Tuesday’s voting also saw Kiros Hagos sworn in as speaker of the regional council, which had been suspended since the two-year war.

During the discussions that led up to the appointment of Debretsion, council members and TPLF leaders criticized the federal government for failing to implement the terms of the 2022 Pretoria Agreement, which ended the war, and accused it of cutting Tigray off from federal budget subsidies and fuel supply networks.

The vote came just a couple of weeks after TPLF, which was struck off the political party registry last year, held a general assembly in Axum. That meeting also featured criticism of the federal government, and TPLF leaders had hinted at their intentions to remove the “unilaterally elected” TIA president.

Tadesse took over at the helm of the interim administration from Getachew Reda in April 2025, and last month the federal government announced its decision to extend the TIA’s mandate, and Tadesse’s presidency, by one year.

However, the reinstatement of the regional council and the swearing in of the TPLF chairman are the culmination of a political leadership crisis that has been haunting Tigray since the war ended in late 2022. This week’s developments have essentially created two separate regional administrations, once again stoking fears that Tigray might soon find itself embroiled in conflict.

While these concerns are widely shared, political observers note the TPLF has maintained its control of the region throughout the tenure of the TIA, arguing that Getachew Reda and Tadesse Werede held no real power over Tigray’s military apparatus and its zonal and woreda administrations.

The TPLF’s decision to revitalize the pre-war council and elect its president without the federal government’s blessing seemingly brings everything back to square one. In 2020, the regional administration’s decision to hold elections without federal approval was among the key events that led to war.

What is more striking is that this time around, the TPLF is not even recognized as a political party as the National Election Board of Ethiopia (NEBE) revoked its license last year. Furthermore, the terms of the Pretoria Agreement grant the federal government the power to appoint the TIA president.

This week’s development could therefore have far-reaching implications for peace and security in the region, including the prospect of another bloody conflict that could feature the involvement of an array of foreign actors.

The federal government has not yet broken its silence over the reinstatement of the Tigray regional council. Sources in Tigray told The Reporter that a fighter jet was spotted over Mekelle on Tuesday in what they believe was a reconnaissance mission.

“Tadesse could have asserted his power and stopped both the federal government and TPLF before things got worse. But Tadesse remained silent, creating a conducive environment for both sides to pursue their divergent interests,” said one insider, speaking anonymously.

Multiple inside sources who spoke to The Reporter said the TPLF’s move to elect its own regional president three years after the Pretoria Agreement is based on precise calculations. It coincides with the rebuilding and rearmament of its military force, and is linked to domestic and external alliances, they argue.

High on the list of TPLF’s priorities is the return of territories like Wolkait, Humera, and Raya, which are the subject of heated contention with the neighboring Amhara regional administration.

“TPLF believes the federal government intentionally denied the return of these territories to Tigray. They believe the informal forces controlling those disputed areas now are working with the federal government. TPLF will use any means, including armed conflict, to reassert control of these areas. It might then sit for negotiations with the federal government, with better bargaining power,” said the leader of an opposition party in Tigray, who spoke to The Reporter anonymously.

The region’s opposition parties have been engaged in closed meetings in the days following Debretsion’s appointment as president, analyzing whether to side with the federal government or the regional council.

Meanwhile, the TPLF is reportedly moving to cement alliances with newly emerging forces in the region in its bid to wrest control of the disputed territories, according to people familiar with the situation.

These forces include the Agaw Democratic Movement and the Kimant Democratic Movement. The first has a presence in Wag Hemra, and despite having previously come to an agreement with the Amhara regional administration and laid down its arms, has since resumed armed struggle, according to inside sources. The latter is linked to aspirations for the creation of a separate regional state for the Kimant ethnic group.

Both groups operate in the disputed territories separating northern Gonder and western Tigray.

“These forces have been supported financially and trained by TPLF forces. Some of them were trained by TPLF’s Army 70, which is also active in Sudan. There are also other armed militants who are being supported by TPLF. These forces are now reviving in Benishangul and Gambela. TPLF has an alliance with OLA in Oromia and Fano in Amhara. Additionally, TPLF is seeking to initiate an armed struggle in the Somali region if ONLF gains land, and also backing another armed group in southern Ethiopia,” said one source keeping a close eye on the developments.

The source posits TPLF is leaning on these alliances for two reasons.

“First, TPLF knows it cannot win a war against the federal government alone. Secondly, TPLF has assessed that the Tigray public is not willing to mobilize for another bloody war alone. Therefore, TPLF is mobilizing other militants across the country, and from abroad,” the source told The Reporter.

Others argue the TPLF’s primary objective is to create immense pressure on the federal government from all directions, and force it to sign a new agreement.

“TPLF does not want the Pretoria Agreement. TPLF wants a new agreement, which reinstates its license, returns western Tigray to pre-war territorial status, and brings everything back to normal,” said another political party leader from the region.

TPLF’s newfound appetite for alliances is not confined to Ethiopia’s borders. The group has forged strong links with external actors, including Sudan, Egypt, and Eritrea. Eritrea was a key federal ally during the two-year war, and Eritrean troops stand accused of committing grave rights violations in Tigray. The Eritrean government also continues to maintain control of territories within Tigray.

Meanwhile, TPLF’s regional elections coincided with flaring tensions between Ethiopia and Sudan. Earlier this week, the federal government accused the Sudanese Armed Forces (SAF) and Sudan’s military government of providing support to “TPLF mercenaries” and violating Ethiopia’s territorial integrity.

The accusations were levied in a statement issued by the Ministry of Foreign Affairs on Tuesday, and came a day after the Sudanese government accused Ethiopia and the UAE of orchestrating drone attacks on Khartoum International Airport and military sites.

“The people of Ethiopia and Sudan share a historic and enduring bond of friendship. In recognition of the fraternal ties between the two nations, the Government of Ethiopia has exercised restraint and refrained from publicizing the grave violations of Ethiopia’s territorial integrity and national security committed by some belligerents in the Sudanese civil war. These violations include, among others. The extensive use of TPLF mercenaries in the conflict,” reads the statement.

“The Sudanese armed forces have also provided arms and financial support to these mercenaries, thereby facilitating their incursions along Ethiopia’s western frontier. The activities of TPLF mercenaries in Sudan are a matter of public record, and there is simple and credible evidence showing that Sudan is serving as a hub of various anti-Ethiopian forces. It is evident that these hostile actions, as well as the recent and earlier series of allegations by officials of Sudanese Armed Forces, are undertaken at the behest of external patrons seeking to advance their own nefarious agenda,” it continues.

Late Monday night, the Sudanese Foreign Minister and military spokesperson held a press conference where they stated they had “conclusive evidence” that drone attacks on Khartoum International Airport and several Sudanese military sites earlier in the day were launched from Bahir Dar.

The Sudanese Foreign Minister said his country is “ready to enter into an open confrontation with Ethiopia.” The Sudanese government has since recalled its ambassador to Ethiopia.

The TPLF has issued a response to the federal government’s accusations.

“At a moment when the region demands restraint and constructive engagement, such claims serve only to inflame tensions and obscure the urgent need for accountability and genuine peace efforts, the TPLF has never engaged in, nor supported, any activities that undermine regional stability. The people of Tigray have been waiting for the full and faithful implementation of the CoHA, including the safe, voluntary and dignified return of IDPs to their homes. Our forces, including those in western Tigray, remain committed to ensuring that these returns are carried out peacefully, securely and in an orderly manner,” it reads.

The statement also reflected on the regional aspect of re-emerging conflicts.

“We are deeply concerned by a consistent pattern of conduct that risks dragging Ethiopia – and by extension the wider region – into renewed instability and conflict. Escalatory rhetoric, external entanglements, opportunistic alignments with competing regional agendas reflect short-sighted calculations that endanger long-term peace. Such actions not only strain relations with neighboring countries but also risk entrenching Ethiopia in conflict that does not serve the interests of its people,” it reads.

Regarding Eritrea, the federal government of Ethiopia has repeatedly accused Asmara of supporting TPLF and anti-Ethiopian mercenaries. During the 2020-2022 war, Asmara was a staunch supporter of the Ethiopian government, but relations quickly soured after the peace deal.

Today, TPLF and a faction dubbed ‘Tsimdo’ are alleged to be working closely with Asmara.

Eritrea might also soon see sanctions levied on its leaders and military by the US under President Joe Biden in 2021 lifted as the Trump administration considers a rapprochement with Asmara in light of concerns about maritime routes.

Reports over the past weeks indicate the US government is weighing the lifting of sanctions in return for a strategic alliance on the Red Sea, where Yemen’s Houthis have threatened to shut down maritime traffic as a response to Washington’s invasion of Iran.

As a result, Eritrea could see itself break out of decades-long isolation and sanctions and transition into an important US ally in the region.

Analysts warn this could have detrimental effects on Ethiopia.

“The US is looking to relieve Eritrea of its sanctions following Egypt’s lobbying for Asmara. Eritrea, Al-Burhan’s SAF, and Egypt are working together against Ethiopia. They are also supporting armed forces and proxies against Ethiopia. They seek to stop Ethiopia from advancing its sea access agenda and force the country to negotiate over GERD. The US might even move to install a military base on the Eritrean coast in exchange for lifting sanctions. This will deter Ethiopia’s efforts to gain access to the Red Sea,” said a diplomat and geopolitical analyst who spoke to The Reporter anonymously.

The diplomat asserts that with this external support, TPLF could be emboldened to push for Tigray’s secession.

“The ultimate move for TPLF, if it runs out of options to pressure the federal government, will be to announce Tigray as a de facto state. If this happens, its foreign allies will have a pretext to officially support the TPLF. Turkiye, Somalia, Egypt, Sudan, and Eritrea will use this pretext to stop Ethiopia from recognizing Somaliland, creating a tit-for-tat scenario,” said the diplomat.

Analysts agree that the situation in Sudan is also critical for what happens next in Ethiopia as well as the Horn of Africa.

“Addressing the forces behind Sudan’s warring parties is critical to address issues in the Horn of Africa. Ethiopia is highly concerned that Al-Burhan’s SAF is supported by the Muslim Brotherhood and Egypt. If this force becomes Sudan’s government, Sudan will become a harbor for Islamic extremists forces while relentlessly attacking Ethiopia,” said one analyst. “The US could stop the forces behind Sudan’s warring parties, however Washington does not want to upset Egypt by opposing SAF. Trump continues appeasing El-Sisi to secure Egypt’s backing in the way out of the Gaza crisis. The US also believes that as long as Eritrea is contained, what happens in Ethiopia is a domestic issue.”

