The Ethiopian government led by new premier Abiy Ahmed announced a slew of reforms on Tuesday, including ending its border dispute with Eritrea and opening key economic sectors, among them Ethiopian Airlines, to foreign investment.
Both steps represent major policy changes by Abiy, the first prime minister in modern Ethiopia from the country’s largest ethnicity the Oromo who took office in April after years of anti-government protests and political turmoil.
A former province, Eritrea became Ethiopia’s bitter foe after a 1998-2000 border conflict followed by Ethiopia’s refusal to accept the ruling of a UN-backed boundary commission that divided up contested territory between the two countries.
In a surprise announcement that came on the same day as parliament’s repeal of a nationwide state of emergency, the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) said it would “fully implement” the boundary commission’s 2002 decision.
“The Eritrean government should take the same stand without any prerequisite and accept our call to bring back the long-lost peace of the two brother nations as it was before,” the EPRDF wrote on Facebook.
Since the formal end of the border conflict, Ethiopia and Eritrea have taken starkly different paths, with Eritrea growing increasingly isolated while Ethiopia has exerted power across the region, fuelled by an economy that has expanded at one of the fastest rates in Africa.
But a shortage of foreign currency is seen as threatening that economic growth, which dropped to 8.5 percent this year from 10.9 percent in 2017, according to the International Monetary Fund.
Looking to increase the players in the economy, the ruling party said it would sell minority stakes in Ethiopian Airlines and the sole telecom company Ethio Telecom to foreign investors — a reversal of years of policy that closed those sectors to outsiders.
The move would “enable Ethiopia-born citizens living abroad who’ve long wished to work on the development of their country, and… foreigners who have the knowledge and foreign currency, to play a positive role in our growth,” said the statement issued after a meeting of top EPRDF officials.
