Since 2015, anti-government protests, conflict, and instability have been ravaging Ethiopia. Especially in the past two years, the breakdown of law and order has become the new normal. Thousands have lost their lives and in 2018, 2.3 million were internally displaced—a world record high. In fact, in the last two and a half years, excluding the latest operation in Tigrai, 113 conflicts have erupted across the country. As a result, the federal government’s expenditure to secure public order and security swelled from ETB14.2 billion in 2017/18 to a staggering ETB24.2 billion in 2019/20. Though without a known updated figure, the latest operation in Tigrai is sure to compound Ethiopia’s security bill. EBR’s Ashenafi Endale explores the direct and indirect costs of conflict and instability, as well as the overall economic losses.

As a developing country, the Ethiopian economy is largely characterized by the informal sector with studies indicating its expanding size. The International Monetary Fund estimates that in countries in transition, like Ethiopia, the underground economy accounts for as high as 40.1Pct of GDP. Although the government has been taking different measures to reduce the role of the informal sector, these interventions have failed to materialize. However, the government now says its latest measure of replacing currency notes with new ones is positively working in that direction. But experts disagree with the government’s concision by saying the expansion of the informal economy is highly interconnected with the formal economy’s failure to produce enough goods to satisfy national demand. EBR’s Ashenafi Endale reports.