The just ended Ethiopian Year 2017 could well be looked back on as a crucial period for the country characterized by seismic shifts in policy, rising public pressure and internal tensions, and volatile international currents. The events of the past year have brought questions about reform, governance, and Ethiopia’s future to the forefront.
It will be remembered as one where politics, economics, and public life collided in ways that reshaped the country’s trajectory. It was a year of sharp contrasts, in which bold reforms often collided with the realities on the ground and persisting resistance. It was a period where new faces in power were faced against old wounds in society, and pride in national achievements against deep anxieties about peace and stability.
The year began in the immediate wake of the government’s decision to liberalize the foreign exchange market as part of its sweeping macroeconomic reforms. Announced with plenty of fanfare on the final day of July 2024, the currency float has since seen the Birr lose more than 200 percent of its value against the US Dollar over the last 12 months.
Although the gap between parallel and official forex rates dropped down from over 100 percent to around 15 percent in the aftermath of the shift, the gap has since grown wider. Banks offered up to 139 Birr per USD at the close of 2017 E.C., while street traders in Addis Ababa reportedly offered as much as 180 Birr or even more.
Analysts contend that the difference exposes the wide credibility gap in monetary policy and the liberalization remains a hotly debated topic in coffee shops and boardrooms alike.
The float was not the only big change to start off the year.
Prime Minister Abiy Ahmed’s administration also made the landmark announcements that it would halt direct government borrowing from the central bank for the first time in recent memory, and end routine money printing — a practice long blamed by analysts and the public for fueling inflation.
The inflation rate, which sat near 33.5 percent before the IMF-backed reforms, had dropped to 13 percent by the end of 2017 E.C., according to the National Bank of Ethiopia (NBE). Food prices, however, continued to dominate the inflation basket, leaving millions of households in a precarious position.
Many have hailed the decision to end direct borrowing from the central bank as the reason behind a halving of the budget deficit to under two percent of GDP. Officials cite a combination of fiscal consolidation, monetary policy reforms, and improved revenue mobilization efforts for the apparent success framing it as a milestone in restoring macroeconomic discipline.
However, businesses contend that credit has become scarcer, imports pricier, and the cost of living and survival higher.
In terms of legislation, the year saw sweeping changes to existing tax laws and the introduction of the Property Tax Proclamation. Banking laws were amended to allow foreign participation, and lawmakers approved a bill permitting foreign investors to buy up real estate in Ethiopia for the first time.
The changes were framed by the government as a turning point in Ethiopia’s efforts to attract foreign investment, but not much has transpired in the months since, with critics arguing that regulatory ambiguity and the country’s ever-fragile security and political environment render the laws impotent.
The controversial Asset Recovery Proclamation ratified by Parliament in January has empowered authorities to confiscate assets not linked to a verified source of income, with the law applying retroactively as far back as 10 years.
While some officials branded it a “historic strike against illicit wealth,” the private sector voiced serious unease about the law. The private sector cautioned it could carry unintended consequences for entrepreneurship and investment confidence. International and local watchdogs, analysts and experts alike also questioned whether the law could be weaponized against political dissent.
Likewise, the controversial revisions to the Media and Civil Society Organization proclamations have stoked fears about a shrinking civic space, despite official assurances.
On the trade front, 2017 E.C. was a notable year. Coffee and gold exports soared, while the government stepped up its efforts to join the World Trade Organization (WTO) and break into new markets, but questions remain.
Ethiopia’s membership in the African Continental Free Trade Area (AfCFTA) was promoted as proof of its integration into global markets, yet with logistics costs among the highest in Africa, and the country still ranked 159th out of 190 in the World Bank’s Ease of Doing Business Index, many see a long way to go before its trade ambitions are realized.
As with trade, the political arena was anything but quiet over the last 12 months.
The resignation of Getachew Reda, former president of the Tigray Interim Administration (TIA) and a senior figure in the Tigray People’s Liberation Front (TPLF), made national headlines. His decision to quit both regional administrative and party leadership, citing irreconcilable disputes, underscored the fragility of Tigray’s post-war political order.
The subsequent establishment of a new political party by Getachew and the TPLF faction that remains loyal to him suggests that fragmentation, rather than consolidation, was defining the political landscape in Ethiopia’s northernmost region.
On the other hand, in Addis Ababa, the federal government pressed ahead with electoral reforms. Draft amendments to the Political Parties Registration and Electoral Code of Conduct Proclamation were tabled, with officials promising a level playing field ahead of the upcoming general election.
