Ethiopia: East Africa’s Emerging Giant

Ethiopia: East Africa’s Emerging Giant

Ethiopia’s prime minister promised an aggressive reform agenda, but renewed turmoil threatens to throw the country’s democratic transition off course.
Children play within the Balderas condominium in Addis Ababa.
Children play within the Balderas condominium in Addis Ababa. Tiksa Negeri/Reuters
  • Ethiopia, home to more than a hundred million people, has become a major power in the Horn of Africa.
  • It has seen some of the world’s highest GDP growth in recent years, and has made strides in health and education.
  • But it faces a daunting set of challenges, including long-standing ethnic divides, climate threats, and substantial debt.


Ethiopia, Africa’s second most populous country, has suffered military rule, civil war, and catastrophic famine over the past half century. In recent years, it has emerged as a major power in the Horn of Africa, enjoying rapid economic growth and increasing strategic importance in the region.

More From Our Experts

After taking office in 2018, Prime Minister Abiy Ahmed responded to prolonged unrest with promises of dramatic political and economic reforms, and he shepherded a historic peace deal with neighboring Eritrea, an achievement that brought him the Nobel Peace Prize. Abiy’s aggressive approach to change was initially met with exuberance among many Ethiopians, but experts warn that social and political tensions are on the rise and renewed government repression could undermine the country’s democratic transition.

What is Ethiopia’s political backdrop?

More on:


East Africa

Sub-Saharan Africa

Abiy Ahmed

Demonstrations and Protests

Ethiopia was ruled under a single dynasty, the House of Solomon, from antiquity until the 1970s. One of just two African nations to avoid European colonization—Liberia being the other—it was nonetheless occupied by Italy in the 1930s, forcing Emperor Haile Selassie to flee. He was only able to return after British and Ethiopian forces expelled the Italian army in the course of World War II.

In 1974, a communist military junta known as the Derg, or “committee,” overthrew Haile Selassie, whose rule had been undermined by a failure to address an ongoing famine. During the resulting civil war, the military regime violently persecuted its rivals, real and suspected; a particularly deadly campaign, begun in 1976, was known as Qey Shibir, or the Red Terror. Tens of thousands of people died as a direct result of state violence, and hundreds of thousands more died in the 1983–85 famine.

In 1989, several opposition groups came together to form the Ethiopian People’s Revolutionary Democratic Front (EPRDF), led by Meles Zenawi Asres of the Tigray People’s Liberation Front (TPLF). The government had been weakened after losing the support of the Soviet Union, itself on the verge of collapse, and the EPRDF forces defeated the Derg in 1991.

More From Our Experts

Meles led the country for more than two decades, during which he consolidated his party’s hold on power. He introduced ethnic federalism, or the reorganization of regional government along ethnic lines, and he oversaw an era of massive investment, both public and private, to which many observers attributed the country’s subsequent growth. Critics, however, say Meles was a strongman who suppressed dissent and favored the country’s Tigrayan minority. Following Meles’s death in 2012, his deputy prime minister, Hailemariam Desalegn, took over.

Timeline: Ethiopia Over the Years

What were the 2015–17 protests about?

Popular anger swelled in late 2015, driven by frustration over government tactics that denied Ethiopians basic civil and political rights, as well as complaints by the country’s two largest ethnic groups, the Oromo and the Amhara, that they had long been shut out of power by the Tigray minority that dominated the ruling coalition. Additionally, analysts say that Ethiopia’s land tenure system, in which ownership rights are vested in the state, has long fostered discontent. Under the system, the government has forcibly relocated tens of thousands of residents in recent years to make space for commercial agriculture projects.

More on:


East Africa

Sub-Saharan Africa

Abiy Ahmed

Demonstrations and Protests

Protests were triggered by a government proposal to broaden Addis Ababa’s municipal boundary, a move demonstrators said could displace Oromo farmers. Separate protests, sparked by the arrests of Amharas over a boundary dispute with the central government, erupted in the Amhara Region in July 2016. That October, the government declared a six-month state of emergency, giving it sweeping authority to ban protests and make arrests without court orders. Human rights groups accused security forces of widespread abuses, saying that they had killed more than a thousand protesters and detained tens of thousands of people during the unrest.

