Ethiopia's Great dam wreaks havoc

Africa Intelligence, N� 1343, 03/11/2012


ETHIOPIA

Great dam wreaks havoc
The Ethiopian economic situation is in the worst state it�s been for
many years. The raising of funds to build the Great Renaissance Dam
has drained the liquidity and foreign currency in circulation. This
dam was the brainchild of the late Prime Minister Meles Zenawi and was
taken on board by his successor Hailemariam Desalegn despite the IMF�s
warning against it. The shortage of liquidity has led to imports being
restricted and Ethiopian businessmen have deserted Ethiopian Airways
flights to Dubai. This shortage of foreign exchange also affects the
banks. Finally, Meles Zenawi�s economic legacy could turn out to be
less positive than his partisans are claiming. In any case, his
successor will have his work cut out and things have got off to a bad
start for him. For example, Hailemariam Desalegn made little
impression on the local and foreign investors he gathered at the Addis
Ababa Sheraton hotel on 24 October. He did not manage to reassure them
on the country�s economic outlook. To make things worse, he has been
in a muffled (at least for the time being) conflict against certain
high level TPLF (Meles Zenawi�s party) leaders. For one thing,
Hailemariam Desalegn is still receiving his distinguished guests in
his own home, because Azeb Mesfin, Meles Zenawi�s widow, has still not
left the official prime ministerial residence. This is a slap in the
face for Hailemariam and also undermines his authority.



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