Diplomats' Note

A Week in the Horn 02.04.2021

In this Edition

News in Brief

The Usual Egyptian Bravado

Stock Market Exchange: on its way to realization in Ethiopia

Africa and the African Union

The AfCFTA Secretariat and the UN Development Programme (UNDP) on Monday (March 29) signed a strategic partnership to promote trade as a stimulus for Africa’s socio-economic recovery from the COVID-19 crisis, and as a driver of sustainable development particularly for women and youth in Africa, in line with the SDGs and Agenda 2063, Africas’ development blueprint. The agreement was sealed by the AfCFTA Secretary-General, Wamkele Mene, accompanied by Ambassador Fatima Mohammed Kyari, Permanent Observer of the African Union to the United Nations, and by the UN Assistant Secretary-General and Director of the UNDP Regional Bureau for Africa, Ahunna Eziakonwa.

The African Union Commission convened the 2nd Virtual Forum of Ministers responsible for Arts, Culture and Heritage to present, discuss and launch the Concept Note and Roadmap of the Theme of the Year for 2021. The Forum also presented an opportunity for Member States to reflect on their contributions on the implementation of the roadmap on the AU theme of the year for 2021; popularizing the AU theme of the year for 2021 and sensitizing them to engage and participate in the implementation of its matrix of activities and programmes.

The Finance Ministers of the Horn of Africa Region have on Wednesday (March 31) deliberated regional cooperation and development issues and explored ways to enhance regional development and address economic problems observed in the region. Their discussion mainly focused on alleviating the Coronavirus-induced economic crisis, desert locust swarms, and food security challenges in the Horn of Africa. On the occasion, Ethiopian Finance Minister, Ahmed Shede stressed the need to enhanced regional cooperation to tackle further economic turmoil in the Horn, calling for collective efforts to mitigate growing challenges related to debt burden problems aggravated by the prevalence of the pandemic.

Ethiopia

Prime Minister Abiy Ahmed (Ph.D.) has congratulated the people of Ethiopia for the success Ethiopia’s men football team demonstrated in qualifying for the 2021 Africa Cup of Nations (AFCON 2021) after eight years. In his Facebook post on Wednesday (March 31), the Premier stated that the football team’s success showcased the fruit of teamwork. Ethiopia is qualified for the tournament finishing as Group K runner-up after Ivory Coast. AFCON 2021 is scheduled to take place in January – February 2022 in Cameroon. AFCON 2021 will be Ethiopia’s 12th participation in the continental tournament and the country hosted and won the African Cup of Nations in 1962.

While he was on a two-day visit to the State of Eritrea last week, Prime Minister Abiy Ahmed had issued a statement that said, “In our March 26, 2021 discussions with President Isaias Afwerki during my visit to Asmera, the government of Eritrea has agreed to withdraw its forces out of the Ethiopian border. The Ethiopian National Defense Force will take over guarding the border areas effective immediately.” The statement further reads “Ethiopia and Eritrea will continue strengthening their bilateral relations and economic cooperation ambitions. We will continue building on the spirit of trust and good neighbourliness between our two countries as embarked upon in 2018. In particular, restoring trust based people-to-people relations among our citizens in the Tigray region and fellow Eritreans across the border is essential.”

Prime Minister Abiy Ahmed took part in the “Addis Weg” regular dialogue forum at the Office of the Prime Minister on Tuesday (March 31) held under the theme “Peace and Security during Election” and called upon all stakeholders to play their share in making the upcoming general elections peaceful. He expressed his views regarding the risk of election violence that might be instigated by some mercenaries. He reassured the participants of the forum that there will not be a risk of election violence in cities calling the community to stay vigilant and inform security forces if they see any suspicious activity in the time of elections. The upcoming election brings both boon and bane to Ethiopia, the premier said, calling the general public to understand this reality and choose peaceful alternatives.

