Under siege

24 November 2020 By Ed Cropley Follow @edwardcropley

Civil conflict is sending the once fast-growing African nation into reverse. Lenders and donors may withdraw, deepening a dollar crunch from reduced investment and exports. High debt and reliance on foreign capital leave PM Abiy Ahmed ill-placed for a prolonged crisis.

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Ethiopian federal troops encircled the capital of its northern Tigray region, the government said on Nov. 23, pressing home a nearly three-week long offensive against the mountainous area’s ruling Tigray People’s Liberation Front (TPLF).

Prime Minister Abiy Ahmed has told the TPLF to lay down their arms by Nov. 25, or face a final assault on Mekelle, a city of 500,000 people.

TPLF leader Debretsion Gebremichael denied Mekelle was surrounded and told Reuters Abiy’s ultimatum was cover for government forces to regroup. Reuters could not verify the government or TPLF statements.

The yield on Ethiopia’s 2024 Eurobond was flat on Nov. 23 at 8.4%. It has risen more than 200 basis points since Nov. 3, the day before Abiy launched a central government offensive against the TPLF.

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Prime Minister Abiy Ahmed has told the TPLF to lay down their arms by Nov. 25, or face a final assault on Mekelle, a city of 500,000 people.

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