As Iran and the US oscillate between war, now in its third month, and negotiation, questions surrounding the Strait of Hormuz and the global economic impacts of its closure have only grown louder. The stalemate has also put the spotlight on the other key maritime chokepoint in the wider region: Bab el Mandeb.

At its narrowest point, the strait separates Djibouti and Yemen by less than 50 kilometers, and its strategic location has only been made more vital by the events unfolding in the Persian Gulf, and threats from Iran-allied Houthis in Yemen to shut down maritime traffic on the Red Sea.

Political and security analysts suggest Washington is already taking steps to secure the Red Sea’s western coast, and reports published in recent weeks appear to back their arguments.

Last week, The Wall Street Journal quoted US officials as saying that Washington seeks a rapprochement with Eritrea. Massad Boulos, a senior figure in the Trump administration, reportedly told foreign counterparts that the US is considering lifting some sanctions on Eritrea as part of a push to restore diplomatic ties, which have been all but severed over the past two decades.

Successive US administrations have opted not to appoint an ambassador to Asmara, and the post has remained vacant since 2010. In 2021, Washington levied a new round of sanctions on the regime of Isaias Afwerki in light of grave rights violations committed by the Eritrean military in Tigray during the two-year war.

Despite this, the Trump administration is looking to repair US relations with Eritrea as part of a scramble to establish a strong presence on the Red Sea. In a statement issued this week, the Eritrean embassy in Washington applauded what it described as “a shift towards engagement.”

“A fundamental reality must be recognized. Decades of pressure, sanctions, and isolation have not produced positive outcomes, neither for US policy objectives nor for regional stability. There is now increasing acknowledgment, even within US policy circles, that a shift towards engagement, rather than misplaced and unwarranted coercion, is both necessary and overdue,” reads the statement.

It hints that Isaias Afwerki’s government is open to collaborating with the US, but on its own terms.

““Eritrea’s position has been consistent and principled. Since independence, it has pursued a policy anchored in sovereignty, non-interference, and an independent development policy that eschews structural and perpetual dependency. Eritrea does not subscribe to dependency-based models. Instead, it promotes mutually beneficial partnerships rooted in trade, investment, and respect for national ownership of development priorities; an approach aligned with evolving global trends,” reads the statement.

Eritrea is not alone in stoking US interest recently.

Last week, US Senator Ted Cruz also renewed his calls for the Trump administration to recognize Somaliland as an independent and sovereign state, arguing the self-declared African republic would be a significant strategic partner if Washington were to formalize relations.

“Somaliland is a geo-strategic US maritime security partner in Africa,” Cruz said during a hearing on US counterterrorism approaches in Africa. “It sits along the Gulf of Aden near one of the world’s busiest shipping corridors and its forces actively contribute to counterterrorism and anti-piracy missions.”

In December, Israel became the first to recognize Somaliland as a sovereign nation. Earlier this month, Israel appointed Michael Lotem, former ambassador to Kenya, as its first non-resident ambassador to the Republic of Somaliland. The move drew criticism and condemnation from the African Union (AU) and a dozen governments, including those of Somalia, Sudan, Saudi Arabia, Pakistan, and Egypt.

Despite this, calls from US lawmakers to jump aboard the recognition bandwagon have intensified, and political analysts like Costantinos Berhutesfa (PhD) argue this is part of a recalibration of American presence in the wider region.

“The US aims to maintain control over the Red Sea and Indian Ocean relying not on the Gulf, but on North African and Horn countries,” he said, naming Egypt, Sudan, Eritrea, and Ethiopia as components of the strategy. Costantinos believes Somalia’s continued instability excludes it from the list of “candidates.”

The analyst argues the war in Iran has changed US perspective on the utility of military bases in the Gulf, and posits that Gulf countries’ pro-US stance has made them targets not only for Iran, but extremist groups.

“American military bases in the Gulf have proven they cannot do anything for US interests there,” said Costantinos.

Another Addis Ababa-based geopolitical analyst who spoke to The Reporter anonymously made a similar argument.

“Fundamentally, Iran wants the US military out of the Gulf. Iran has targeted Saudi, UAE, Qatar, and others because they host US military bases. Reports indicate the US has decided to reposition its military, from the Gulf to the African side. Now, Egypt, Eritrea, Ethiopia, and Somaliland are being seen as important assets. This is why the US is considering recognizing Somaliland and relief for Eritrea after decades of sanctions,” said the analyst.

He sees US intentions to lift sanctions on Eritrea as a “sensitive issue” for Ethiopia, and suggests America’s plans for Eritrea may have to wait until Isaias Afwerki is no longer at the helm.

On the other hand, Costantinos argues the situation could work out favorably for both Ethiopia and Eritrea.

“Ethiopia might realize its interest in sea access. Ethiopia looks to access Assab. Eritrea seeks to be free of sanctions and rejoin the international community to benefit politically, economically, and diplomatically,” said Costantinos, suggesting the Trump administration could push the two governments to come to an agreement.

However, the analyst contends this scenario is unlikely under current Eritrean leadership.

“The US is pandering to Eritrea most likely in exchange for a military base on its coast. But the problem is Isaias is too rigid to allow US military presence in Eritrea. His stance on the US is well known. He said it all in his speech in Russia,” said the analyst, referring to a 2023 address in Moscow in which the Eritrean President stated, “There is no Russia-Ukraine war. This is war declared by NATO.”

The analyst argues that continued resistance from the Eritrean government could mean “Isaias might not have much more time in power given America’s growing interest in Eritrea.”

However, he notes the situation is a complex web of relationships spanning the US, Israel, Somaliland, Djibouti, where the US operates a military base, and Yemen. The analyst predicts US military presence in Eritrea would immediately be countered by increased Chinese and Russian presence in Ethiopia.

At the moment, US plans to revive relations with Eritrea are not yet official, and neither is talk of recognizing Somaliland. However, observers say the odds of either of these being realized only grow bigger as the war in Iran drags on.

Studies estimate that more than half of Ethiopia’s 113 million hectares of geography has a slope of less than 15 percent and is therefore suitable for irrigation. Despite this, irrigation projects all across the country remain bogged down by a number of factors.

A 2025 assessment published by Tadesse Kuma (PhD), senior researcher at the Policy Studies Institute, notes that failure to shift from rain-based to irrigated agriculture costs the Ethiopian economy over one-third of its growth potential, while locking millions in poverty.

The study also criticizes state irrigation projects for their shortcomings, arguing that botched investments in irrigation have done more harm than good in recent decades.

It concludes that 13 large-scale irrigation schemes that were expected to service more than 550,000 hectares have managed to irrigate less than 44,000 hectares, or just eight percent. This is despite nearly 61 billion Birr in irrigation investment prior to 2021, pointing to substantial losses in terms of production, employment, and economic returns.

When Prime Minister Abiy Ahmed (PhD) appointed Abraham Belay (PhD) to lead the newly formed Ministry of Irrigation and Lowlands in 2024, hopes were high that he could turn things around and unlock the sector’s potential.

Nonetheless, exactly two years later, Ethiopia’s irrigation schemes remain as bogged down as ever despite efforts to empower the Ministry and re-ignite stalled projects.

The multidimensional bottlenecks choking irrigation came under the spotlight this week when the Minister appeared in Parliament to present a nine-month performance report. MPs including Etsegenet Mengistu, chair of the parliamentary Legal and Justice Affairs Committee, were curious about the lack of progress.

“Ethiopia’s potential in irrigation is immense. The Ministry of Irrigation and Lowland has the mandate to realize Ethiopia’s efforts toward achieving food sovereignty. The sector has been plagued by non performance, particularly until the political change of 2018. The Ministry has been changing several things since then, but if Ethiopia had realized its potential in irrigation, productivity would have increased substantially,” said Etsegenet.

Lawmakers wanted updates on several lagging irrigation schemes, including those that began in the former Southern Nations Nationalities and Peoples’ Regional State (SNNPR) but have seemingly stopped since SNNPR was split into new regional administrations, as well as schemes that have suffered from a lack of security.

Abraham began his report with a call for more funding, citing that the Ministry is working with a budget of 17 billion Birr (after adjustments) this year despite needing at least three times as much to carry out its responsibilities.

“These past two years, we decided not to embark on any new projects in light of the budget constraints. We’ve decided only to finalize projects already in progress and those facing delays. Even though we have high priority projects designed and in the pipeline, we cannot move ahead with them until we finalize the ones that came before,” said the Minister.

He told MPs that prior to his appointment, the Ministry lacked basic institutional functions like a contract administration office. Abraham claims that over the past two years and under his leadership, the Ministry has opened a functional project office and inaugurated six irrigation schemes that had stalled for years.

He also told lawmakers that experts are busy drafting an irrigation policy with a complementary strategy and framework.

Abraham then went on to provide a point-by-point description of the conditions surrounding the progress of several irrigation projects around the country.

The Minister repeatedly cited security problems as an obstacle to progress, including for the Beles irrigation project in the Amhara Regional State. He told MPs the contractor hired to implement the scheme was unable to access the project site, where progress has stalled entirely.

Abraham said a tender has been floated for a new contractor, and expressed optimism that the project would soon get back off the ground.

Another large-scale irrigation project facing prolonged delays partly due to security issues is the Arjo Didessa Dam in the Oromia Regional State. The project was launched 15 years ago with a 755 million Birr cost estimate, to be finalized within 18 months. Thirteen years on, the project has consumed nearly seven billion Birr.

Abraham told MPs the contractor had been unable to conduct work due to security concerns, but stated that conditions have improved and the dam and spillway have been finalized.

“The saddle dam will be finished soon,” said the Minister.

Work has partially resumed on the Angar irrigation project in Wellega, where the Minister says contractors were repeatedly attacked by forces linked to OLF-Shene and Fano. Other schemes, like Haji and Mechacha, have also suffered from security-related problems, according to Abraham.

Outside of security, however, irrigation schemes are beset by issues related to right of way compensation and poor design. The Minister criticized irrigation projects launched under the EPRDF regime of lacking feasibility studies and proper design.