In related news, the government of Ethiopia has undertaken the necessary preparations to make the upcoming national election peaceful, National Security Advisor of the Prime Minister, Gedu Andargachew disclosed. The Advisor made the remark on Wednesday (March 31) at a discussion held as part of the “Addis Weg” regular dialogue forum at the Office of the Prime Minister under the theme “Peace and Security during Election”. He added that a national election committee has already been established and begun to work to ensure the peaceful accomplishment of the election. Federal Police, National Intelligence and Security Service, and other vital security institutions are part of the established committee, Gedu pointed out. According to him, the government has undertaken the necessary preparations to ensure voters, political parties, election officials, observers, and members of the press do their job peacefully during the election.

The trilateral discussion on the Grand Ethiopian Renaissance Dam (GERD) is expected to resume over the coming weekend, said the Ministry of Water, Irrigation and Energy on Thursday (April 01). The meeting will be held under the Chairmanship of the new AU Chair, the DRC and based on the invitations extended by the Chair to Ministers of Foreign Affairs and Ministers of Water of the three countries. According to Dr Seleshi Bekele, Ministry of Water, Irrigation and Energy, experts from AU and the three countries as well as observers are expected to attend the meeting.

Close to 79 percent of the construction of the Grand Ethiopian Renaissance Dam (GERD) has been accomplished and the dam would conduct a preliminary energy-generating trial this year, according to GERD project management. In connection with the 10th anniversary of the commencement of the GERD, the GERD project Manager Kifle Horo said the Dam, which is 1,780 meters high and expected to generate 15,695 GWh annually, would start a pre-operational energy generation pilot this year. Kifle noted that over 91 percent of the civil works, 54 percent of the hydro-steel structure, and 53 percent of the electro-mechanical progress have been completed.

Over the weekend, specifically on the 3rd of April 2021, the AU-led tripartite negotiation on the GERD will be held for the first time under the facilitation of the DRC as the current Chair of the African Union. The Government of Ethiopia is not only hopeful of achieving progress in the negotiations but also is taking part in good faith that the dialogue would lead us towards a successful outcome. (See article)

Ethiopian Ambassador in Egypt, Dr. Markos Tekle briefed local and International media in Cairo on Thursday (March 31) the current situation in Ethiopia, the bilateral relations between Ethiopia and Egypt, and the ongoing negotiation on the GERD. He noted the enormous opportunities available between Ethiopia and Egypt to enhance cooperation and underscored the need to address temporary challenges that could affect the success of efforts aimed at utilizing these opportunities. On GERD negotiations, the Ambassador expressed Ethiopia’s principled position and longstanding commitment to resolve outstanding issues through dialogue.  However, unless Ethiopia’s desire to address the issue is not reciprocated, it would be difficult to have a win-win agreement, he said.

The first batch of vaccines donated by China to Ethiopia has reached Bole International Airport, Addis Ababa on Tuesday (March 30). Chinese donation of 300,000 doses of COVID-19 vaccine to Ethiopia is instrumental in helping Ethiopia achieve its target of getting 20 percent of its citizens vaccinated at the end of 2021, the Ministry of Health said. Ambassador Zhao Zhiyuan praised Ethiopia for showcasing strong solidarity with China in the fight against COVID -19 pandemic. Health Minister, Lia Tadesse told The Ethiopian Herald that over the past one year, China has been supporting Ethiopia to stem out the virus.

In a weekly press briefing held on Tuesday (March 30) Spokesperson of the Ministry of Foreign Affairs, Ambassador Dina Mufti said the past week saw increased curiosity of the Western world towards facts on the ground in Ethiopia. He noted that during the past week the western community has manifested interest to critically understand what is really happening in Ethiopia particularly the situation in Tigray.

The highly anticipated stock market is on its way to realization in Ethiopia. The initiative is long overdue as it is vital to have a regulated capital market for a better financial system, to attract investors, enhance economic development, and realize the bigger home-grown economic reform launched by the Prime Minister. (See article)

The UAE on Thursday (April 01) sent an aid plane containing 46 metric tons of food and medical supplies to Ethiopia in support of the humanitarian situation in the Tigray region. Mohamed Salem Al Rashedi, UAE Ambassador to Ethiopia, said, “The UAE has a strong relationship with Ethiopia, and this assistance is part of the directives of the UAE’s wise leadership to provide humanitarian and development assistance to brotherly and friendly peoples.”

