Post war Rehabilitation A Daunting but Doable Challenge!

Ethiopia was left with little option other than defending itself when the super powers waged a war against it in support of domestic terrorists. No different for Ethiopia, peace and security are the minimum public goods a government should deliver to its citizens. Unfortunately, war is not a unilaterally avoidable evil. This is particularly true in the current world where a tense fight between those who want to assert their freedom and continue their greed hegemony is prevalent.
As far as I know, war is neither the will nor the intent of the Ethiopian government. The overwhelming change, positive spirits, and narrations on peace and forgiveness that swept the country since 2018 don’t call for war. Indeed, the hope was that the country would want to compensate for the lost time under various tyrannies of the past and move forward and bring about a speedy transformation towards democracy and prosperity.

The level of enthusiasm and aspiration Ethiopians have been demonstrating since 2018 is apparent. This reality is a bitter truth for a few who were once at the helm and scared of losing the unlawfully acquired state power that enabled them to subjugate their will on others and amass a wealth of resources illegally. Consequently, these losers solicited support from corrupted elite circles of the superpowers that in no time responded vindictively and drove the country into all-out war.

Paradoxically, the victims and government have been extending an olive branch and persistently pleaded for peace which unfortunately bore no fruit. The worst of the matter, the terrorist launched a sudden attack on the northern command of the Ethiopian National Defense Force in November 2021 and massacred thousands of the combatants and raided the military hardware under their possession. Sadly, the severity of the casualties exceeded the imagination for many and resulted in unprecedented human, material, and social catastrophes to millions of innocent citizens. Women and children particularly suffered the worst and were subjected to unspeakable level of abuse and all sorts of humiliation. Children were abused to multiple atrocities including being forced to join the terrorists and fight along them. Tens of thousands of juveniles were incarcerated as prisoners of war.

Kudos to the patriotic Ethiopians who were determined to take on the enemy and defend their freedom from across the nation and who destroyed and decapitated the enemy in weeks after launching the offensive. Consequently, the war is certainly looming to an end, though its far-reaching adverse impact has just begun to surface. Given the adrenal response (fight or flight) and the overwhelming tense atmosphere during the war, people only start feeling the severe pain afterwards when things start to normalize. The trauma and other post-attack syndromes begin biting the victims and severely halting their livelihoods.

War is always regrettable, it hurts and leaves deep scars when it happens between citizens of the same country. More so when it is funded by the same economy, while the perpetrator and the victim share the same vault and have dismal chance for repatriation.

The three states where the war took place—Tigray, Amhara, and Afar—lost substantial amounts of investments made to improve their infrastructure and services level. The damages to schools, health services, roads, bridges, universities, manufacturing plants and so on were immense. Preliminary estimates indicate that the Amhara and Afar states have lost so much of the gains made in the last thirty years. Hence, poverty is sliding back by at least twenty points to over 55Pct in these states.

Food insecurity pulmonated to the lowest; education and health poverty appearing to be new challenges perpetuating the demand list. Sadly, the incident overlaps with the busiest agriculture season. As the majority of the smallholder farmers in the areas have lost their harvest including seed and other material that should have been stocked for the coming seasons, the finance institutions will have close to zero chance of recovering their lendings, perhaps in some instances lost track of their clients as documentations were deliberately raided by the aggressor TPLF forces.

The situation is a complete disaster. It is a nightmare for millions of citizens on how they could restore their livelihood as they are left with a bare minimum to sustain. On the other hand, given the magnitude of the loss, and scope of the damage that leaves no one safe, local self-help welfare associations and other traditional coping mechanisms have equally been affected because of the property loses and causalities of their members.

It is difficult, if not impossible, to support each other under such circumstances. That’s why the government should play two convergent and urgent actions. Reaching out to the needy with life-saving support and galvanize the remaining society and pool support from domestic and international sources. It’s important to approach the international community using it’s multilateral and bilateral engagements. Of course, this might not be easy because the international community who should have been more responsive for the same reason stood on the wrong side of history even for such level of humanitarian call. By doing so they continue to disadvantage the country twice, failing to stop the war from the onset and neglecting the damage inflicted by their poster child.

Doubling efforts
The Ethiopian economy has been suffering from several macro and micro challenges even prior to the war. The no-war-no-peace status quo in the State of Tigray since 2018, coupled with the impact of Covid-19, and other natural calamities like desert locust infestation, drought, and flood have contributed to the overall dire economic situation. High unemployment, rampant inflation, and price hikes have been prevalent during the same period. Obviously, these have made the already fragile situation worse. The grand public investments on power, road, and rail systems substantially completed with meager resources from the treasury crowded out the private sector and contributed to the dwindling foreign currency reserve.

While halting the appetite for new investment, the government should downsize ongoing projects and save resources for the rehabilitation effort. These interventions should equally subjugate the galloping inflation. The fiscal management discipline seems out of control; there must be all out-austerity measures to stop this completely unaccountable practice using all possible means including coercion. Corruption in both private and public sectors, extravagant expenditure in the public sector make the economy precarious; consequently, underground market practices are left to be the norm, leaving the state from billions in state taxes uncollectable.

None of these actions could be abated without a strict fiscal discipline. Revenue regime must be diversified and expanded. The number of taxpayers in Ethiopia is still very small though the tax revenue has shown progress in the last few years. Domestic revenue from all sources should comply with the minimum threshold for Africa—20Pct of the GDP. According to the World Bank, tax to GDP ratio in Ethiopia is 6.7Pct in 2019, way bellow Kenya’s 15.1Pct. Broadening the tax and equally making sure that every tax payer, especially large tax payers, pay their due amount is very important to raise enough domestic taxes.

Certainly, the war has to be shortened by all means. The war economy remains feasible only if it has yielded a quick turnaround. No economy can bear an extended war, even in countries where the animations and war supplies are domestically provided. Ending the war should be the higher priority. All focus should be made in the reconstruction of lost infrastructure and rehabilitation of societies. Any further delay will cost the country and the people exponentially. The rehabilitation efforts under the current circumstance, where millions of people were evicted and displaced, demand substantially enormous resources. The emergency nature of the need also calls for doing things differently at every aspect of the rehabilitation with the sense of urgency.

Mobilizing domestic resource seeks the highest level of coordination and innovative mechanisms. One feasible idea in this regard is issuing a war-time bond by the government. Low price bonds with medium- to long-term maturity with an installment payment arrangement are more effective as it could engage millions of passionate citizens as new “investors,” who would be willing to buy even with no anticipation of interest. The profit they could have made would go as their contributions to the rehabilitation. The amount raised could also be used for leveraging more resources from international sources as matching capital. The bond could be issued on both domestic and foreign currencies.

Whether it is infrastructure, or program design for services, it should apply state-of-the-art technologies and innovative ideas and win the trust and confidence of international and local communities. The government should be willing and ready to tap every resource, including the private sector, which with the proper support would not only be willing to invest but also unleash its potential and expedite the implementation of the country’s overall rehabilitation and development. All that the government should focus on is creating the enabling environment, through setting standards, performance measuring tools, indicators and benchmarks for all parties who will take a role.

In summary, the task before us is very daunting and complex. It requires every citizen’s attention and passion. The government especially should remain vigilant and design a mechanism that will enable it to be informed through tracking the effort systematically. Such effort is too big and complicated to be entrusted to a single party (government) for implementation. Given the nature of the mission, every single penny and minute has to be managed responsibly in ideas where the value for every birr (dollar) makes the highest possible positive impact.

10th Year • Feb 2022 • No. 104


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