Hailemariam’s government extended the state of emergency to August 2017, and the release of thousands of political prisoners in early 2018 did little to quell anti-government sentiment. In February, Hailemariam unexpectedly resigned, and EPRDF leaders selected forty-two-year-old Abiy Ahmed as prime minister.

Many observers hailed Abiy’s selection as a major step toward opening political space. He is Ethiopia’s first Oromo leader and comes from the reformist wing of the ruling coalition. After taking office, he undertook rapid reforms: he loosened restrictions on internet use, lifted much-criticized terrorist designations that had been applied to several opposition groups, made peace with Eritrea, merged the EPRDF into a single political party, and set out to open the country’s economy. He also vowed free and fair elections by 2020, though voting has been indefinitely postponed amid the coronavirus pandemic.

What is Ethiopia’s relationship with Eritrea?

Eritrea’s status was long contested. An Italian colony for more than a half-century, it was claimed by Haile Selassie’s government after World War II. Eritrea was federated with Ethiopia in 1952 but maintained administrative autonomy, a move backed by the United Nations. Ten years later, however, Ethiopia annexed it; Eritrean liberation fighters would spend the next three decades fighting for an independent state. The victory of combined Eritrean and Ethiopian rebel forces over the Derg in 1991 gave them their opening.

Eritrea gained independence in 1993, making Ethiopia a landlocked state and bringing to a head long-standing border disputes. Sporadic fighting broke out into war in 1998, killing an estimated one hundred thousand people. A 2000 peace treaty [PDF] largely halted the armed conflict, but hostilities persisted. The countries cut diplomatic ties and kept troops deployed along the border.

Abiy, however, immediately sought reconciliation with Ethiopia’s northern neighbor. In a landmark meeting with Eritrean President Isaias Afwerki in July 2018, the two announced an agreement to restore relations. The deal reopened embassies, resumed direct flights, and granted Ethiopia access to Eritrean ports. Yet analysts say many points of tension remain unresolved, including disputed borders and continued trade barriers.

How has Ethiopia’s economy developed?

Since the early 2000s, Ethiopia has enjoyed an economic boom in which annual gross domestic product (GDP) growth has averaged more than 10 percent, one of the highest rates in the world. It has sustained this impressive performance as the state directed a gradual shift away from agriculture in favor of the industrial and service sectors, though economists warn that unaddressed youth unemployment could hamper growth in the coming years.

Analysts attribute Ethiopia’s growth at least in part to reforms ushered in under Meles, who championed a state-led development model that combined public investment in areas such as infrastructure and education with foreign aid and investment. He pointed to the success of the so-called Asian tigers, such as South Korea and Taiwan, which followed a similar developmental framework. After taking office in 2018, Abiy pushed for more economic liberalization, opening state companies in areas such as energy, telecommunications, and air travel to foreign investment, though many major industries remain state-run.

Meles thought foreign aid could promote long-term development if used effectively, cultivating Ethiopia’s standing as a favorite of international donors, especially the United States. In 2018, it took in just under $5 billion in development assistance; about $846 million came from the United States. Multilateral aid has seesawed: Loans and other financing jumped in 2001 as the World Bank and the International Monetary Fund (IMF) helped the government launch a poverty reduction program, but they and other donors suspended direct budgetary support to the country following disputed elections in 2005 that led to widespread protests and a violent crackdown. In 2018, the World Bank committed $1 billion to boost the country’s budget in response to ongoing reforms; a year later, the IMF loaned $3 billion to support reforms.

At the same time, Ethiopia has seen a shift away from its traditional reliance on agriculture. Once comprising roughly two-thirds of GDP, agriculture’s share of the economy has fallen to about one-third and has been overtaken by services, today Ethiopia’s largest single sector. Industry, including manufacturing and construction, is also taking on a more prominent role in the economy, now accounting for a quarter of GDP. Still, agriculture remains of critical importance: farmers and agricultural workers make up two-thirds of the country’s labor force.