Chief Executive of the Tigray Interim Administration, Dr. Mulu Nega, said on Thursday (April 01) efforts are underway to fully restore public services in the regional state. Dr. Mulu said a review of the interim administration’s 100 days in office is underway to identify strengths and weaknesses. Based on results of the evaluation, placement of workers and other reshuffling were made, including the removal of the mayor of the city of Mekelle from office, he said. Regarding humanitarian aid, he said 4.2 people have been reached in relief supply, adding there are still gaps in the distribution of aid in some places, including in Mekelle. The Chief Executive said data are being gathered to commence the second round distribution of aid to those in need after completing the first one. According to Dr. Mulu, the number of displaced people has now reached more than one million and temporary shelters are being erected in Mekelle and Shire areas.

Ethiopia has been developing a roadmap with a view to transforming the country’s food systems by increasing production and productivity, Agriculture Minister Oumer Hussein said. A two-day workshop entitled “Current and Future Prospects of Ethiopian Food Systems” aimed at developing Ethiopian Food System Roadmap opened on Wednesday (March 31). According to the Minister, Ethiopia has a rich policy environment and program relevant to food system transformation; and the food system roadmap under preparation would help to improve the national food systems. The food systems roadmap will also create a new platform by leveraging aligned partnerships across all food systems actors, he stated.

The Ministry of Innovation and Technology of Ethiopia has consulted with a Czech company named LIAZ on the adaptation and utilization of unmanned aerial vehicles (UAV) on Thursday (April 1). LIAZ briefed staff of the ministry and experts from various institutions in the presence of high-ranking government officials including State Minister of Innovation and Technology Minister Dr. Yania Seid, among others. Ways of enhancing Ethiopia’s capacity in using UAV for multi-functional activities were also discussed on the occasion. The ministry and the Czech company have signed an agreement to further cooperate in the sector.

Ethiopians in San Francisco, USA have held a rally to support the law enforcement operation conducted in the Tigray region and ongoing negotiations on the Grand Ethiopian Renaissance Dam on Monday (March 29). The demonstrators said the rally signifies their search for the truth and the acceptance of responsibility by the politicians, media outlets, and Humanitarian organizations. They also recalled all the atrocities that the TPLF had inflicted against the wellbeing of all Ethiopians since its inception to its end as a major political force in the country.

Eritrea

Ethiopia’s Prime Minister, Dr. Abiy Ahmed, returned home on Friday (March 26) after two days of regular, consultative, meetings with President Isaias Afwerki. President Isaias Afwerki bid farewell to the Prime Minister and his delegation on their departure from Asmara International Airport. The extensive consultations between the two leaders focused on bilateral partnership and the joint strategic development programmes on the offing within the framework of broader regional prospects and perspectives. In light of the common strategic partnership and envisioned joint trajectory, the vicious military attacks unleashed in the past five months, and attendant disinformation campaigns were also assessed in depth. The two sides agreed that important lessons have been gleaned from temporary hurdles precipitated by this reality that will further bolster the joint undertakings by the two sides in the period ahead.
The two sides also agreed to hold follow-up consultative meetings in Addis Abeba.

Somalia

The United Nations Security Council on Wednesday (March 31) expressed concern over a standoff in Somalia on holding new elections, the United States’ top U.N. diplomat said. President Mohamed Abdullahi Mohamed’s four-year term ended last month without a successor and Somalia’s parliament was supposed to elect a new president on Feb. 8, but the exercise was delayed because new lawmakers have yet to be picked.

