Portion of the finance needed for rehabilitation of 250,000 ex-combatants
A minimum of USD20 billion is required over the next five years to rebuild the northern part of Ethiopia that has been devastated by war in the last two years, said Ahmed Shide, Minister of Finance. It is almost equal to a fifth of the country’s GDP.
As part of an effort to mobilize the required funds, the Ethiopian government strongly urged its international partners to contribute financial assistance.
Ahmed, in his discussion with Antony Blinken, the US Secretary of State, indicated the figure is a ‘conservative estimation’. Unofficial estimates place the figure at USD28 billion. Over 23 million people are in in need of humanitarian assistance as a result of the war and drought in Ethiopia.
“We have begun implementing immediate recovery interventions primarily using our own resources and by support of the World Bank. But we cannot do this alone as the financing need for the post-conflict reconstruction is substantial,” said Ahmed.
The conflict severely ravaged Tigray regional state, as well as Amhara and Afar regional states, before it was brought to an end after the cessation of hostility agreement was signed in Pretoria in November 2022. Among the most critical needs in the region are immediate humanitarian assistance, the reconstruction of health centers, education, infrastructure, and the restoration of essential services.
Furthermore, rehabilitation and reintegration of ex-combatants will necessitate significant financial investment. According to Ahmed, this duty must also be completed promptly in order for the peace pact to be successful.
The government has formed the National Rehabilitation Commission to reintegrate ex-Tigray Defense Force combatants (TDF). Last week, officials from the federal government and UNDP arrived to Mekele, led by Teshome Toga (Amb. ), the commissioner, to begin the rehabilitation program for disarmed Tigrayan combatants.
The commission’s rehabilitation program will include nearly 250,000 ex-combatants, according to Ahmed.
“I want to stress the criticality of timely reintegration of ex-combatants, which in turn we contribute to the peace consolidation,” Ahmed told Blinken.
The ministries of finance and planning and development have been meeting with donors to determine how to mobilize the funding needed for rehabilitation. Unfortunately, no significant pledges have been made thus far. On his arrival in Addis Ababa on March 14, Secretary Blinken announced a new assistance package at USD331 million. This brings the US investment to Ethiopia to USD3 billion since 2020. Blinken also committed to provide additional support for approximately 13 million people in need of urgent humanitarian aid owing to the ongoing drought.
After two years of chilly diplomatic relations, Blinken’s visit is widely regarded as a step forward for the two countries’ diplomatic re-engagement. Yet, before completely re-engaging with Addis Ababa, the US wanted accountability for war atrocities. The extent of accountability to transitional justice and accountability will also decide the reinstatement of AGOA.
In return, Ahmed offered Ethiopian government is undertaking bold economic reforms.
“Despite the headwinds of historic proportions, we preserve it with implementation of our key reforms, including financial market revitalization, telecom sector revitalization, subsidy for enhancing agricultural productivity, and debt management. We know that much more needs to be done, and we are ready to take bold actions on the most transformative reforms,” said Ahmed.