Meanwhile, the government has bet on a number of large-scale infrastructure projects, including expansive road and rail networks and the Grand Ethiopian Renaissance Dam, started in 2011 on the Nile River. When completed, the dam is set to be Africa’s largest hydroelectric power plant. Many of these development projects have been aided by more than $12 billion in Chinese financing since 2000.

What is Ethiopia’s foreign policy?

Many experts consider Ethiopia to be a stabilizing force in the Horn of Africa and a major U.S. partner on regional security. Though Washington paused military support to Addis Ababa under the Derg, U.S.-Ethiopia ties have deepened in recent decades through counterterrorism cooperation, particularly in their fight against the militant Islamic group al-Shabab. Addis Ababa hosts the headquarters of the African Union (AU), a bloc of fifty-five member states, and it has played leading roles in UN peacekeeping operations in neighboring Somalia, Sudan, and South Sudan.

However, Ethiopia has often been challenged by territorial disputes with its neighbors and concerns over border security, apart from its tangled history with Eritrea. Attempts by Somalia and its allies to claim Ethiopia’s Somali Region, also known as Ogaden, have at times led to war. In 2006, Ethiopia invaded Somalia, shortly after a precursor to al-Shabab wrested control of Mogadishu, the Somali capital. Ethiopian troops left in 2009, after the creation of an AU peacekeeping mission, though it acknowledged periodically sending troops over the border; it joined the AU effort in 2014. It has also sent thousands of troops to assist the UN mission in South Sudan, from where hundreds of thousands of refugees have crossed over Ethiopia’s western border. (Ethiopia is among the largest refugee-hosting countries in Africa, with close to eight hundred thousand refugees.) In September 2018, Abiy hosted rival South Sudanese factions for the signing of a long-awaited peace agreement to end the country’s civil war.

Meanwhile, the Renaissance Dam project has heightened tensions with Egypt, which fears the project will squeeze its downstream access to the Nile’s waters. Egypt and Sudan, which has been caught in the middle, have sought a slower timeline for filling the dam’s reservoir; a mechanism for settling disputes; and coordinated management of the dam, particularly during droughts. But negotiations, most recently mediated by the United States and then by the AU, have stalled, and Ethiopia began filling the reservoir in mid-2020. In response, Washington said it will cut some foreign assistance to Addis Ababa, and President Donald J. Trump has suggested that Cairo take military action over the dispute.

What is the humanitarian situation?

Despite rapid economic growth, Ethiopia is still one of the world’s poorest and most drought-wracked countries. Roughly a quarter of Ethiopians lived in poverty [PDF] in 2016, according to UN estimates, though this is down from 45 percent of the population fifteen years earlier.

Drought is common, particularly in the country’s north, and led to devastating famines in 1973 and 1984–85, together resulting in the deaths of more than 1.2 million people. In 2015–18, drought conditions necessitated emergency food assistance for more than ten million people. While humanitarian experts say the government has made progress in preventing such emergencies from turning into famine, food insecurity is an enduring threat. The Global Hunger Index, published annually by the Washington, DC–based International Food Policy Research Institute, ranked Ethiopia 97 out of 117 countries in 2019, based on indicators such as undernourishment and stunted childhood development.

Locust infestations across East Africa and other regions beginning in 2019—Ethiopia’s worst in twenty-five years—have exacerbated the problem, with swarms devouring hundreds of thousands of acres of crops. At the same time, the country has been battling the new coronavirus disease, COVID-19, though a swift government response that included large-scale household screenings and a national emergency declaration appears to have kept the number of cases low. “In the past few years, especially with the occurrence of the Ebola outbreak, that has really helped us as a continent but also for us as a country to create some system improvements and changes that have really helped for the COVID-19 response,” Health Minister Lia Tadesse said at an October 2020 CFR event.