Kenyan troops in Somalia get first doses of Covid-19 vaccine. The jab is part of the ongoing vaccination that started with senior officers at the Ministry of Defence headquarters in Nairobi. This is part of the government’s efforts to ensure essential workers, including troops deployed under the African Union Mission in Somalia (AMISOM), are protected against the deadly virus. The Kenya Defence Forces (KDF) on Saturday (March 27) posted on its social media pages that the exercise was launched by the Director of Medical Services of the KDF Major General (Dr) George Ng’ang’a.

Covid-19 is affecting many people in Somalia with devastating effects as the country records an increase in infections. Reports from central Somalia indicate that up to 15 people died from Covid-19 in a span of a few days at Heral settlement in Galgaduud region, about 80 km northwest of Dusamareb, the capital of Galmudug State of Somalia. Over 20 others were said to be suffering from the effects of Covid-19 by Sunday (March 28). Mr Barshir Dahir Dhagabadan, the chairman of the populous settlement, said that the virus is badly affecting the area.

South Sudan

South Sudan President, Salva Kiir on Sunday (March 27) discussed bilateral relations with the Chairman of Sudan’s Transitional Council, Abdel Fattah al-Burhan. The sideline meeting took place in the South Sudanese capital, Juba. “H.E President Salva Kiir Mayardit and his guest discussed ways of strengthening the bilateral ties between the two countries, as well as the progress of the implementation of the peace agreement of South Sudan and Sudan,” the office of the president said in a statement. Al-Buhran was in the South Sudanese capital for Sudan’s peace talks with the hold-out opposition group led by General Abdel Aziz Adam al-Hilu of the Sudan People’s Liberation-North (SPLM-N) and the Sudan Liberation Movement (SLM) headed by Abdel Wahid al-Nur.

A contingent of 80 Rwandan police officers on Tuesday (March 30) departed for a one-year peacekeeping mission under the United Nations Mission in South Sudan (UNMISS). The Formed Police Unit Three (FPU-3) replaced another unit that was deployed at the UN mission in the country in March last year. Stationed in Malakal, Upper Nile State, the FPU-3 is largely charged with the protection of civilians in internally displaced camps, UN personnel, security of key installations, and humanitarian assistance.

At least14 people were killed and seven others injured in an attack that occurred in Budi County of South Sudan’s Eastern Equatoria State on Sunday, an official said. The state press secretary, Aliandro Lotok was quoted saying unknown gunmen attacked Camp 15 area at around 1:00am [local time] while people were sleeping, killing 12 women and two children. “The state government has condemned the incident in the strongest term possible. We would like to assure our citizens that the state authorities will investigate the attack,” he told Xinhua Monday (March 29).

Sudan

Sudan, Egypt and Ethiopia will meet in the Congolese capital for talks on the filling and operation of the Grand Ethiopian Renaissance Dam on Saturday (April 03). The foreign minister of the riparian countries will meet from 3-5 April in Kinshasa, sources at the foreign ministry and presidency in Kinshasa told the media. It will be the first to be hosted by President Felix Tshisekedi, who took over the chair of the African Union last February. The meeting will be attended by the chairman of the AU’s Commission, Moussa Faki Mahamat, according to Jeune Afrique.

The Transitional Prime Minister, Dr. Abdalla Hamdouk has appreciated the US for supporting Sudan during the Transitional Period and providing the bridge loan with which Sudan paid its arrears to the World Bank. This came when Dr. Hamdouk met on Tuesday (March 30), at his office, the US Special Envoy to Sudan, Donald Booth in the presence of the EU Representative in Sudan, Robert Van Dool and the US Charge d’ Affaires in Khartoum.

The leader of the Sudan People’s Liberation Movement-North (SPLM-N) praised the courage of the head of the Sovereign Council after the signing of the Declaration of Principles (DoP) separating religion and state. The DoP was signed by Adel Fattah al-Burhan and Abdel Aziz al-Hilu Juba on Sunday (March 28), in a ceremony attended by President Salva Kiir and WFP Executive Director David Beasley. The framework agreement provides that the state should be neutral and impartial in religious matters.