Among them is the Kesem irrigation scheme, which had been delayed by concerns about flooding downstream communities. While that issue has been cleared up, the Minister says the design requires a rework.

“We’re working on electromechanical redesigns for Kesem. We are replacing ill-suited materials previously used for the project,” he told lawmakers.

Design flaws are present in irrigation projects in Ramis, Logia, Mechala, and Shinfa, according to Abraham.

In Weibo, complications arising from an irrigation scheme’s proximity to the Gilgil Gibe III hydropower project have also forced a redesign, according to Abraham. The Weibo project was previously under the SNNPR regional administration, which has since split into three new regional states.

The reorganization is also contributing to delays, according to the Minister.

Like many other irrigation schemes in the country, Weibo faces substantial right of way compensation claims, which the Minister warns is costing the country.

Two years ago, the government introduced legislation that made regional administrations liable for compensation claims for federal projects in their respective jurisdictions. However, the Minister notes the proclamation has done little to stem demands for compensation from regional administrations.

“Unlike electricity, telecoms, or other commercial projects, irrigation projects are not commercial. They’re built for regional states’ productivity and water supply. So regions should pay. But the trend is that woreda and regional administrations are pressuring banks and taking money out of accounts belonging to our Ministry. This is a huge problem,” said Abraham.

He told MPs that even funds received by the Ministry from development partners are subject to seizure by regional and local authorities.

“This is wrong. The practice of taking government funding by force and using it for other purposes must stop,” said Abraham.

He told lawmakers the issue has been tabled to the ministries of Justice and Finance. The Minister also said that fuel supply disruptions have impacted several projects.

MPs appreciated the Ministry’s efforts to rework and finalize irrigation schemes that have been held up for decades, but they were left unsatisfied with the lack of progress compared to the country’s immense potential.

Lawmakers also stated that although security concerns have been an outstanding issue at many irrigation project sites, many located in peaceful areas remain subject to delays, overspending, and inefficiency.

The 2025 PSI study underlines the importance of finalizing irrigation schemes.

The author cautioned that factors such as rainfall variability, heat waves, land degradation, and low soil fertility linked to climate change pose serious threats to Ethiopian agricultural productivity.

Tadesse (PhD) stressed that, given Ethiopia’s population of 130 million, thoughtful policy actions are needed to boost sustainable agricultural production and productivity. The paper emphasized enhanced public and private investment in irrigation development as a core strategy to reduce the economy’s dependence on rainfall and support sustainable growth and development.

Over the past few years however, that idealism has shifted to a system of multipolar rivalry, coercion, and extraction, where superpowers, particularly the United States, appear to be able to do whatever they desire.

The second coming to office of President Donald Trump has only accelerated this decline. His administration’s controversial and often illegal decisions have not only disrupted global supply systems, but also upended traditional international relations and diplomatic order.

Perhaps the most notable outcome of the White House’s recent policies is the growing need for middle powers and developing countries to forge alliances to rewrite the global order in the face of dwindling trust in superpowers and international institutions like the UN.

The line between the Global South and developed nations also seems to be undergoing a redrawing, as even the USA’s traditional allies seek a departure from established power structures and partnerships.

Middle powers in particular appear to be leading the charge to craft a new global order favoring multilateral foreign policy and the formation of coalitions rather than unilateral decision making in foreign policy.

The style of diplomacy used by middle powers has been labeled “niche diplomacy,” mainly because middle powers have to follow limited foreign-policy objectives as a result of their power capabilities, which are lower than those of great powers or superpowers.

However, middle powers do not challenge the status quo in the international system; they are not revisionist or transformative states. But following Trump’s growing assertions, which have all but devastated the traditional rules-based global order, the middle powers are now seeking to restore multilateralism under new global terms.

Among them are Canada, India, Brazil, Argentina, Mexico, Saudi Arabia, Italy and most G20 members. Depending on the definition, the group can also extend to include a host of other nations, such as Turkiye, Malaysia, and South Africa.

An example of the widening rift was Washington’s decision last year to refuse participation in the G20 summit in South Africa. The move led South African Foreign Minister Ronald Lamola to declare that “the G20 should send a clear message that the world can move on with or without the US.” French President Emmanuel Macron also insisted the American absence “should not block us.”

Canada stands out as the middle power that has done the most to chart new paths in this tumultuous time for global politics. During the World Economic Forum in Davos last January, Canadian PM Mark Carney delivered a sobering speech that outlined just how far the repercussions of the fallout can go.

“Tonight, I’ll talk about a rupture in the world order, the end of a pleasant fiction, and the beginning of a harsh reality where geopolitics—where the large, main power—is submitted to no limits, no constraints. On the other hand, I would like to tell you that the other countries, particularly intermediate powers like Canada, are not powerless. They have the capacity to build a new order that encompasses our values, like respect for human rights, sustainable development, solidarity, sovereignty, and territorial integrity of the various states. The power of the less powerful starts with honesty,” said Carney.

The Canadian leader has since made an official visit to China, forging new alliances and reaching new deals on investments, trade and overall cooperation.

This is significant because the US has traditionally been the destination for over two-thirds of Canadian exports, but that has changed in the wake of Trump’s destructive tariff policies and inflammatory rhetoric. The US President has previously referred to Canada as “the 51st state,” encroaching on its sovereignty and undoing much of the friendly relations the two countries have enjoyed for so long.

As a result, like many other middle powers and emerging powers affected by Washington’s erratic policies, Canada is seeking to strengthen old ties and forge new ones, including in Africa.

This week, the Canadian embassy in Addis Ababa and Addis Ababa University organized a forum for discussions on the unfolding global dynamics. The event, which took solace in the University’s Ras Mekonen Hall, focused on evaluating Ethio-Canada relations since they began 60 years ago, Ethiopia’s evolving international role, and the contributions of middle powers to global governance in a multipolar world. Diplomats, scholars, and students took part.

Talks began with a review of Canada’s role in Ethiopia over the past six decades, which has seen significant contributions in education and manpower development, development finance, climate, peace keeping missions, technology provisions and investment, among others. Canada, a large financier behind the African Development Bank (AfDB), the World Bank, and other international finance institutions, has backed several projects in Ethiopia.

The first Addis Ababa University college president was also a Canadian. Currently, over 50,000 Ethiopian diaspora reside in Canada.

The talks made it clear that Canada is looking to scale up its engagements with Ethiopia, and also use Ethiopia as a gateway to Africa and the AU, with an interest in the potential of trade deals like the African Continental Free Trade Agreement (AfCFTA).

During the event, Canadian Ambassador Nicolas Simard fielded several questions related to how his country intends to handle Ethiopian interests surrounding maritime access, the Grand Ethiopian Renaissance Dam (GERD), and other national priorities. Questions were also raised about Trump’s repeated offers to mediate between Egypt and Ethiopia in the dispute over GERD.

“Regarding GERD, we believe GERD showcases Ethiopia’s commitment to green energy. We also anticipate that when Ethiopia organizes the COP32 by next year, the GERD issue will get more attention. We want to be a partner with Ethiopia on the renewable energy agenda. Transboundary waters are a sticky issue and very sensitive. Regarding GERD, it is possible to have a multi-country commission to reach consensus between Ethiopia, Sudan and Egypt. We believe peaceful agreement can be reached on GERD with those countries,” said the Ambassador.

“On sea access, we encourage Ethiopian authorities to find a peaceful solution on sea access benefits for all. A lot of countries around the world support Ethiopia’s cause and quest for sea access. But it must be through conversation, to avoid tensions in the region.”

Simard also provided his insights into pressing global issues.

“We are going through rough times. There is war and crisis in Ukraine, Iran, Sudan and other places. Civilians are suffering. International institutions like the UN should reform. The kind of coalition middle powers like Canada are looking for now, is not about creating new global institutions, but reforming existing multilateral institutions like the UN. Middle powers like Canada can play roles in such institutions. We need Africa; we need the young talent, we need Ethiopia. We want to capitalize our relations with Ethiopia. We are now moving from an aid approach to partnership, aligning our policy with the Ethiopian government’s agenda. As the international order breaks down, we want to build a coalition with Ethiopia and Africa. Ethiopian students now in campuses, they will uphold this new partnership and find a solution for the raptures in the rules based global order,” stated Simard.

“The US has been Canada’s largest export market. But following the recent tariff raises by the US, Canada decided to explore other opportunities around the world, including in Ethiopia. Canada decided to redouble its trade, investment and overall economic cooperation and other collaborations in each sector. We will bring our big investors. However, peace and stability must be ensured in Ethiopia, to bring our investors. For instance, mining takes billions, but if our mining investors cannot move from place to place inside Ethiopia, that would be difficult,” he added.

Dawit Afework, a senior official at the Ministry of Foreign Affairs, also stressed Ethiopia is working hard to navigate the hard realities of today’s international system by working with all parties including aligning its interests with middle powers like Canada.

“Ethiopia and Canada are currently negotiating on trade and investment protection agreements, as Ethiopia opens up its economy. We are expecting Canadian investors in mining, agro processing and other sectors soon,” said Dawit.

He was asked how Ethiopia intends to balance its foreign policy with countries in the western and eastern camps.

“We are working with all partners. Our priority is Ethiopia’s national interest. So we align with the different agreements we signed with different countries. We are doing a balanced, win-win foreign policy. Canada has been a longstanding, reliable partner. Ethiopia is working to improve in several areas including development, peace and stability. Such a coalition is also important to push for a rearranged coalition within the UN framework,” said the foreign affairs official.

Asnake Kefale (PhD) is a leading political science researcher and lecturer at Addis Ababa University. He relates today’s coercion-based international system and the rivalry between superpowers with the “realism” that reigned before the Second World War.

“Ethiopia’s foreign policy during the Imperial, Derg, and other regimes has always been about balancing between the west and east. Ethiopia’s decision to join BRICS is also good, even though BRICS is not as strong as anticipated. Now, the rules-based international system is in grave danger. So Ethiopia joining BRICS is very good,” said Asnake.

He noted that current conditions are enabling middle powers to gain more influence in geopolitics.

“Ethiopia has been a recipient of aid from Canada. This needs to change. There are many opportunities in Ethiopia. The middle powers also need to work on several issues. They can revitalize strong global CSOs activism to stop issues like conflicts, nuclear proliferation, and climate issues. The roles of middle powers should be redefined in today’s atmosphere,” said the researcher.

