This is an opinion column. The views expressed are those of the author and do not represent the editorial position of The Abay Times.
On March 17, the Ethiopian government issued an emergency fuel utilization directive. On March 26, the 4th Invest in Ethiopia Forum opened in Addis Ababa to showcase the country’s economic transformation. These two events happened nine days apart. They have not been discussed in the same room.
They should be. The directive exists because oil breached $100 per barrel after Iran’s Revolutionary Guard effectively closed the Strait of Hormuz — the corridor through which the vast majority of Ethiopian fuel imports transit. The forum exists because Ethiopia’s reform numbers are genuinely impressive: inflation at 9.7%, special economic zone reforms attracting domestic capital, Italy committing to the Koysha Hydropower Dam and Bishoftu Airport, a $48.8 million smart meter rollout. These are real achievements produced by real policy discipline under an IMF programme that has imposed real costs. I do not dispute them.
But a country that issues an emergency fuel rationing directive and an investment forum invitation in the same month has a problem that no panel discussion on SEZ incentives can solve. Ethiopia imports over $4 billion in fuel annually. It imports 100 percent of its transport fuel. The vast majority arrives through supply chains that currently run through an active war zone. The Philippines declared a national energy emergency on March 24, the first country in the world to do so in response to the Hormuz crisis, according to CNN and the Philippine presidential office. QatarEnergy declared force majeure on long-term LNG contracts with Italy, Belgium, South Korea, and China after Iranian strikes knocked out 17 percent of Qatar’s export capacity, according to Al Jazeera and Reuters. And Ethiopia — landlocked, entirely dependent, with no strategic petroleum reserve — rationed fuel and reversed the IMF-mandated subsidy cuts that the Fourth Review specifically identified as a programme benchmark.
That reversal is the crack in the foundation. Not because the government was wrong to reimpose subsidies when unsubsidised diesel would have hit 238 birr per litre — that was political survival, and no government in the world would have chosen differently. The crack is that this was foreseeable, foreseen, and unaddressed. The IMF programme spent eighteen months engineering subsidy removal as fiscal reform. It did not spend a single paragraph engineering the reduction of the dependency that makes subsidies politically inescapable every time a Gulf crisis erupts. The programme fixed the distortion. It ignored the structural condition that produces the distortion. And now the distortion is back, the fiscal trajectory is compromised, and the architects are left explaining why their reform can be undone by a naval engagement Ethiopia had no part in.
Follow the logic the forum brochures will not print. Reform credibility depends on macroeconomic stability. Macroeconomic stability depends on a manageable import bill. The import bill is hostage to fuel prices. Fuel prices are hostage to Hormuz. One Iranian escalation, one American miscalculation, one mine in the wrong shipping lane, and Ethiopia’s carefully constructed reform narrative hits a balance-of-payments wall it did not build and cannot move. This is not a risk factor to be managed. It is a dependency so total that the word “risk” understates the problem.
The counterargument is that Ethiopia has been diversifying its partnerships. The UAE invests in logistics. Italy finances dams. China remains the largest bilateral creditor. India is a growing trade partner. Four patrons instead of one — surely that is resilience?
