Urgent Diplomatic Appeal: Halt the Ethiopian Government’s Misuse of Funds  and Unjust Shutdowns of 5,607 Businesses, Arrest and Imprisonment of 250 Merchants

Amhara Digital Diplomacy
Appeal to IMF, World Bank and  Diplomatic Community 

Dear Members of the IMF Executive Board, 
Members of the World Bank Board of Executive Directors, 
and Esteemed Diplomats in Addis Ababa, Ethiopia, 

We, Amhara Digital Diplomacy, urgently appeal to you regarding the recent financial  commitments and actions of the Ethiopian government. On July 29, 2024, the IMF approved an  SDR 2.556 billion (approximately US$3.4 billion) Extended Credit Facility (ECF) arrangement for  Ethiopia, and on July 30, 2024, the World Bank approved the Ethiopia First Sustainable and  Inclusive Growth Development Policy Operation, which includes a $1 billion grant and $500 million  concessional credit from the International Development Association (IDA). While these  commitments are intended to support Ethiopia’s economic reform and development, serious  concerns have emerged that necessitate immediate and decisive action. 

1. Misuse of Government Authority and Economic Impact 

The Ethiopian government, led by the Oromia Prosperity Party, has recently engaged in alarming  actions targeting the business community under the pretext of addressing economic instability.  Instead of addressing the root causes of the country’s economic crisis, including ongoing  conflicts and instability, the government has unjustly scapegoated businesses. According to the  government’s own reports, 3,512 businesses were shut down for alleged price increases, 38  traders were arrested, and 2,095 businesses were closed for purported hoarding. Additionally,  212 individuals have been imprisoned under dubious claims. This wave of coercion extends to  an initial threat to shut down 24,386 businesses, demonstrating a disturbing pattern of  intimidation rather than tackling genuine economic issues.

This government action follows a drastic shift from a fixed to a floating exchange rate system,  resulting in nearly 100% depreciation of the national currency within two consecutive weeks. Such  economic disruptions have significantly impacted import costs and forced businesses to adjust  prices. Instead of addressing these economic shocks, the government has chosen to blame  businesses for the resultant hardships, further destabilizing the economy, eroding investor  confidence, and deepening the suffering of the Ethiopian people. 

2. Regulation and Control of Fund Utilization 

Both the IMF and the World Bank have outlined noble objectives aimed at supporting Ethiopia’s  economic reform agenda, promoting inclusive growth, and protecting vulnerable populations.  However, we are gravely concerned that without stringent oversight, these funds could be  misused by the Oromia Prosperity Party-led government to fuel further conflict, particularly in the  Amhara Region. The Ethiopian government has a documented history of diverting state resources  to suppress dissent and wage war against its own citizens. We, therefore, urge both the IMF and  the World Bank to implement rigorous controls and monitoring mechanisms to ensure that these  funds are not diverted to military operations or other forms of oppression. 

3. Direct Assistance to Vulnerable Populations 

The IMF-backed program aims to correct external imbalances by moving to a market-determined  exchange rate, which, while beneficial in the long term, will lead to higher prices for imported  goods. The World Bank’s operation emphasizes protecting poor and vulnerable people from the  costs of economic adjustment and expanding opportunities for them to participate in the  economy. We strongly advocate for the disbursement of assistance directly to those in need,  particularly through targeted subsidies and direct foreign currency transfers to international  vendors, bypassing government intermediaries. This approach will reduce the risk of corruption  and ensure that the financial support reaches those who are most affected by the economic  reforms. 

4. Strengthening Governance and Anti-Corruption Measures 

Both institutions have committed to advancing governance and anti-corruption in Ethiopia, which  is critical in the current context. The IMF’s focus on fiscal transparency and the digitalization of  public sector financial management, coupled with the World Bank’s emphasis on improving  financial stability and competition in the financial sector, are important steps. However, these  measures must be implemented in a way that does not reinforce the current regime’s power or  facilitate further exploitation of state resources. We call for full transparency in all financial  transactions related to these programs, including the publication of detailed reports on fund  utilization, and for strict accountability mechanisms to be enforced.

5. Focus on Sustainable and Inclusive Growth 

Both the IMF and World Bank have set ambitious goals for promoting sustainable and inclusive  growth in Ethiopia. It is crucial that these goals are pursued with a focus on addressing the root  causes of instability and conflict. We urge both institutions to ensure that their support fosters  genuine economic recovery and social welfare, rather than contributing to further unrest and  suffering. The World Bank’s commitment to supporting sustainable land and forest management,  expanding access to renewable energy, and boosting social safety nets is commendable.  However, these initiatives must be inclusive and ensure that all regions of Ethiopia, including the  Amhara Region, benefit equally. 

Conclusion and Call for Action 

The situation in Ethiopia, particularly in the Amhara Region, is dire, characterized by violence,  human rights abuses, and severe civilian suffering. We urgently call on the IMF, World Bank, and  the international community to: 

1. Condemn the Ethiopian government’s unjust actions against the business community and support efforts to promote free market principles and protect businesses that are  essential to the country’s economic recovery. 

2. Advocate for policies that address the root causes of economic instability, including the  cessation of conflict and the restoration of peace and stability. 

Your prompt attention and decisive action are crucial in addressing these urgent issues and  fostering a peaceful and stable future for Ethiopia. 

We appreciate your consideration of this matter and trust that you will act in the best interests of  all Ethiopians. 

Sincerely, 

Amhara Digital Diplomacy,  

https://amharadigitaldiplomacy.org

https://fb.com/amharadigitaldiplomacy

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