At the time, the decision drew fierce criticism from opposition parties who argued the postponement was unconstitutional. Some called for the establishment of a transitional government until the vote could take place.

This year, Ethiopia is preparing to conduct the seventh general election slated to take place on June 1.

This time around, the tables appear to have turned. Electoral officials and the ruling party are intent on organizing the vote in accordance with the timeline, while opposition parties are calling for a postponement, citing security concerns and unfavorable conditions in large swathes of the country.

Nonetheless, officials at the National Election Board of Ethiopia (NEBE) are intent on going ahead with parliamentary and regional elections (except in Tigray) and have been busy preparing for it over the past few months. Candidate registration has already been completed, while voter registration is ongoing.

This year is also set to mark the introduction of digital voting in a hybrid system.

Meanwhile, opposition parties have been airing grave concerns about security conditions in many parts of the country, particularly in Amhara and Oromia, where the federal government is still mired in conflict with armed groups. Over the last several months, opposition figures have repeatedly issued statements decrying the lack of a conducive environment for free, fair, and democratic elections.

In response, the NEBE has rolled out an electoral map, categorizing constituencies according to their perceived security status. Constituencies highlighted in green on the map are entirely stable, while those colored red are areas where active conflict is likely to affect voting, according to the Board. Constituencies highlighted in yellow are somewhere in between.

Following its publication last month, the electoral map sparked criticism from opposition parties, who argue it was drawn solely on the basis of unreliable government data.

“That data came from regional administrations and security offices at the national, regional, and local levels. It does not portray the realities on the ground,” said an opposition leader who spoke to The Reporter on condition of anonymity.

“For instance, the Oromia regional administration claims 95 percent of the region is ‘green,’ while around 55 percent of the Amhara region is ‘yellow.’ The latter is more realistic, but the data disregards the fact that armed groups maintain a strong presence in a significant portion of both states. We’ve been unable to register candidates or conduct campaigns in areas that have been designated as safe. Several parties have been unable to engage actively outside of the capital.”

The discrepancies prompted opposition parties to come up with their own analysis of security conditions in the country, which they presented to electoral officials

This in turn has pushed the NEBE to announce plans to conduct a verification assessment in a bid to reconcile the two narratives. This week, the Board convened political parties, CSOs, and other stakeholders to eke out the details of the assessment and the task force mandated with carrying it out.

“Discussions have been underway based on the security analyses received from government security offices and political parties. We are in talks to determine the role of the team to be deployed to verify security conditions,” said Melatwork Hailu, NEBE chairperson, while opening the discussions on Monday.

Despite assurances from electoral officials, opposition parties remain adamant that conditions in the country are unfit for a free and fair vote.

The Ethiopian Peoples’ Revolutionary Party (EPRP), for instance, issued a strong statement on Wednesday, April 8, 2026, opposing plans to go ahead with the vote.

“During its reign over the past eight years, the Prosperity Party has been unable to end protracted conflicts, ethnic-based arrests and killings, prolonged suffering of IDPs, or alleviate poverty for millions across the country,” reads the statement, which also calls on the government to cease drone strikes on civilians, open up the civic and media space, and invite armed groups to take part in the vote through negotiations.

A number of opposition figures who spoke to The Reporter further elaborated the problems facing them and voters across the country.

“We raised several issues during the discussions with NEBE this week. There are serious security threats in Oromia, Amhara, Benishangul, and Southern Ethiopia,” said an opposition leader from the South Ethiopia Regional State who participated in this week’s talks, which were closed to the media.

“Even in areas where opposition parties agree are peaceful, it is very difficult for us due to pressures from the ruling party. In areas where opposition parties seem to have strong support, ruling party leaders are creating pressures. For instance, government officials threaten residents to vote for the ruling party by threatening them with displacement. Officials also force residents to take out voter cards, but then take the cards and keep it themselves. Opposition candidates are being detained or are facing threats. In many cases, members of the ruling party and government officials have been assigned as election facilitators,” he told The Reporter.

The accusations prompted the Election Board to issue a statement this week warning against unconstitutional pressures on voters.

“Nobody has the right to force citizens to register for the vote or threaten to dismiss them from their jobs or cut their salaries unless they do so. Unless these actions stop, the Board will take measures including closing polling stations. Citizens have a constitutional right to vote, but they cannot be forced to,” reads the statement.

Meanwhile, despite the concerns, government officials argue the vote must go ahead as planned to avoid the creation of a power vacuum, which they say will result in a national crisis.

Opposition figures, however, do not agree with this line of reasoning.

“The government is creating an environment where opposition parties cannot thrive, and the ruling party can win without any real contest. Holding an election like this is more dangerous than not having one at all. The government has a responsibility to make elections free, fair, and democratic. Using power vacuums and the national interest as an excuse is just a way to make the vote favorable for the ruling party,” said one opposition leader.

Still, officials say they are making efforts to create favorable conditions for a fair vote. They claim they are willing to engage in talks with the leaders of armed groups in Oromia and Amhara. Last week, Oromia president Shimelis Abdisa said he was “ready to go personally into the bush and speak with the leaders of armed groups.”

Security officers, too, say they are working towards the same goal. A statement issued by Federal Police Commissioner Demelash Gebremichael this week, following a national security conference, outlined some of these efforts.

“All security forces are working to realize the election. The conference also discussed the impact of media on the election, and identified all the positive and negative media [outlets]. We have identified local and foreign media that are working to sabotage the election. This conference concluded there are no security issues that could affect the upcoming vote. In some parts of the country, there are minor issues that need some work. The security task force and intelligence bureaus are working together to eliminate threats. The Ethiopian National Defense Force is leading the operations. We can clear these threats in the time remaining before the vote in June,” said Demelash.

Officials also claim that any outstanding political issues will be resolved through the national dialogue and transitional justice initiatives, which are ongoing despite setbacks.

Just like the last vote, the seventh national election is set to exclude Tigray, where the Tigray Interim Administration (TIA) is still in charge. This week saw the TIA’s term, as well as that of its president, Lt. General Tadesse Werede, extended by an additional year.

Located just 150 miles north-west of the capital Mogadishu, Baidowa is a strategic city that has served as a base for international peacekeepers, including Ethiopian troops, and humanitarian agencies in an area affected by drought, conflict and displacement.

Somali President Hassan Sheikh Mohamud ordered a large contingent of troops to take over Baidowa following the South West State administration’s announcement of its intentions to sever relations with the federal government in Mogadishu, mimicking earlier moves by states like Jubaland, Puntland, and Somaliland, among others.

The military operation also came following the re-election of Abdiaziz Hassan Mohamed Laftagareen, who was set to continue his seven-year tenure as president of the South West State for five additional years.

However, the federal intervention has forced Laftagareen to flee after resigning from his post on March 30, 2026.

The internal conflict and tensions between state administrations and the federal government in Somalia has led the African Union to call for restraint. Meanwhile, Mogadishu warns that acts of retaliation will not be tolerated.

Analysts predict the military force deployed in the South West State by Mogadishu could soon head to other breakaway jurisdictions. The strength of the military response has also led them to question why Mogadishu has been unable to override Al-Shabaab in the same way.

Many agree that Somalia’s newfound military strength is rooted in substantial support from Turkiye and Egypt. They observe Hassan Sheikh’s government utilized weaponry and other forms of military support from Ankara and Cairo in its bid to purge Laftagareen from Baidowa.

“Hassan Sheikh is now fully relying on Turkiye and Egypt for its security forces and the fight against Al-Shabaab. This is a major departure unfolding, given Somalia’s reliance on Ethiopian forces for so long,” said a geopolitical analyst based in Addis Ababa, who spoke to The Reporter anonymously.

“Turkiye and Egypt are now committing themselves militarily to protect Hassan Sheikh’s government, in return for securing their strategic interests, which include undermining Ethiopia’s contribution to Somalia’s security and stability. Their move also undermines Ethiopia’s serious concerns about resurgence from Al-Shabaab. Ethiopia should keep a close eye on the dynamics in Somalia and stay alert, because Somalia’s internal conflicts could come closer to the Ethiopian border at some point,” cautions the analyst.

Meanwhile, on the other side of Ethiopia, the war in Sudan has already edged towards the Ethiopian border along the Benishangul-Gumuz Regional State, which hosts the Grand Ethiopian Renaissance Dam (GERD).

Several parts of Sudan’s Blue Nile State, including Al-Kurmuk, Geissan, and Ed Damazin are seeing intense fighting as the Rapid Support Forces (RSF) launch offensives against the Sudanese Armed Forces (SAF) in a bid to regain a foothold in the region.

Over the past week, RSF and its ally the Sudan People’s Liberation Movement-North (SPLM-N), declared they have regained control of these areas, which are often seen as strategic for the illicit trade flows linking Ethiopia and Sudan, particularly in Kurmuk.

The Sudanese portion of Kurmuk is also considered a vital security chokepoint given its proximity to the Roseieres Dam—Sudan’s second-largest hydroelectric dam. Observers note that control over this area has the potential to tilt the tide of war, which has been raging now for three years, displacing more than 12 million people.

Analysts foresee that battles along the Sudan-Ethiopia border will continue, cautioning about impacts on Ethiopia.

This week also saw the Ethiopian Institute of Foreign Affairs (IFA), a think-tank under the Ministry of Foreign Affairs, publish a lengthy paper on the role played by the Muslim Brotherhood (MBH) in regional conflicts.

The Muslim Brotherhood is a transnational Sunni Islamist movement, maintaining presence in over 70 countries worldwide, since its establishment in 1928. The organization, which is largely viewed as a global Islamist network seeking a Sharia-governed order challenging democratic institutions and liberal norms, is thought to be embedded in the military, state, charity, and social structures of many countries.

In ‘The Evolving Influence of Muslim Brotherhood-Affiliated Networks at the Southern Red Sea’s ‘Triple Gate’: Sudan, Yemen, Somalia,’ IFA senior researcher Gashaw Ayferam (PhD) contends MBH has a strong presence in Sudan and Somalia.

The paper posits that while Egypt has proscribed the brotherhood in a bid to maintain relations with the US, Cairo is actively supporting MBH in Sudan and Somalia. It notes that Abdel Fattah Al-Burhan and the SAF, which enjoy military backing from Egypt, maintain strong links to the brotherhood.

