Traders sell sheep in Sholla Market, the day before the Ethiopian New Year, in Addis Ababa, on Sept. 10.The Associated Press
Once home to one of Africa’s fastest-growing economies, Ethiopia is struggling as the war in its Tigray region has reignited and weary citizens far from the front are pleading for peace.
Ethiopians are experiencing the highest inflation in a decade, foreign exchange restrictions and mounting debt amid reports of massive government spending on the war effort. Parliament early this year reportedly approved an additional $1.7 billion budget for defence.
On Tuesday morning, a drone strike hit a university campus in Tigray’s capital, Mekele, causing an unknown number of injuries, according to a media worker there who spoke on condition of anonymity because he didn’t have authorization to speak to other outlets. He said another drone strike also destroyed the station of regional broadcaster Dimtsi Woyane.
Ethiopian officials continue to paint a rosy picture for the country of well over 110 million people. “Our economy has continued to grow amid natural and man-made problems,” the planning and development minister, Fitsum Assefa, said earlier this month.
But the Ethiopian Economic Association’s meeting this month made clear the country is hurting, while international mediators urgently seek progress on talks to end the fighting.
Because of internal conflicts, the destruction of infrastructure and uncontrolled spending are hurting the economy while ordinary Ethiopians face weakening incomes and rising poverty, economist Alemayehu Seyoum told the meeting.
Ethiopia once seared into the global consciousness with a devastating famine in the 1980s. The country has since transformed its economy with mega-projects like the Grand Ethiopian Renaissance Dam, the largest in Africa, and large-scale construction projects in Addis Ababa, Africa’s diplomatic capital.
The economy grew at an average of 11% over the past decade.
But the war in the northern Tigray region, which began in late 2020, has caused immense disruption. In June, the International Monetary Fund said growth likely fell to 3.8% for 2021-2022 because of the war and a “sharp fall in donor financing,” among other factors.
The finance ministry has declined to approve the financing of three industrial parks, symbols of Ethiopia’s China-like development, citing “budgetary pressure.”
Instead, the economy has shifted to a war focus.
The finance ministry now pleads with the public and Ethiopia’s large diaspora to contribute to a “national cause” for war reconstruction and aid. Ethiopia’s National Bank introduced changes to give the government all possible access to foreign currency, including requiring foreign residents to convert all in their possession upon entry.
Certain development works continue, including Prime Minister Abiy Ahmed’s flagship projects like the beautification of the capital.
But some critics such as the spokesman for the outlawed Oromo Liberation Army, Odaa Tarbii, say “vanity projects” are not necessary now.
Anything seen as criticism of the war can be stifled. Last week, authorities blocked 31 local civil society groups from organizing a media briefing calling for peace.
Following criticism that its financial support was enabling the government’s war efforts, the World Bank last week said it will continue its partnership but expressed concern.
Some state-run sectors of Ethiopia’s economy continue to open to investors, as Abiy promised after taking office. The cabinet this month approved the entry of foreign banks, a significant step.
Ethiopia’s ambassador to the United States, Seleshi Bekele, said the “international community should support this initiative by helping to disarm the hostile (Tigray forces).”
U.S. special envoy Mike Hammer was again in Ethiopia last week to “discuss the urgency of immediate cessation of hostilities,” according to the State Department, which said “the Ethiopian people have suffered tremendously from this conflict.”
Ethiopia’s government was unsettled when the U.S. last year removed it from a preferential trade program over its failure to end the war in Tigray that the U.S. said led to “gross violations” of human rights. Addis Ababa is lobbying for a reversal.
Since then, global companies like PVH Corp have left Ethiopia, citing security reasons, and others are laying off thousands of employees.
Ethiopian Airlines, the largest aviation group in Africa, remains one of the country’s few profitable companies but has been accused by Tigray forces of transporting troops and weapons to the war front. The airline has denied it.
Inside Tigray, millions of residents are still largely cut off from the world. Communications and banking services are severed, and their restoration has been a key demand in mediation efforts.
An agricultural survey conducted in several accessible parts of Tigray last month by Mekele University personnel, shared with The Associated Press, found many crops were failing because of the lack of fertilizer. Even travelling had become “tiresome” because of the lack of fuel, the survey said.
Other shortages are deadly. In an email to the AP, the head of the Tigray health bureau said vaccines for children ran out more than a year ago, and women don’t have family planning supplies. Humanitarian deliveries have stopped because of the renewed fighting.
“The list is very long. I just don’t want to bore you with the details,” Amanuel Haile wrote. “The above are just enough.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
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