For Ethiopia’s business community, the greatest obstacle to growth today is no longer inflation, foreign exchange shortages, or access to finance. It is conflict.
Not the prospect of conflict. The reality of it.
Across different parts of the country, insecurity continues to disrupt production, discourage investment, interrupt trade, damage infrastructure, and weaken confidence. Every month that conflict persists raises the cost of doing business and lowers Ethiopia’s long-term growth potential.
Businesses can adapt to difficult markets. They can adjust to changing regulations, higher taxes, and even currency depreciation. What they cannot plan for is uncertainty over whether transport corridors will remain open, investments will remain secure, or markets will continue functioning.
The greatest economic dividend Ethiopia can generate today is therefore not another policy reform or investment promotion campaign. It is peace.
This is not to underestimate the government’s macroeconomic reforms. Stabilising inflation, improving public finances and reforming the foreign exchange system are important achievements. But macroeconomic stability cannot, by itself, generate sustained investment if political instability continues to undermine confidence.
Conflict is ultimately consuming the very resources Ethiopia needs to grow. Public funds that could finance infrastructure, education, healthcare, irrigation, and industrial development are instead diverted toward managing recurring crises. Private investors delay expansion. Banks become more cautious. Entrepreneurs become defensive rather than ambitious.
Most importantly, Ethiopia’s conflicts are political before they are security challenges.
Military operations may contain violence temporarily, but they rarely resolve the underlying disputes that give rise to it. Lasting economic recovery requires lasting political settlements. Without them, uncertainty simply becomes another cost of doing business.
Three policy directions therefore deserve renewed attention.
First, political dialogue should become the government’s primary instrument for resolving ongoing conflicts. Durable peace cannot rest solely on security measures. Political grievances ultimately require political solutions.
Second, restoring investor confidence should become an explicit national objective. Businesses need assurance that disputes will be managed through institutions rather than prolonged confrontation. Predictability remains one of the country’s most valuable economic assets.
Third, as fiscal space gradually improves, greater priority should be given to productive investments that expand employment and strengthen domestic production. Peace becomes more durable when citizens experience tangible improvements in their economic lives.
Ethiopia possesses immense advantages: a large domestic market, a young population, entrepreneurial talent, and strategic access to continental markets. These strengths remain intact. Yet they cannot deliver sustained prosperity while conflict continues to consume both public resources and private confidence.
The business community is not asking for the impossible. It is asking for an environment in which it can invest, produce, employ, and compete with confidence.
The lesson is simple. Ethiopia’s economic future will not be determined by fiscal policy alone. It will depend equally on the country’s ability to resolve its political differences peacefully. Ending the conflicts already underway is therefore not simply a security objective. It is the single most important economic policy the country can pursue.
