In my previous articles for The Weekly Capital, I explored a range of topics related to branding, marketing, media, and banking, including The Misconceptions About Branding, The Basics of Successful Branding, Why Brands Matter, Can Anything Be Branded?, How to Choose the Right Logo for Your Business, Amplifying Brands Through the Right Brand Ambassador, The Hospitality Culture of Ethiopia and Its Potential for Business Success, The Power of Personal Branding in Driving Success, Ethiopia’s Digital Banking Revolution and South Africa’s ATM Decline, The Impact of Mergers and Acquisitions on Ethiopia’s Banking Sector, and Rethinking Advertising Ethics in Ethiopia. Building on this discussion of business ethics, this article examines an important question: Are Companies Giving Back to Society or Seeking Publicity Through Corporate Social Responsibility?

In Ethiopia, helping one another has always been part of our social fabric. During difficult times, people stand together. During holidays, neighbor’s share food and support one another. Communities care for the elderly, people with disabilities, and those facing economic hardship. This culture of solidarity existed long before the modern concept of Corporate Social Responsibility (CSR) entered the business world. In recent years, many companies in Ethiopia have introduced what they call Corporate Social Responsibility programs. During major holidays, it is common to see businesses distributing food items such as rice, cooking oil, and other basic necessities to people in need. These efforts often come from good intentions and can provide temporary relief to those facing hardship. However, the way CSR is understood and practiced in Ethiopia deserves closer attention.

A company does not operate in isolation. It exists and grows within a society. The employees who produce goods and services come from the community. The roads they travel on, the schools they attended, the electricity they use, and the communication systems that support business activities are all products of public investment and national resources. Businesses benefit from society in many ways. They rely on human capital, public infrastructure, and a legal system that protects their operations. For this reason, CSR should not be viewed as a favor given to society. It is a responsibility. It is an obligation for companies to give back to the communities that contribute to their success. When companies support vulnerable groups, they should do so with care and respect. Many of the people receiving assistance have contributed to their country and communities throughout their lives. Some are elderly citizens who worked hard for decades. Others are people living with disabilities or individuals who have faced difficult circumstances beyond their control. Their dignity deserves protection.

Unfortunately, some CSR activities are presented in ways that undermine that dignity. Television programs and social media platforms sometimes show poor and elderly individuals receiving support while cameras focus on their living conditions and personal hardships. In some cases, people are filmed in highly vulnerable situations while company representatives highlight the support provided and repeatedly mention the company name. Such practices raise important ethical concerns. Helping people should never become a publicity exercise. Corporate Social Responsibility is fundamentally different from advertising. Advertising promotes products and services. CSR is intended to contribute to social wellbeing and create positive change. When these two purposes are mixed without proper care, the real meaning of CSR can be lost. Communication about CSR should follow clear ethical standards. First, the dignity and privacy of beneficiaries should always be respected. Images and stories should never place people in humiliating situations. Second, individuals should provide informed consent before their images or personal stories are shared through any media platform. Third, communication should focus more on the social issue being addressed than on the company itself. The purpose of sharing CSR activities should be to encourage collective responsibility rather than celebrate corporate generosity. When communicated properly, CSR can inspire other institutions and individuals to contribute to solving social challenges. It can also raise awareness about issues such as poverty, disability, education, healthcare, and environmental protection.

CSR should also go beyond short term charity. Providing food during holidays may help families for a few days, but it does not always address the root causes of social problems. Responsible companies should focus on long term impact rather than short term visibility. Supporting education, building schools, strengthening health services, protecting the environment, and creating opportunities for youth employment are examples of initiatives that can bring lasting benefits to society.

Many countries have already moved in this direction. In some places, companies are required to allocate part of their profits to social development programs. Across Africa, businesses have contributed to building schools, health centers, water facilities, and vocational training institutions. These investments help communities become stronger and more self-reliant. Ethiopia has also witnessed encouraging examples. Some companies actively support education, healthcare, environmental protection, and community development projects. These efforts deserve recognition and should continue to expand. What is important is to strengthen a culture of responsible and respectful Corporate Social Responsibility. Corporate leaders should understand that social responsibility is an important part of leadership. It reflects the values of an organization and its commitment to the society in which it operates. A company that respects the dignity of people earns lasting trust from society, and that trust is far more valuable than temporary publicity.

Corporate Social Responsibility should therefore be guided by three principles: responsibility to the society that supports the business, respect for the dignity of every human being, and commitment to long term development rather than short term publicity.

If these principles are respected, Corporate Social Responsibility can become a meaningful bridge between business and society. It can strengthen the relationship between companies and the communities around them while contributing to sustainable development. Most importantly, it can preserve the dignity of those being supported and uphold the values of compassion and solidarity that have long been part of Ethiopian society.