Recent reports indicate that MBH is moving from a hierarchical structure to a fragmented network of branches and affiliated civil institutions, particularly following declining support in the Middle East. They also suggest that despite overall global decline, the brotherhood is gaining influence in regions outside of its traditional Arab heartland, including Africa, Asia, and the west, primarily through social media and civil organizations.

The IFA paper notes that instability in the southern Red Sea, notably in Sudan, Yemen, and Somalia, has created space for recovery and consolidation. It argues that MBH has sought to occupy emerging power vacuums by embedding itself within political and military structures, while simultaneously receiving political and logistical support from Qatar, Turkey, and Iran.

Speaking to The Reporter in December 2025, Dr. Alaaeldin Awad Nogoud, official spokesperson for the Tasis government led by the RSF, claimed the Muslim Brotherhood is largely to blame for the continued conflict in Sudan.

“The reason Sudan’s conflict could not be stopped is because Egypt and SAF do not want to stop the war. Egypt continues to fuel chaos in Sudan by backing SAF until it establishes a Muslim Brotherhood regime. The reason is that only such a government can maintain Egypt’s strong interests over the Nile. Eritrea and Somalia are among those who have forged an alliance with SAF. This alliance also seeks to encircle Ethiopia. Egypt has SAF in place to protect its interests in Ethiopia, but should SAF fail, Egypt has prepared Somalia as a second option for influencing Ethiopia. So, Egypt has forced both north and south of Ethiopia,” said Nogoud.

He also stated that MBH maintains relations with extremist forces like Al-Shabaab, Al-Qaeda, and IS, among others.

Analysts like Costantinos Berhutesfa (PhD), former AU anti-graft commissioner, urge the Ethiopian government to remain vigilant amid the volatility in the region.

“We [Ethiopia] need to have good relations with our neighboring countries. Somalia in particular is a big factor in Ethiopia’s national interest. Hassan Sheikh Mohamud has mobilized the whole world against us because of the MoU [with Somaliland]. We must treat our neighbors with good caution,” he said.

Costantinos observes Egypt’s continued meddling in the Horn stems partly from domestic trouble.

“Egypt is encircling Ethiopia even though Egypt itself is in crisis. Egypt’s long-term strategy in the Gulf and Horn is now in serious doubt owing to the Middle East crisis. The situation in Iran, Israel, and Gaza have placed Egypt in a precarious position. Now, all extremist groups in the Gulf and Horn are rising up against American allies in the region,” he said. “Now, Egypt is acting frantically by supporting SAF, the Somali government, and Eritrea in a bid to influence Ethiopia from every direction. Cairo has said it will use every means to influence Ethiopia to gain an agreement over GERD.”

Another security analyst, however, cautions that danger for Ethiopia lies not only in encirclement but also in the potential infiltration of domestic politics.

“Egypt is creating an asymmetric war on Ethiopia, from two directions. They support Al-Burhan, and Hassan Sheikh. Internally in Ethiopia, Egypt reportedly supports armed groups. The Ethiopian government also accuses Egypt and Eritrea of supporting Fano, TPLF, and OLA. These allegations need concrete evidence, but when we observe these groups constantly receiving arms and enlisting new troops, we have to question where they’re getting the support from,” said the analyst, speaking anonymously.

“All of this indicates that Egypt is trying to get closer to Ethiopia via Somalia and Sudan. This is also subverting Ethiopia’s sea access interests. Egypt has no history of successful ground war campaigns, therefore it is relying heavily on proxy forces in Ethiopia’s neighboring countries.”

Still, other recent developments suggest there could still be room for peaceful solutions. Djibouti in particular is well positioned to facilitate re-engagement and ease tensions between Addis Ababa, Mogadishu, Khartoum, and others.

On March 12, 2026, PM Abiy Ahmed (PhD) and President Hassan Sheikh joined Djiboutian President Guelleh for an Iftar dinner that also featured several senior officials from all three countries.

Statements issued afterward suggested that discussions focused on the overall situation in the Horn of Africa, including peace and security, economic cooperation and the strengthening of regional integration.

The meeting also addressed the ongoing conflict in the Middle East and its potential economic repercussions for the region, including possible impacts on trade and stability.

The Djiboutian presidency said the meeting forms part of a series of high-level engagements aimed at defining a new strategic direction and strengthening cooperation among countries of the Horn of Africa in addressing shared political, security, and economic challenges.

The current AU Chairperson, former Djiboutian foreign minister Mahmoud Ali Youssouf, might also weigh in on the divisions in the Horn with efforts aimed at peace and collaboration.

A directive under preparation could fundamentally reshape how 37 state-owned enterprises under Ethiopian Investment Holdings (EIH) operate, grow, and finance themselves. These enterprises may soon lose the ability to request capital injections from the state. Instead, they will be required to rely on internally generated resources, financing expansion through retained earnings rather than external support.

Under the proposed framework, each enterprise will be governed by a clear rule determining “how much of its annual net profit can be allocated for capital growth.” Officials argue that the reform will strengthen financial capacity and reduce bureaucratic delays. Yet beneath this technical framing lies a deeper transformation: a shift away from state-backed expansion toward self-financed commercial discipline.

At the same time, EIH is preparing a parallel directive to determine how boards of directors across its subsidiaries are appointed, an equally consequential move that reshapes governance alongside financing.

Taken together, the two reforms aim to redefine how Ethiopia’s most strategic enterprises are governed and sustained. But the discussions and internal documents surrounding these changes come as company reports and financial documents point towards a system still grappling with deep structural gaps, persistent audit weaknesses, and unresolved accountability challenges.

The push toward self-financing comes at a moment when many SOEs are already constrained by limited capital.

During parliamentary discussions held in November 2025 on the performance of enterprises under EIH, lawmakers raised a series of concerns about sectoral bottlenecks and structural inefficiencies. These constraints, as it turns out, are not incidental. Rather, they are embedded within the fiscal framework governing SOEs.

Existing rules dictate how profits are distributed; sixty percent to the government and forty percent to the Industrial Development Fund.

The legal basis for this structure is Council of Ministers Regulation No. 107/1996. Enacted over two decades ago, the regulation prioritizes the extraction and redistribution of enterprise profits over reinvestment and recapitalization. While it clearly outlines profit reporting and allocation mechanisms, it notably omits any formal provisions for addressing evolving capital needs as enterprises expand or face shifting economic conditions.

Under this 22-year-old mandate, the financial maneuverability of SOEs is strictly limited. Once legal reserves are set aside, the remaining net profit is split between the state and the Industrial Development Fund managed by the Ministry of Finance. Even this 40 percent allocation is precarious as the law dictates that the government’s dividend must be satisfied first.

Furthermore, while the Council of Ministers retains the power to modify these ratios, the default settings of the regulation prioritize immediate fiscal inflows for the state over the long-term capital health of the organizations under EIH.

This leaves enterprises with little room to retain earnings for reinvestment.

During an EIH quarterly performance review last November, members of Parliament highlighted structural and financial constraints, and put the spotlight on unrequited tension between financial expectations and operational realities.

A senior EIH executive explained, “we would like to provide capital support to all… but resources are limited,” underscoring the fiscal constraints within which Ethiopian Investment Holdings operates. Instead, support is selectively deployed, with authorities noting that firms that “face existential risk” without support are prioritized.

This approach, while pragmatic, has raised concerns about whether stronger enterprises are being constrained while weaker ones are sustained out of necessity rather than strategic value.

Parliamentarians also questioned whether the current structure is producing balanced outcomes across the EIH portfolio.

While headline figures suggest strong performance,  MP Zewdu Tadesse (PhD) cautioned that “this achievement appears to have been driven by the high performance of a few SOEs,” pointing to uneven capacity and export output across subsidiaries. He put forth his concern regarding a structural imbalance where a small number of high-performing SOEs are effectively carrying the broader system, while many others struggle to meet even baseline expectations.

“In the first quarter of the 2018 fiscal year, EIH foreign currency earnings were planned at USD 3.9 billion, and USD 3.64 billion was achieved. However, on the other hand, this achievement appears to have been driven by the high performance of a few institutions. In this regard, what is being done to resolve the bottlenecks preventing most enterprises from generating foreign currency as planned?” asked Zewdu.

Addressing concerns about uneven export performance, Asma Redi, chief portfolio officer at EIH, acknowledged that foreign currency earnings remain concentrated within a small subset of enterprises.

According to her, while the overall figures may appear robust, the reliance on a few high performers highlights a systemic vulnerability and to mitigate this, EIH has shifted its focus toward diversifying the export base by providing “extensive support” to subsidiaries, specifically aimed at improving both market reach and product quality to meet international standards.

Asma maintains that this shift is already yielding measurable results in specific sectors.

“For instance, the National Alcohol and Liquor Factory successfully expanded its export footprint from two to four international destinations following targeted interventions. Beyond immediate gains, EIH is laying the groundwork for long-term resilience through a newly developed Export Strategy. This roadmap identifies potential enterprises within the current holdings that are not yet exporting but possess the structural capacity to enter global markets in the future, provided the current capital and quality bottlenecks are resolved,” she told MPs.

However, the transition from potential to performance remains tethered to the broader macroeconomic environment.

The classification of enterprises into performance tiers further underscored these disparities. The report presented to lawmakers categorized the enterprises under EIH into 19 high performers and three low performers, with 15 somewhere in the middle.

MPs pressed for clarity on proposals to improve the bottom 18 performers, and inquired about incentives for enterprises that meet their targets. The questions point to a gap not only in performance, but in the policy tools available to address shortcomings.

Operational under-performance in key enterprises added urgency to the discussion. MPs highlighted specific cases where revenues declined significantly, including data that indicate compared to the same period last year, the Metehara Sugar Factory saw a staggering 37 percent drop in revenue, while the Ethiopian Agricultural Businesses Corporation suffered a 21 percent dip.

Even established entities like the Ethiopian Engineering Corporation and Hilton Addis experienced declines of four percent and one percent, respectively.

“What direction has been set to help these enterprises recover and achieve their planned revenues?” asked one MP.

Asma stated that the Agricultural Businesses Corporation, which is itself embroiled in a corruption scandal involving fertilizer and several of its top executives, faced challenges stemming from conflict and policy changes.

