September 25, 2023

IMF forecasts lowest economic growth for Ethiopia in 18 years amid Tigray crisis and coronavirus pandemic, says peace and stability needed now

Børge Brende President; Member of the Managing Board
Børge Brende President; Member of the Managing Board

The International Monetary Fund on Thursday released a comprehensive economic outlook on sub-Saharan Africa, detailing the economic damage that has been done to the Ethiopian economy by the coronavirus pandemic and the ongoing humanitarian crisis in Tigray.

The IMF report offered a growth forecast of 2 percent for the Ethiopian economy in the 2020/21 fiscal year, the country’s lowest rate of growth since 2003.

The report indicated that the pandemic has caused widespread economic instability across Ethiopia, saying, “COVID-19-related uncertainty will still burden nonagricultural activity.”

However, the coronavirus pandemic is not the only factor that has hindered Ethiopia’s economic growth. Agricultural production has also been devastated by flooding, locusts, and the ongoing human rights violations in the Tigray region.

“Projections for agricultural output have been revised downward, reflecting the recent locust swarms and the conflict in Tigray,” said the new IMF report.

In addition to the many thousands of civilians that have been killed, the violence in Tigray has forced the displacement of at least two million people from their homes. The war crimes and human rights abuses being committed in Tigray are not only a humanitarian crisis, but also a source of economic instability, leaving a lasting impact.

As an Ethiopian himself, Director of the IMF’s African Department Abebe Aemro Selassie could not comment specifically about Ethiopia’s political issues. However, he told Today News Africa’s Simon Ateba Thursday, “Needless to say, the tremendous suffering that we see in my country… it goes without saying that it’s heartbreaking.”

“Getting peace and stability, not just for Ethiopia but for every country, is going to be paramount for any kind of development progress,” said Abebe during the IMF’s Thursday press briefing.

Referring to the humanitarian crisis in Tigray, IMF Managing Director Kristalina Georgiva told Today News Africa in March, “We are concerned, and we are monitoring very closely how the situation evolves. It is very important that at the time of a crisis, the price of this crisis is not paid by the suffering of ordinary people.”

The IMF said Thursday that sub-Saharan Africa is expected to be the world’s slowest growing region in 2021 and its economic recovery will lag behind the rest of the world with a cumulative per capita GDP growth over the 2020-25 period projected at 3.6 percent, compared to 14 percent in the rest of the world.

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