earlier in the year over Ethiopia’s decision to access debt relief under the G20 common framework. The effect on investor confidence has been notable. There was a long build up to the sale of two lucrative telecoms licenses in the country with the state opening the sector up to private and foreign investment for the first time. At one point, more than 10 potential bidders had been identified but, eventually, only two bids were received by the deadline in late April.
On-the-ground, the election is less of a determining factor for investor confidence than the security situation, given the broad expectation that Ahmed will comfortably win a second term in office. To quote a worker in the textiles sector: “we're in a bit of a limbo. Things are carrying on as normal to an extent as there's not much doubt that Prosperity will win the most seats, returning Abiy Ahmed as prime minister. But there is concern about how much the delay and his victory may escalate violence in some areas.”
This sentiment that continuity brings its own risks is further exemplified by the cancellation of 27 mining licenses last week for a lack of activity, failure to renew and non-payment of royalties. They will join 63 others revoked in December 2020 in being put up for international tender. In the words of one mining group in late 2020, authorities are willing to handhold and support investors to any end necessary so long as they are sticking to investment plans and meeting proposed deadlines.
Outlook – Realising potential will take dialogue
The restive nature of Ethiopian politics means that there will always be dissent around polling. Whilst room for improvement does exist, these may be the most representative elections that Ethiopia has held since the nominal return to democratic rule in 1995. The inclusion of all political parties in the setting of a new timeline will allay the fears of many concerned about a slide away from constitutional mandates.
There is little doubt that if all materials and funding were available to the NEBE, it would attempt to hold elections within three weeks. However, the resources are not available, and the outcome will be contingent upon agreement from the parties who have raised valid concerns.
While policy continuity offers advantages, a robust communication strategy is required. For example, regarding plans for liberalisation. Moreover, even from an investment perspective, security must be more transparently and urgently addressed. Significant mining and manufacturing activities take place in both Oromia and Tigray regions, and they face regular disruption.
Other unilateral state actions such as limiting access to the internet and limiting travel to certain areas without prior approval from security forces risk significantly harming operational efficiency.
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[1] The elections were originally due for August 2020 but were delayed due to the pandemic.
[2] For example, the delay is not widely characterised as an attempt by the prime minister to hold on to power.
*Image credit: unsplash
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