“For the Agricultural Businesses Corporation, policy changes shifted fertilizer distribution under the Ministry of Agriculture and allowed commercial farms to purchase from unions, resulting in unsold stock,” she explained. “Additionally, foreign exchange constraints limit its ability to purchase machinery.”

She also outlined the factors behind declines in other enterprises, noting that Metehara Sugar Factory’s revenue decline was due to delays in sugarcane production, and assuring lawmakers that “corrective measures have been taken.”

Unsatisfactory audit findings have also emerged as one of the most persistent concerns surrounding SOEs. Lawmakers noted that some enterprises struggle with adverse audit reports, while others continue to claim that their audits are in progress.

Frustration with delays was explicit, with MPs asking, “how long will the repeated statement ‘audit work is in progress’ continue in annual reports?”

Financial management weaknesses were also brought into focus, particularly around receivables. The parliamentary committee overseeing public enterprises questioned why it has not been possible to collect these overdue receivables on time, highlighting ongoing inefficiencies in cash flow management.

Governance and planning deficiencies were another area of concern. MPs pointed to the absence of systematic safeguards, and asked why malpractice and misgovernance remain largely unaddressed. They also noted that the “corrective measures” often cited by SOE executives are regularly missing from reports, suggesting a disconnect between operational realities and formal accountability mechanisms.

Additional questions raised by MP Addis Alemayehu highlighted structural constraints facing enterprises. Subsidiaries have requested support to remain competitive, leading to calls for “study-based capital restructuring in line with current market conditions.” At the same time, outdated infrastructure continues to hinder performance, with concerns that many subsidiaries are facing outdated production equipment and technology.

Revenue mobilization challenges were also evident. Despite plans to collect 13.2 billion Birr in dividends, only 77 percent was achieved, prompting questions about “what is being done to meet planned dividend targets.”

In response, EIH officials acknowledged many of the challenges while emphasizing ongoing efforts to address them.

Rediet Getachew, EIH chief financial officer, noted the scale of inherited audit problems, stating that some SOEs saw delays lasting up to a decade, but argued that progress has been made through targeted interventions.

“Significant work has been done… including assigning professionals… and building their capacity,” he said, adding that most enterprises have now updated their audit reports.

On dividends, officials pointed to structural constraints, explaining that tax payments and other liabilities sometimes affect the ability to pay dividends, and highlighting efforts to improve liquidity management, and aligning investment plans and operational expenses with dividend obligations.

At the same time, officials sought to reassure lawmakers on financial management issues, claiming a steady decrease in outstanding receivables, though they acknowledged that resolution requires sustained effort, including “negotiations and legal measures where necessary.”

Despite the reform narrative, performance across Ethiopian Investment Holdings’ portfolio presents a mixed and often uneven picture.

Under the mandate of Council of Ministers Regulation No. 487/2022, EIH is tasked with ensuring “modern management practices [and] corporate governance standards” across its portfolio. However, the reality within the Ethiopian Construction Works Corporation (ECWC) suggests a significant gap between these standards and operational execution.

In a move to address these persistent issues, EIH in December 2025 overhauled the Ethiopian Construction Works Corporation board, removing high-level government ministers in favor of independent experts. At the time, EIH executives said they were aiming to ensure that “one-third of the board represents independent bodies… to enhance the institution’s corporate governance and decision-making transparency”.

This EIH intervention came after years long repeated public grievances regarding the Corporation’s performance and in the face of an attempt to transition from passive holding to active oversight in the face of mounting project failures.

According to documents obtained by The Reporter, the human and financial cost of ECWC’s “extremely weak” performance is most visible in its failed healthcare infrastructure projects.

A February 2024 report from the Addis Ababa Design and Construction Works Bureau revealed the termination of contracts for the Nifas Silk Lafto and Kolfe Keranio General Hospitals due to chronic delays.

The bureau noted that despite repeated efforts to improve momentum, the projects could not be completed on time, leading to the conclusion that “continuing the projects in the current manner would not provide a proper response to the public’s demands.”

Technical and contractual incompetence at ECWC has also led to unprecedented legal and safety disputes. The Ethiopian Roads Administration (ERA) has previously issued a stern demand for clarification following a performance audit that claimed ECWC faced penalties exceeding 39 trillion Birr for failing to meet service levels on the Adama-Awash Road project. ERA officials expressed “complete shock” at the Corporation’s public claims that the contract was “not practical” and “destructive,” asserting instead that the failure was “mostly due to [ECWC’s] own failure” to remedy recorded defects despite sufficient alerts.

Beyond financial disputes, the Ministry of Defense has also raised alarms regarding the structural integrity of ECWC’s work. In a July 2024 letter concerning the Commando and Airborne Forces Headquarters project, the Ministry reported “major cracking” in prefabricated slab elements. The Ministry warned that the “risk these cracks bring to the blocks in the future is high,” and strictly ordered that “all slabs previously installed with similar problems be removed” before further work could proceed.

Still, ECWC’s troubled past has not excluded it from new opportunities. The Corporation has been tapped as a partner in the multi-billion birr Chaka Housing Development Project in Addis Ababa, where it joins private developers under a public-private partnership to deliver more than 4,100 housing units at an estimated cost of 67 billion Birr.

Despite previous delays and safety concerns, officials justified ECWC’s inclusion citing its experience in completing residential buildings and its capacity to collaborate with private firms on large-scale developments.

It was after these inconsistent performances that in December 2025, ECWC saw its leadership and board structure overhauled by EIH, with the reshuffle marking the latest in a series of corporate reforms across government-owned firms.

The decision includes the replacement of the corporation’s Chief Executive Officer and all board members; a move that officials say follows a comprehensive review of the company’s governance and financial standing.

Whether it will make an impact on ECWC’s unsatisfactory performance remains to be seen.

At a structural level, SOEs remain central to the economy. An IMF report from June 2025 notes that on average 39 percent of public investment in Ethiopia was undertaken by SOEs, and that they account for 37 percent of the stock of public sector capital. It warns that the scale magnifies risks when performance falls short or remains inconsistent.

EIH itself has positioned performance improvement as a core mandate, emphasizing a shift in philosophy toward commercial viability.

CEO Brook Taye’s (PhD) justifications for changes in EIH’s core mandate were cited in the 2025 Sovereign Impact report authored by the Center for the Governance of Change at IE University,

“These assets need to be managed commercially. They’re not a policy instrument,” he said, describing a departure from the traditional role of SOEs as vehicles for state-led development and signaling a stronger focus on profitability, efficiency, and measurable returns.

According to the IMF document, there are clear signs of progress in selected areas of EIH, the largest sovereign wealth fund in Africa, with over USD 150 billion in assets under management and additional dividend income inflow.

It indicates that some enterprises have demonstrated strong revenue growth and operational gains. For instance, one major construction enterprise “reported 8.9 billion Birr in revenue… exceeding its annual target by 17 percent and the previous year’s figure by 81 percent.” Such results are often highlighted as evidence that reform efforts can yield tangible improvements when governance and management structures are strengthened.

However, these successes are not representative of the entire portfolio. Even in cases of rising revenue, profitability remains under pressure. Audit findings reveal that while enterprises such as Ethiopost saw income surge to 2.88 billion Birr from 1.46 billion Birr, their financial health weakened, with profit before tax declining significantly and total income falling further.

A similar pattern is observed in the Chemical Industry Corporation, suggesting that revenue growth alone is not translating into sustainable profitability.

At the sector level, performance challenges are compounded by broader structural and operational constraints. The IMF report highlights that “constraints on the availability of foreign exchange… has compounded these challenges,” affecting the ability of enterprises to deliver infrastructure projects and maintain operational efficiency.

The reports indicate that performance monitoring systems themselves remain a work in progress. While efforts are underway to improve oversight, a lack of standardization limits the ability to accurately assess performance across enterprises and reduces transparency in evaluating outcomes.

As Ethiopian Investment Holdings begin paving its way to push its portfolio toward self-financing and stronger governance, the central question becomes whether these enterprises truly thrive without the safety net of state capital.

The reforms signal a decisive shift from SOEs as instruments of policy to SOEs as commercial entities responsible for their own growth. Yet the structural constraints that have long limited their flexibility remain in place. Limited capital reserves, uneven performance across subsidiaries, and persistent audit and governance gaps mean that success is far from guaranteed.

As discussions regarding the new directives take shape, their effectiveness will likely depend on how well they align financial discipline with the practical realities facing enterprises on the ground.

The studio, illuminated by more than a hundred spotlights, was packed with crew, political candidates, and ordinary German citizens seeking to better inform themselves before casting their ballots.

During the event, citizens highlight the challenges they face, like deteriorating health provisions or the need for more subsidies in the education system, and party leaders and candidates are expected to respond to the concerns on the spot.

Like Ethiopia, Germany is a federal republic and has been since 1948. The country is divided into 16 states, each of which is represented in the federal parliament (Bundestag) where party candidates are elected directly by the people, and a federal council (Bundesrat) consisting of members appointed by state governments. Certain laws and all constitutional changes need the consent of both houses, but the Bundestag acts as the primary legislative body.

These bodies are more or less equivalent to Ethiopia’s House of Peoples’ Representatives and House of Federation.

The states also have their own regional councils, five of which are scheduled to undergo elections this year. Among them is Rhineland-Palatinate, the southwestern state famous for its wine where SWR organized the debate last week.

When residents of Rhineland go to the polls on March 22, they will choose their representatives from any of the 12 political parties contesting in the state. Among them are the center-left Social Democratic Party (SPD), the center-right Christian Democratic Union (CDU), the Green Party, and the Alternative for Germany (AfD).

CDU, led by German Chancellor Friedrich Merz, won the vote last time out but faces an uphill battle in this year’s crucial state elections.

“It is the states who came together and formed Germany. Hence, their say is crucial in each step of the legislative process as well as the federal government’s decisions. Each process involves rigorous steps. Usually, when disagreements occur between the two houses over a certain piece of legislation, they sit for mediation,” explained a German scholar.

“Germany’s federalism was created to contain the potential rise of a dictator like Hitler. The structure, in which member states are empowered and every process of government decision is counter-checked by the states and federal government, is designed to prohibit a government where leaders could become dominant and dictatorial. This system was designed after the Second World War.”

Under the federal system, states receive half of federal income tax and value added tax (VAT), among others, while they are wholly in charge of their own universities, police, media and education systems, and other key institutions.