Opposition leaders have criticized the revisions as being superficial and for failing to address systemic imbalances, such as electoral board independence.
The year saw a lot of shuffling in government leadership and cabinet positions, including NBE Governor Mamo Mihretu’s resignation last week amid the implementation of the government’s ambitious monetary reforms. Mamo’s departure comes as the central bank navigates unprecedented challenges, including taming inflation, managing foreign exchange volatility, and curbing the fiscal deficit. Observers interpret his resignation as one that might put Ethiopia’s bold reform agenda in a tough spot, underscoring the high stakes and public scrutiny surrounding macroeconomic management in 2017.
Earlier in the year, Taye Atskeselassie replaced Sahle-Work Zewde as President. Taye’s rise was followed by a gush of cabinet moves. Gedion Timotheos (PhD) took the helm at the Ministry of Foreign Affairs, while Hanna Arayaselassie stepped in at the Justice Ministry and Adisu Arega Kitessa was unexpectedly appointed Minister of Agriculture.
The shuffling sparked speculation that the Prime Minister was both rewarding loyalty and preemptively managing rival power blocs.
Ethiopia’s security scene in 2017 was defined by both relief and anxiety. The federal government claimed progress against armed insurgencies. Reports surfaced that fighters linked to the Oromo Liberation Army (OLF-Shene) were leaving their remote strongholds, signaling possible openings for dialogue. Yet conflicts still continue in Oromia and Amhara.
The government has announced new investments in domestic arms production and drone technology, aiming to reduce dependence on imports. Officials described the move as both economic and strategic, stating that Ethiopia cannot defend sovereignty with borrowed guns.
Still, fragility remains the status quo.
In Amhara, irregular clashes between Fano militia and federal troops persist. In Tigray, discontent simmers under the surface, amplified by Getachew Reda’s resignation and the appointment of Lt. Gen. Tadesse Werede as the new head of TIA. In Oromia, the fight with OLF-Shane still goes on.
Meanwhile, mass displacement has remained a challenge with the International Organization for Migration (IOM) estimating over 2.2 million internally displaced persons (IDPs) nationwide by the end of the year.
Beyond conflicts, displacements and migration, natural shocks added to insecurity. Ethiopia recorded its highest number of seismic tremors in decades. Several quakes above 4.0 were felt in Addis Ababa and while damage has been limited, the psychological effect was significant in a country already on edge.
On the diplomacy front, the balance between pride and pressure defined Ethiopia’s policies and achievements in 2017.
Most notable was the completion and subsequent inauguration of the Grand Ethiopian Renaissance Dam (GERD) 15 years after its cornerstone was laid. Images of the massive dam’s full operation sparked nationwide celebrations, with government officials and the public alike hailing it as a symbol of resilience and sovereignty; a second Adwa.
But behind the festivities, relations with Egypt and Sudan remain strained. Egyptian officials have accused Ethiopia of jeopardizing their water security, while Addis Ababa has insisted on its sovereign right to develop.
WTO accession talks were revived with a target of February 2026. Ethiopia also took part in the BRICS Summit in Brazil, underscoring its desire to diversify partnerships beyond traditional Western allies.
However, relations with neighboring Eritrea soured further. President Isaias Afwerki’s repeated speeches, often transmitted as live broadcasts on Eritrean state television, accused Ethiopia of neo-colonial dependency and threatened renewed confrontation. Eritrea’s outreach to Egypt, Somalia, and Sudan fueled speculation of a counter-Ethiopian alliance. Addis Ababa downplayed the rhetoric publicly.
Ethiopia’s diplomatic balancing act was further tested by global alignments. Western donors pressed harder on human rights and governance reforms, while China and Turkey expanded economic footprints, financing infrastructure and manufacturing projects. Analysts described Ethiopia’s diplomacy as walking cautiously in an effort to keep the relationship balance between old patrons and new suitors.
In 2017, despite turbulence, Ethiopians found moments of unity. The launch of GERD provided one such moment, as did national mourning for migrants lost in Yemen’s waters. The year closed with Ethiopia still restless and reforming. Its economy bears the scars of inflation but showed tentative discipline. Its politics mixed with resignations and reshuffles, yet opened new debates about reform. Its security held, but under constant simmering tensions. And its diplomacy projected ambition even as tensions with neighbors loomed. As the year ended, Ethiopia remained a nation in motion, refusing to be still.