The Sudanese and Egyptian armies are conducting new joint air exercises with the participation of special operations units, four months after similar drills. On 15 November 2020, the two armies launched joint air exercises, dubbed The Nile Eagles1, in Sudan’s Marawi military airbase, north of Khartoum. In a press statement on Wednesday (March 31), the Egyptian Army Spokesman Brig-Gen Tamer al-Ruffai said, the participating forces carried out several joint sorties to attack enemy targets and protect vital sites, with the participation of a group of multi-task fighters.

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The Usual Egyptian Bravado

Over the weekend, specifically on the 3rd of April 2021, the AU-led tripartite negotiation on the GERD will be held for the first time under the facilitation of the DRC as the current Chair of the African Union. The Government of Ethiopia is not only hopeful of achieving progress in the negotiations but also is taking part in good faith that the dialogue would lead us towards a successful outcome. 

Despite such optimism from Ethiopia, Egyptian President Abdel Fattah Al Sisi, on 30 March 2021, has publicly said that “there would be severe regional consequences if Egypt’s water supply was impacted by a giant hydropower dam being built by Ethiopia.” The President further added that “…no one can take a drop from Egypt’s water, and if it happens there will be inconceivable instability in the region.”

No one would know what exactly the President would do when the inevitable and what he feared will happen soon. President Al Sisi was clear when he twice spoke in 2020 that military measures are out of option. So this is the first time the President spoke against international law of a threat to use force.  

Though President Al Sisi used a threat of force for the first time, the late ex-president Mohamed Mursi did threaten Ethiopia while he was in office. Before him, ex-president Mohammed Hosni Mubarak did the same and threatened Ethiopia. Before him again, ex-President Anwar Al Sadat did threat Ethiopia in 1979 right after the Camp David agreement with Israel. The worst of all of them was Khedive Ismail Pasha who did invade Ethiopia in 1875 and 1876 who lost both the war and the battle, lost in unbelievable annihilation.

So Ethiopia is used to the use of force from Egypt and much more to a threat to use force. Therefore, this time around, what President Sisi said is not new and Ethiopia will wait and see while preparing for all and any eventuality. In this regard, Ethiopia wants everyone to make no mistake that all options are on the table of Ethiopia too.

Regarding the assertion of the President on the possibility of inconceivable instability in the region, no Egyptian leader spent a night without trying to creating instability in Ethiopia. What President Al Sisi said in the Suez Governorate was an affirmation to Ethiopia what Egyptian leadership had been doing for more than a century.

Ethiopian outlaw armed and non-armed groups since the 1960s have been good visitors of Cairo and its banks. All of our neighbors were encouraged to wage war against Ethiopia since the 1960s. No need to enumerate them here now.

So the president of Egypt didn’t tell us what we didn’t experience with Egypt. Our advice is still that negotiating in good faith is the only way out for Egypt and Sudan as well.

When the president spoke about that no one can take a drop from Egypt’s water, who tried to take a drop of water from Egypt? Egypt’s water supply was not threatened either. So what is the president trying to score?

If he is referring to the water share done by Egypt and Sudan in 1959, His Excellency President Sisi should be advised to simply forget it. Ethiopia is not bound by it, it rejects that water share and would like to underline that if Egypt is genuine about a win-win solution, it should first and foremost renounce the 1959 agreement with Sudan.

Yes, a military drill called Nile Eagles was going on as this article was prepared. Drill, weapons, or creating instability do not further an iota of Egyptian and Sudanese interests. What would protect their interest is a simple recognition of, and agreement to Ethiopia’s next season filling that accounts for only 17% of Ethiopia’s release from the entire Blue Nile, what we call Abbay at home.

It is habitual of Egypt that its president used a threat of force on the eve of the AU-led negotiation in Kinshasa aiming at aborting the negotiation. He can go ahead if that is good for Egypt.

