The Last Ethiopian year (2004) in Review – A Week in the Horn

The Ethiopian year 2004 (2011-2012) has given us much to reflect on not least the death of Prime Minister Meles Zenawi on August 20th. A visionary leader, he dedicated his entire life to the fight against the brutal military Derg regime and then to the battle to lift the people of Ethiopia out of poverty. He also led his country into a new chapter of development, peace, and democracy and will be remembered as a champion of the cause of Africa in international fora. All Ethiopia mourned him and his loss will be deeply felt for many years.

Others who died this year included Abune Paulos, the Patriarch of the Ethiopia Orthodox Tewahedo Church; artist Maitre Afework Tekle, Ethiopia’s greatest artist; the iconic singer, Asnakech Worku; and writer Sebhat Gebre-Egziabiher, all of whom have left their mark on Ethiopia’s culture and history.

There has been no change this year in relations with Eritrea. In January five tourists were killed, two wounded and four others kidnapped and eventually released, in an attack orchestrated by Eritrea near Erta Ale in the Afar Regional State. Ethiopia responded in a carefully calculated, proportional attack on three Eritrean military bases where training for the cross-border attack had taken place. It was the first such action for more than a decade. The government reiterated that it was always ready to hold dialogue to resolve any disputes, but it would continue to respond proportionally to any more attacks from Eritrea.

Ethiopia’s fiscal year ended in June. The economy was marked by a growth rate of 11.4% despite external sector shocks, though the overall macroeconomic environment remained subject to a substantial inflation rate. Efforts to cut this brought it down to 20 percent by the end of the year. An International Monetary Fund (IMF) delegation visiting in June, said the major causes were monetary expansion, international prices, uncompetitive markets and a surge in domestic demand. At the beginning of the year, the 2nd year of the five year Growth and Transformation Plan, the Ministry of Finance and Economic Development (MoFED) allocated some 117 billion birr to various programs, up from 72 billion birr the year before. By the end of the year the Gilgel Gibe III Dam was 62% complete and 7% of the Grand Ethiopian Renaissance Dam had been built.

The Development Bank of Ethiopia, which had agreed to let seven Micro Finance Institutions sell bonds, surpassed its target of selling bonds by 44% in the first nine months of the fiscal year. The minimum paid-up capital for a new entrant bank has also been raised to 500 million birr after staying 75 million for many years.

In a bid to implement an effective multimodal transport system, the Ethiopian Shipping & Logistics Services Enterprise (ESLSE), an amalgamation of Ethiopian Shipping Lines (ESL), Ethiopian Maritime Transit Services (EMTS) and Dry Port Service Enterprise (DPSE) was set in September, 2011. It aimed to streamline shipments from Djibouti Port to avoid warehouse fees in foreign currency and the confiscation of imported goods.

On August 17th, the first Ethiopian Boeing Dreamliner landed at Addis Ababa Bole International Airport. Ethiopian was the first African airline and the third in the world to operate the jetliner. Earlier it joined the Star Alliance Group, an elite group of airlines, which offers more than 21,555 daily flights to 1,356 airports in 193 countries. It was thethird African carrier to do so. In June 2012, the Ethiopian Civil Aviation Authority announced that it had prepared the country’s first Air Transport Policy which will allow foreign investors to own up to a 40% stake in domestic airlines.

In November, the Ethiopian Ministry of Mines announced that it had suspended issuing minerals exploration licenses in order to deal with a backlog of applications. In January 2012, the Ethiopian Ministry of Mines and South West Energy (SWE), the first Ethiopian oil and gas company, signed a petroleum development and Production Sharing Agreement (PSA) to allow the company to prospect for oil and gas reserves in the Gambella basin, near the Sudanese border.

In June BPH Billiton, the largest mining company in the world, announced it was pulling out of its Dalol potash project in the Afar Regional State for operational business reasons, though other companies, including Alana Potash have continued to expand their operations there. In July, the Ministry of Mines announced that it had revoked the petroleum production license it granted to the Chinese oil and gas company, PetroTrans. Earlier in the year Derba MIDROC Cement, a major cement factory, started production. It has an installed capacity of 2.5 million tons of cement per year and quickly had an impact on cement prices.

This year the Ethiopian Electric Power Corporation (EEPCo) inaugurated the Ethio-Djibouti power transmission project, and projects for power transmission with Sudan and Kenya have also been signed. The Corporation announced in June that it was revising its 25-year power sector master plan, aiming to raise power generation to 37,000MW by the end of the plan.

Addis Ababa hosted a number of important conferences during the year. The International Conference on Aids and STIs in Africa (ICASA) was held in December. The World Economic Forum for Africa in May attracted a host of international businesspersons and politicians including Bill Gates and the Nigerian billionaire, Akilo Dangote, together with the president of Walmart, Doug McMillon. Ethiopia also hosted the AU Summit in January as usual. The main AU agenda was the advancement of regional economic integration of the continent. The plan to have continental free trade area up and running by the year 2017 was discussed. Ethiopia also hosted the July Summit as well after Malawi pulled out. The new Chinese-built and funded AU Conference center was inaugurated this year.

Ethiopia and Kenya have signed a memorandum of understanding to form the Ethio-Kenya Corridor Development Commission. The African Development Fund has approved loans to Kenya and Ethiopia to link Addis Ababa, Moyale, Nairobi and Mombasa by 2016. This is part of the trans-African highway project to promote trade and regional integration through highway infrastructure development.

The Ethiopian Railway Corporation (ERC) signed a USD 1.7 billion contract agreement with Turkish company Yapi Merkezi Construction Industry Inc. to construct 389km of the Awash–woldia/Hara Gebeya Railway Project. It is expected to complete the project within 42 months.

The London 2012 Olympics, which was held from July 27 to August 12, provided Ethiopia with three gold medals: for the women’s marathon winner, Teki Gelana; for the women’s 5,000 Meseret Defar; and womens’s 10,000 meters, Tiruenesh Dibaba. Overall Ethiopia collected three gold, one silver, and two bronze medals, ranking 24th in the world.


*Originally published on A Week in the Horn – Sept. 14, 2012 issue, titled “2004 in review”.