Any disputes between states and the federal government are addressed via the Bundesrat, and German states have treaties amongst themselves, not only with the federal government. Overall, the system grants extensive freedoms and rights to states, leaving them free to manage their own affairs while the federal government takes charge of national issues and participates in the European Union (EU).

The arrangement is praised by many as the key to Germany’s economic and political success.

“It enabled Germany to remain stable while many European countries were facing internal instability,” said another German scholar. “Germany is the strongest economy in Europe, and this system is also suitable for citizens. Any German citizen can go to any part of Germany and enjoy the same provisions. This is because the states implement consistent policies.”

Lessons for Ethiopia?

Ethiopia, a federal structure housing twelve regional states and two chartered cities, is itself preparing for the seventh national election scheduled for June 2026.

Despite concerns from opposition parties about security and freedom of movement, officials of the National Election Board of Ethiopia (NEBE) are plowing ahead. Nearly 2,200 parliamentary candidates and over 8,700 regional candidates have registered, while election officials said last week that more than nine million voters had completed registration.

The election is shaping up to be as large or even larger than the 2021 vote, but questions about transparency linger. Here, a lesson could be drawn from Germany, where the election process is led by data and information sourced solely from the German Statistical Office, an independent public institution.

Looking past the election process, the German government offers lessons in autonomy. In Ethiopia, the central government exercises far more power than its regional counterparts, leaving them partially or wholly dependent on it in terms of political decisions, as well as financially.

Unlike in Germany, states in Ethiopia cannot also conduct elections independently from the federal government. For instance, following Tigray region’s effort to conduct elections separately, a deadly conflict erupted between federal and Tigray forces in 2020, lasting two years.

Besides the many features that help keep power in check in Germany’s federal structure and its public institutions, there are also human elements to governance in Europe’s largest economy. For instance, at the Bundesrat, a room inside the council facility in Berlin is reserved for prayer and meditation by its members.

Germany’s Helping Hand

Germany has a strong presence in Ethiopia, where it backs  several initiatives and projects, mainly in peace and security, humanitarian and development endeavors.

“We are supporting the Ethiopian government in terms of the peace process, among other things. We also support administrative procedure law and judicial law reforms at the Ethiopian Ministry of Justice. We are supporting transitional justice and national dialogue initiatives in Ethiopia. We are supporting Ethiopia’s economic reform that is also supported by the IMF. We are implementing various projects across several sectors in Ethiopia through GIZ. We are supporting the TVET program in Ethiopia through the Ministry of Labor and Skills. We are adopting the German dual policy system regarding TVET, which is learning and practicing skills at the same time. We are also supporting refugee programs, humanitarian works, stabilization and peace building programs. We support the implementation of the Pretoria agreement,” officials from the German Ministry of Foreign Affairs told Ethiopian journalists who attended a conference in the country last week.

Among the issues they touched on was what they described as a “concerning” shrinking of the civic and media spaces in Ethiopia.

This is one area where there are stark differences, yet also similarities, between Ethiopia and Germany.

“We don’t interfere in media freedom, but that freedom being used by foreign powers against Germany’s national interest. When German media report serious issues about the German government, foreign media and powers exploit such reports. Especially since the Ukraine-Russia war, foreign interference in the media, the targeting of politicians, polarization of public opinion, and patterns of information manipulation have surged,” said the German officials. 

In Ethiopia, as the nation prepares to head to the polls, the government has ramped up a crackdown on the press,

Over the past few months alone, the Ethiopian Media Authority has revoked the licenses of Wazema and Addis Standard, and refused to renew accreditation for correspondents working for the German Deutsche Welle.

“We are concerned about the shrinking civic and media spaces in Ethiopia,” said the officials.

In attempting to address the wide vacuum between press freedom and access to information in Ethiopia, Germany’s Federal Press Conference (Bundespresseconferenz) could be an exemplary solution. Established by the association of journalists, the Federal Press Conference has its own press briefing facility financed by member journalists. Government officials are invited and offer one or two process briefing sessions at the facility each week. The Chancellor comes once or twice a year, and every journalist enjoys the access to ask questions through this platform.

On another note, German officials also expressed alarm over Ethiopia’s growing interest in securing maritime access, as well as the potential repercussions for the Horn.

Two months ago, German Foreign Minister Johann Wadephul visited Addis Ababa.  He met with PM Abiy Ahmed and Foreign Minister Gedion Timothewos to discuss peacebuilding, economic cooperation, investment opportunities, and regional stability in the Red Sea.

“We told Ethiopian government officials that restraint is very crucial to prevent any regional war in the Horn. If Ethiopia and Eritrea agree on a peaceful deal on Assab, that is very welcome. If Ethiopia moves militarily, that is a problem for Germany. Security issues in Ethiopia are a major problem for German businesses. Therefore, we indicated to the Ethiopian government that a peaceful approach is very essential,” said the officials.

Regarding the relevance of the Algiers Agreement that ended the Ethio-Eritrea war more than two decades ago, the officials say they “have no update whether it is still binding.”

As the Israeli-US military operation in Iran enters its third week, the effects of the latest conflict in the Middle East are already rippling across the globe, including in Ethiopia.

The war, which as of yet has shown no signs of settling down, brings with it massive economic implications for the world, and the prospect of geopolitical and diplomatic reconfigurations in the Horn of Africa, where the Gulf powers now ensnared in the conflict have become more deeply entrenched over the past decade.

Since Israel and the US launched surprise strikes on Iran on February 28, 2026, killing Supreme Leader Ali Khamenei in the process, crude oil prices have climbed to levels not seen since the days of COVID-19. On Monday, a barrel of crude was trading for nearly USD 115, up from USD 65 two weeks ago.

Prices have since fallen below the USD 100 mark, but analysts expect them to shoot back up as oil tankers and freight ships remain stranded in the Persian Gulf following Iran’s threats to open fire on vessels attempting to cross the Strait of Hormuz, a chokepoint for roughly 20 percent of the global oil trade.

Ethiopia, a landlocked country whose economy relies heavily on fuel imported from the Gulf and where fuel shortages were already a growing concern, is taking steps in hopes of buffering the economic effects of the war.

Earlier this week, the federal government revised fuel retail prices for the first time since December 2025, pushing up retail prices for benzene and diesel by three and 10 Birr, respectively. The update also included new rules for large-scale consumers such as manufacturers and mining projects, who will now pay 185 Birr for a liter of diesel.

Meanwhile, Finance Minister Ahmed Shide urged the nation to conserve fuel, revealing that the government is pursuing emergency fuel procurement through “alternative routes” and stating that additional measures aimed at curbing fuel consumption are in the pipeline.

“We want to remind all fuel users that they must use fuel with high conservation,” he said during a briefing on Wednesday.

Fuel remains Ethiopia’s largest import expenditure, accounting for a quarter of its total import bill at an estimated USD 4.2 billion a year.

Ethiopia imports nearly all of its refined petroleum products, with a substantial share sourced from Gulf suppliers, according to the International Energy Agency. These shipments typically travel via maritime routes connecting Gulf export terminals to the Port of Djibouti—Ethiopia’s principal maritime gateway.

Coupled with Ethiopia’s dependence, any disruption to global oil flows triggered by a closure of Hormuz would translate into immediate economic pressures, including higher forex expenditures on fuel imports. Analysts observe the conflict has already pushed shipping insurance costs through the roof, meaning that even if shipments continued through alternative routes, higher insurance and freight costs would ultimately be passed on to energy-importing economies such as Ethiopia.

Although the details of its procurement contracts are closely guarded, the state-owned Ethiopian Petroleum Supply Enterprise (EPSE) is the country’s sole fuel importer.

The firm generated close to 460 billion Birr in revenue last year, while claiming more than 40 billion Birr from the federal fuel price stabilization fund to offset mounting costs. This week, the Finance Minister stated that without government subsidies, consumers would pay well over 200 Birr a liter at pumping stations.

The government’s response to the unfolding global oil crisis has been quick, reflecting the outsized effects that previous worldwide fuel supply disruptions have had on Ethiopia.

The oil crisis of 1973, arising from an oil embargo on Israel and its allies in the wake of the Yom Kippur War, triggered protests and unrest in Addis Ababa which eventually culminated in the fall of the imperial regime and the rise of Marxism and the Derg.

Analysts say that while the ongoing crisis is not quite on the same level as the one from half a century ago, which saw prices quadruple, the situation could grow worse if the conflict is not settled quickly or if Hormuz does not reopen in the near future.

And while the conflict’s effects on global energy supply cannot be ignored, the war in Iran could also carry huge geopolitical implications for the Horn of Africa and Ethiopia.

A report from the Critical Threats Project, backed by the Washington-based think tank, American Enterprise Institute, outlines the potential implications and describes the intricacies of the complex relationships between the Horn and Gulf.

Published on March 3, the report pinpoints the threat of retaliation from Iran-backed Houthis in Yemen as the crucial factor that could determine how events unfold in the Horn and along the Red Sea.

“The Iran war will likely have short-term effects on disputes in the Horn of Africa that are linked to Red Sea competition among Middle East actors, such as the Sudanese civil war and potential conflict in northern Ethiopia, although it is unclear whether the war will accelerate or dampen conflict in the short term,” it reads.

The report’s authors note that Iran has launched strikes against all six Gulf Cooperation Council (GCC) countries in response to the US-Israeli attack, while Iran-friendly groups such as Hezbollah in Lebanon and Tehran-backed groups in Iraq have launched attacks on Israel and US military bases across the region.

However, the Houthis, who conducted several major drone and missile attacks on Israel and in the Red Sea last year, have yet to act.

“The Houthis have not yet conducted any retaliatory attacks and only confirmed their solidarity with Iran, despite the Houthi spokesperson telling key Iranian officials in February that they would participate in any conflict targeting Iran,” reads the report.

It warns that if and when the Houthis decide to join the war, they would likely target Israel and the UAE, as well as US military bases in places like Djibouti.

“Analysts have noted that the Houthis still maintain back channels to Saudi Arabia to manage escalation, whereas the UAE is viewed as closer to Israel and the United States and directly enabling the Israeli-US strikes on Iran,” it reads.

The report posits the Houthis could also strike Israeli and UAE positions in Somaliland.

