By Abrar Fitwi
Some people have a talent for making a bad situation worse. I think #AbiyAhmedAli must be one of them. Ethiopia's removal from AGOA benefits (if implemented) will definitely accelerate the country's journey to a multifaceted crisis.
I see some Ethiopians crying about this. But there are two things these Ethiopians should know about AGOA duty-free access:
1. AGOA is a privilage (and not a right) aimed at promoting economic development and reforms in sub-saharan countries. The president of the US may not grant this special incentive if he determines the country was not delivering the anticipated reform.
2. AGOA has human rights requirements set out in the legistlation that should be met for eligiblibility. A country should not engage in gross violations of human rights. Ethiopia's suspension should not be considered a sanction. It is rather lack of compliance.
The war on Tigray has incurred a huge economic cost resulting in internal and external debt loads, soaring inflation and acute shortage of foreign currency. The cost of basic consumer goods has increased rapidly causing the annual food inflation to accelerate to about 37%. Losing foreign currency at this time will exacerbate the dire economic situation.
Ethiopia was one of the world's fast growing countries when Abiy came to power. Today (in 2021) Ethiopia is excluded from IMF's GDP growth forecast in its World Economic Outlook for the next four years.This category is normally reserved for failed states. The only other countries included in this category are Afghanistan, Libya, and Syria.
It appears there is one way for Ethiopia to continue enjoy AGOA benefits - TDF capturing the capital within the year.
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