The government has made strides, however, in health and education: In the last two decades, under-five child mortality was cut by two-thirds, while primary school enrollment soared from less than three million to more than sixteen million. AIDS-related deaths have decreased fivefold since peaking in 2003. Still, health experts say the country must tackle other major issues, such as high maternal mortality and malnourishment.

What major obstacles are on the horizon?

Considerable challenges remain for Abiy’s government, including making good on promises of widespread democratic reform, improving strained relations with Ethiopia’s neighbors, and protecting economic growth during the pandemic. “We are in the thick of the hard part that everyone saw coming,” says CFR’s Michelle Gavin.

We are in the thick of the hard part that everyone saw coming.
Michelle Gavin

While the government lifted some of its controls on the media and legalized several previously banned political organizations, human rights advocates have urged Abiy to address other issues, such as arbitrary detentions and forced displacements due to development projects. And the government has struggled to manage social and political tensions amid the opening. In an attempted coup in Amhara in 2019, a rogue militia assassinated the country’s army chief, the regional president, and other top officials. A year later, Abiy struggled to respond to violent protests sparked by the killing of Oromo musician Hachalu Hundessa, which led to the deaths of more than 180 people. His government arrested thousands of people allegedly involved in the unrest and restricted internet access. In September, two dozen activists including prominent opposition figure Jawar Mohammed, a vocal critic of Abiy, were charged with terrorism and other crimes in connection with the protest violence. The heavy-handed government response, analysts say, threatens to undo the country’s democratic progress.

That same month, the Tigray region, which is led by the once-dominant TPLF party, held local elections in defiance of Abiy’s decision to postpone the 2020 vote, highlighting a perennial debate over regional rights to self-determination. The move prompted Ethiopia’s parliament to vote to sever ties with the regional government, threatening hundreds of millions of dollars in federal funding. Tensions grew to a new high in November: Abiy launched a military offensive against the region after TPLF forces allegedly attacked a federal military base, raising fears of civil war.

Ethiopia hopes to continue expanding its manufacturing sector, as well as services such as tourism and telecommunications, in a bid to halt a growing job crisis among its youth population. With a median age under twenty and up to two million people entering the workforce each year, Ethiopia’s economy will need to sustain its high growth to absorb the next generation of workers, but the pandemic shock has thrown that into doubt. At the same time, persistent drought continues to imperil the livelihoods of millions, particularly people in rural areas.

Experts say Addis Ababa faces other economic challenges. It may have to start looking for financing outside of Beijing, which appears to be scaling back its investment over debt concerns. After years of borrowing, public debt hit a high of close to 60 percent of GDP in 2018, a situation the IMF has labeled high risk. Meanwhile, Ethiopia has faced pressure on its foreign exchange reserves due to a persistently high trade deficit.

Still, Gavin and other experts say the promise of transformational change is not gone. “Do I think it’s possible for Ethiopia—at the end of a transition period that was never going to be a few months but rather always going to be a longer and messier process—to become a more inclusive, ultimately more stable state? I do still think that’s possible,” she says.

Recommended Resources

In Foreign Affairs, Boston University’s Michael Woldemariam writes that toxic Nile River politics threatens democracy and stability in the Horn of Africa.

CFR’s Tom Frieden spoke with Ethiopian Health Minister Lia Tadesse at this October 2020 event.

The Atlantic Council’s Bronwyn Bruton discusses the implications of delaying federal elections amid the pandemic.

For African Arguments, Tsedale Lemma of the Addis Standard argues that Ethiopia’s democratic transition is now even more uncertain.

International Crisis Group tracks violence across Ethiopia.

Creative Commons
Creative Commons: Some rights reserved.
This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) License.
View License Detail

Shivani Persaud contributed to this report. 

For media inquiries on this topic, please reach out to [email protected].

Top Stories on CFR


NATO (North Atlantic Treaty Organization)

The war in Ukraine marks a new era of instability in Europe. Countering Russia’s efforts will require a stronger, more coordinated NATO.


After the rise of Chinese power during the 2010s and failed U.S. policies in the Indo-Pacific, the United States should renew the Pivot to Asia and place the region at the center of its grand strategy.*