Just a few months ago, Israel became the first country to recognize Somaliland as a sovereign nation, while the UAE has long had a presence in the breakaway territory, particularly in the coastal city of Berbera, where it operates a modern military port.

Some reports indicate the UAE facilitated Israel’s recognition of Somaliland in December, and highlight that Israeli and Somaliland officials have allegedly been in discussions about the prospect of an Israeli military base in the region over the past several weeks. Others claim that Israel has already established a military presence in Somaliland.

To the west, the war in Iran could have repercussions for the war in Sudan, which has been raging for nearly three years between the Sudanese Armed Forces (SAF) and the UAE-backed Rapid Support Forces (RSF).

“The UAE has flown hundreds of weapon shipments to countries surrounding Sudan to supply the RSF since the beginning of the Sudanese civil war in 2023, while Saudi Arabia was reportedly brokering a $1.5 billion arms deal in early 2026 between the SAF and Pakistan, which is also now preoccupied with a conflict with Afghanistan,” reads the Critical Threats Project report.

It indicates it is too early to say how the conflict will play out in the Horn, with its authors arguing things could go either way.

“Iranian attacks, any Gulf military response, and overall Emirati and Saudi rapprochement could help de-escalate several local conflicts in the Horn of Africa. The Iran war could reduce Saudi Arabia’s and the UAE’s capacity or willingness to continue fueling their proxy competition in the Red Sea and Horn of Africa,” it reads.

On the other hand, the report warns the war in Iran could create the conditions for an even more unstable Horn.

“The war does not change the local and regional drivers of competition among Saudi Arabia, the UAE, and their partners in the Red Sea, however, and could further escalate conflict by giving the rival coalitions greater freedom to act,” it reads.

All this and more will have been on the agenda when Prime Minister Abiy Ahmed (PhD) held discussions in Djibouti on Thursday morning with President Ismail Omar Guelleh and Somali President Hassan Sheikh Mohamud.

That afternoon, the PM arrived in Abu Dhabi, where he was received by Abdullah Sultan bin Awad Al Nuaimi, minister of Justice, and Mohamed Abdullah Al Jneibi, chair of the Presidential Protocol and Strategic Narrative Authority.

Analysts expect the visit to address the increasingly entwined geopolitics of the region and questions about Ethiopia’s fuel supply.

At the Second Climate Finance Summit held on March 5, 2026, at the Sheraton Addis, experts presented a draft version of the Ethiopia Landscape of Climate Finance study prepared by the Climate Policy Initiative (CPI).

Though still pending finalization, the report offers one of the most detailed assessments yet of how climate finance flows into Ethiopia, where it is concentrated, and where critical gaps persist in financing the country’s green transition.

The summit brought together government officials, development partners, financial institutions, and sector experts. Negusu Aklilu (PhD), Chief Executive Officer of the COP32 Presidency Secretariat Office established under President-designate Gedion Timothewos (PhD), briefed participants on preparations for hosting the global climate gathering.

According to Negusu, the organizational structure for COP32 includes four task forces overseen by a national steering committee chaired by Prime Minister Abiy Ahmed (PhD), supported by 13 subcommittees.

Senior government officials lead the different tracks of the preparation.

Fitsum Assefa (PhD), minister of Planning and Development, heads the content and policy track, while Redwan Hussien, director of the National Intelligence and Security Service, oversees media and communications.

Alemtsehay Paulos, minister of Cabinet Affairs at the Prime Minister’s Office, leads logistics, infrastructure, and operations, and Ahmed Shide, minister of Finance, is responsible for resource mobilization and partner engagement.

Negusu noted that 23 federal, city, and state institutions are involved in organizing the event.

“The COP is like having a country in a city,” he said, describing the scale and complexity of hosting the conference.

Each task force has submitted a 100-day action plan, with the first quarter of implementation expected to conclude this month. Preparations must meet the standards of the United Nations Framework Convention on Climate Change (UNFCCC), he added, noting that teams are working around the clock to ensure compliance.

The secretariat is also preparing to receive a UNFCCC fact-finding mission in early July. Such missions involve technical and logistical assessments conducted by the UN climate body in potential host countries to evaluate readiness for staging the annual Conference of the Parties.

Negusu also outlined developments in communications planning. A draft communications strategy has already been prepared and validated and has been presented to the COP32 presidency. The document is expected to be made public in the coming months.

A consortium of local public relations firms is currently working with the Media and Communications task force, while international PR firms may also be engaged due to the political sensitivities surrounding the event. Ethiopia also plans to consult previous COP host countries to learn from their experiences.

“This is a great opportunity in building legacy,” Negusu said.

Beyond the logistics of hosting the summit, discussions at the event focused heavily on the financial realities of Ethiopia’s climate ambitions.

Dawit Woubeshet, a senior environmental economist at the World Bank, believes the country has made notable progress in translating climate strategies into institutional frameworks.

Ethiopia is currently transitioning to its third Nationally Determined Contribution (NDC 3.0), covering the period from 2025 to 2035. The roadmap includes a dedicated investment framework and sets a target of reducing greenhouse gas emissions by more than 70 percent by 2035.

Yet turning policy ambition into actual investment remains a major challenge. During a fireside discussion on moving from strategy to financing, Misganaw Eyasu, senior climate finance advisor at the Ministry of Planning and Development, highlighted the scale of the financing gap.

Ethiopia received only about USD 82 billion in climate finance between 2011 and 2019, which is just 1.3 percent of what is required to meet its climate goals. The Ministry has since introduced a National Carbon Market Strategy covering 2025–2035 and is currently drafting a proclamation to operationalize the system.

However, Misganaw noted that the absence of a national carbon registration platform and other technical limitations continue to hinder progress.

Speaking to The Reporter, Misganaw explained that most of the climate financing Ethiopia secured during that period came from domestic sources. He pointed to limited technical capacity within local banks to prepare proposals and negotiate climate financing agreements with international partners.

“A lack of interest from foreign financiers has also contributed to the gap,” he said, stressing the need for financial institutions to strengthen technical expertise and negotiation capacity while engaging qualified professionals in the sector.

Despite these challenges, Misganaw believes hosting COP32 could create new opportunities. Reflecting on the success of the Second African Climate Summit held in Addis Ababa in September 2025, he expressed confidence that Ethiopia can once again demonstrate its capacity to convene global leaders while attracting new climate investments.

“This would bring an opportunity to address the challenges and invite investments to the country,” he said.

Panel discussions throughout the summit further highlighted the structural issues affecting climate finance. Participants noted that the lack of a universally agreed definition of “climate finance” remains a persistent challenge in aligning policy frameworks and funding mechanisms.

Several speakers also emphasized that the sector needs tangible financial transactions rather than repeated dialogue.

Hikmet Abdella, CEO of FSD Ethiopia, echoed that sentiment.

“What we need is transactions, and not more meetings,” she told The Reporter.

Hikmet noted the absence of a nationally coordinated action plan dedicated specifically to climate finance. FSD Ethiopia is currently working to facilitate collaboration among key institutions, including the National Bank of Ethiopia, the Ministry of Planning and Development, and the Ministry of Finance, to establish a more coherent framework. She disclosed that the organization has received a request to help develop a green bond sukuk and plans to explore sustainability-linked financial instruments.

Capital market institutions are also beginning to position themselves within the emerging climate finance ecosystem.

In a panel discussion featuring Hana Tehelku, director-general of the Ethiopian Capital Market Authority, and Yodit Kassa, chief operating officer of the Ethiopian Securities Exchange (ESX), the conversation centered on how financial markets could support climate investment.

Hana said the authority is considering policy incentives such as tax incentives and credit enhancements to encourage private sector participation. Yodit added that ESX is preparing voluntary guidelines to promote sustainability-linked financial products. Both speakers emphasized that unlocking private capital will require strong regulatory frameworks and government leadership to build investor confidence.

The summit’s central focus, however, remained the findings of the draft CPI study presented by Matthew Hurworth.

The analysis examines climate finance commitments from public and private, domestic and international sources, categorizing them into mitigation efforts aimed at reducing greenhouse gas emissions, adaptation initiatives that build resilience to climate impacts, and projects that deliver both benefits.

The study reveals that climate finance flows to Ethiopia have remained largely stagnant between 2020 and 2023 despite growing climate risks. To meet the country’s climate investment requirements, current funding levels would need to increase more than fourfold.

Climate finance in Ethiopia is heavily dominated by international public funding, while private sector participation remains limited. Public actors committed about USD 2.2 billion annually in 2022–2023, representing a 23 percent increase compared to the previous period.

Most of this funding came in the form of grants (80 percent) and concessional debt (14 percent). Multilateral development finance institutions accounted for the largest share, followed by donor governments. Ethiopia’s domestic budget allocated roughly USD 274 million—about 12 percent of total public climate finance—to climate-related projects.

Adaptation activities receive the largest share of funding, accounting for about 60 percent of total climate finance, or roughly USD 1.4 billion. Yet even this level of investment covers only about a quarter of the country’s annual adaptation needs outlined in NDC 3.0.

Much of the funding is directed toward agriculture, forestry, and land use sectors, reflecting their importance to Ethiopia’s economy and their vulnerability to drought, rainfall variability, and land degradation.

Mitigation finance, meanwhile, remains significantly underfunded, according to the study.

Current investment stands at around USD 0.5 billion, less than 10 percent of the estimated USD 6.6 billion required annually. Most mitigation funding is directed toward the energy sector, particularly hydropower, though the study identifies growing opportunities for solar and wind expansion, especially through mini-grids and decentralized energy systems.

However, participants of the summit also cautioned that the findings should be interpreted within certain methodological limitations. The study measures total climate finance including committed climate finance rather than funds actually disbursed, meaning some pledged resources may not yet have reached projects on the ground. In addition, the analysis relies on financial data from roughly two years prior, which may not fully reflect the current financing environment. Recent shifts in the global development landscape, including the withdrawal or scaling back of funding from major donors such as USAID, may have significantly altered the amount stated in the study.

As Ethiopia prepares to welcome the world for COP32 in 2027, the country finds itself at a pivotal moment. Hosting the conference could elevate its global climate leadership while also serving as a catalyst to close its climate finance gap. If leveraged effectively, the event may not only showcase Ethiopia’s policy ambitions but also attract the partnerships, capital, and technical expertise needed to translate those ambitions into measurable climate action.