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Stock Market Exchange: on its way to realization in Ethiopia

The idea of a capital market is not a new concept for Ethiopia, as it used to have a similar structure called “Addis Ababa Share Dealing Group” in the imperial era. The group was believed to be the second in Africa next to the Egyptian stock market. However, following the assumption of power by the Communist Derg in 1974 the weakening of private companies led to the demise of the budding capital market in Ethiopia. It is not surprising then to see that Ethiopia is one of the few countries which do not have a regulated capital market system now. The informal stock market in Ethiopia, however, is huge even without properly regulated laws and systems posing risks.  Fortunately, in line with the new homegrown economic policy and the plan to privatize some public institutions, the council of ministers has recently approved a Proclamation for the formation of a regulated stock market in Ethiopia known as the “Ethiopian Securities Exchange” (ESE). 

The need for a regulated stock market or the ESE is to make sure the capital market is safe and secure, to have a legal framework that establishes key institutions for capital market development, and to have a legal ground for key securities and transactions. In the homegrown economic reform program, macroeconomic policy reforms, structural reforms, and sectoral reforms are the main pillars. The development of a capital market was also a core issue with the anticipation of the involvement of international companies in the Ethiopian market with the planned privatization process of some public companies.  But for major international companies to involve in this privatization process, the need for safe and secured financial infrastructure is necessary and a regulated stock market has the potential to provide that safe ground.  Also, the country’s foreign currency requirement can be met using the Diasporas by providing a secured system for them to invest in Ethiopia. Besides, if it decided to collaborate with neighboring countries like Kenya who already have an up and running stock market, the country will benefit even more to fasten the establishment process and to be attractive for foreign direct investment.

In this regard, the National Bank of Ethiopia (NBE) has been assessing and looking at the various initiatives and proposals that have been conducted previously to create a foundation for the draft regulated stock market proclamation. The legal instruments and acts of countries that have similar economic development as Ethiopia and their relative capital market success along with the best industry practice and principle set out by the International Organization of Securities Commission were reviewed. In drafting the proclamation various experts and stakeholders were involved, including the Ministry of Finance, Attorney General, international stock market experts, and of course NBE.

In adopting the proclamation one of the key steps taken by the council of ministers is the establishment of Capital Market Authority (CMA); which is expected to protect investors, to ensure that markets are orderly, fair, and secure, and also to detect and prevent systemic risk. The CMA is going to be an autonomous government authority, which is accountable to the Prime Minister’s office and has its budget and resources. It will have a structure and power that will fill the regulatory vacuum seen in stock trading.

In the proclamation, other institutions are also intended to be set up that are self-regulatory organizations, meaning the industry itself will self-regulate or self-discipline its members with a delegation of power from the CMA. The self-regulation system is important because the capital market doesn’t have a homogeneous structure and has a diverse set of investors involved. Other significant sets of institutions included in the proclamation are the key operators meaning the exchange itself-the Ethiopian securities exchange- securities depository and clearing company which will make sure that securities are deposited, there’s a safekeeping of the securities and also safe clearing of transactions; capital market service providers including brokers, dealers, asset managers, credit rating agencies, etc. There is also a very special tribunal that specializes in the capital market that settles legal issues between the CMA and institutions or amongst the institutions.

Once launched the Ethiopian Securities Exchange (ESE) is going to be a private shareholding company but to start with and build the confidence of the private sector, the government will be entering as a minority shareholder with a 25% share. To have a successful stock exchange it is highly important to create public confidence. The proclamation highly acknowledges the private sectors and hopes to engage foreign investors in the market as they are expected to share experience, technology and bring foreign currency. The participation of foreign investors is expected to assist the ESE to leapfrog to reach the level of many countries internationally. Not only foreign investors but also foreign professionals are expected to participate in setting up the market and in capacity building through cross-fertilization. But the knowledge transfer is only a short-term plan because going forward it is planned to form financial training institute, which will enhance capacity building.

The highly anticipated stock market is on its way to realization in Ethiopia. The initiative is long overdue as it is vital to have a regulated capital market for a better financial system, to attract investors, enhance economic development, and realize the bigger home-grown economic reform launched by the Prime Minister. 

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Spokesperson's Directorate General of the Ministry of Foreign Affairs of the Federal Democratic Republic of Ethiopia.

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