The Gulf ceasefire lasted barely three weeks. After Iranian attacks on three commercial ships in the Strait of Hormuz, the United States struck more than 80 targets, revoked Iran’s oil-sanctions waiver, and declared the memorandum of understanding “over.” Yet the market response was telling: Brent crude rose to around $79 per barrel—a meaningful jump, but far below April’s $120 peak, when the strait was closed outright. That gap between renewed war and restrained prices confronts policymakers with a key question: Is this the road back to blockade, or a violent renegotiation of the terms of passage?

Five months into the war, the severity of the underlying shock is not in doubt. This is not 2022, when Russia’s invasion of Ukraine rerouted supply, and the world absorbed a costly but manageable adjustment. Today’s shock is destroying supply rather than rerouting it, with lost oil output already exceeding that of the 1973–74 OPEC embargo. Once liquefied natural gas, fertilizer inputs, and freight are included, the global energy bill is at least twice the crude price quoted on trading screens.

There are two starkly different readings of Iran’s intentions. According to the first, Iran is seeking full control of the strait. That path leads to a larger conflict, another blockade, and a return to the price dynamics of March, when oil prices spiked. Alternatively, Iran is behaving less like a blockader than a toll collector, maximizing the revenue it can extract from traffic through the strait. Sporadic attacks on shipping then keep the risk premium alive without choking off the flow; oil prices remain elevated and choppy rather than soaring.

The evidence so far points, tentatively, to the second reading. American strikes have deliberately avoided Iran’s energy infrastructure; Iran’s attacks on shipping have been demonstrative rather than systematic; its parliament has debated tolls on “hostile” shipping; and the MOU itself envisaged Iran’s help managing strait traffic. None of this precludes escalation—miscalculation is the Gulf’s default risk—but for now both sides appear to be contesting the price of passage rather than passage itself.

For central banks, the two paths lead to very different destinations. If Iran is collecting tolls, elevated but broadly capped energy prices act like a chronic tax: painful, but not a reason to restart aggressive monetary-policy tightening. Interest-rate expectations would settle roughly where they stood two weeks ago, with attention shifting to second-round effects—whether higher fuel, freight, and food costs fuel wage pressure. If Iran is reaching for the strait itself, central banks will be compelled to act forcefully to prevent a temporary shock from becoming embedded inflation.

That is why markets react so sharply to every headline. Investors are not refining a single forecast; they are toggling between two regimes, and each jump in oil poses the same question: Is this a move from toll collection to blockade?

As a result, interest rates are unusually sensitive to oil. Positioning, at least, is healthier than in the spring: in March, many investors had effectively sold insurance against large swings in interest rates, and when oil spiked they were forced to buy it back at any price, amplifying every move. That exposure has largely been cleared out, so the same headline still moves markets, but without the forced unwinding of March.

Neither scenario, however, resolves the underlying policy bind. With inflation above central-bank targets, and public finances under strain worldwide, none of the standard responses works. Aggressive monetary tightening—unavoidable in the blockade scenario—impedes growth and undermines debt sustainability. Expansive fiscal support fuels inflation and drives up borrowing costs, now that foreign central banks no longer buy government debt at any price. And doing nothing invites a procyclical adjustment, with financing costs rising even as the economy slows.

To navigate this treacherous economic terrain, fiscal and monetary policy must reinforce rather than offset one another. That means targeting support at the most exposed households and sectors, rather than conducting broad cash transfers, and issuing debt that resists the lure of cheaper short-term paper, which merely concentrates refinancing risk when the next shock hits.

It is in the blockade scenario that this logic reaches its unorthodox conclusion. With central banks tightening even as the shock deepens, rising government borrowing costs would crowd out the targeted fiscal support most needed—unless central banks cap increases in short- and medium-term interest rates. With such intervention remaining firmly under central-bank control, and with a clear exit strategy, this would not compromise central banks’ independence, and the alternative—leaving them to bear the burden of adjustment alone—is worse. Recognizing the trade-off now, while the toll collector still holds sway, is preferable to confronting it in the middle of a blockade.

That option is not available to every country: success depends on fiscal starting points, institutional credibility, and investors’ confidence that intervention will be temporary. The US has the most room to maneuver, thanks to deep global demand for Treasuries, even as the dollar’s privilege gradually erodes. The Federal Reserve has held interest rates steady, and markets that began the year expecting cuts now flirt with hikes—the direction hinging on which Gulf scenario prevails.

The eurozone faces a more complicated trade-off. Its fragmented sovereign-debt markets mean that any conditional intervention immediately raises the question of which government is being supported, and why. The European Central Bank’s recent 25-basis-point rate increase underscored the dilemma: the ECB has little choice but to tighten, yet helping the governments most in need of fiscal support would revive the fragmentation fears its 2022 Transmission Protection Instrument was designed to contain.

Japan is in a stronger position: its large foreign-exchange reserves let policymakers resist yen depreciation before energy costs feed into domestic inflation. In either scenario for the strait, the United Kingdom has the narrowest path: a limited fiscal cushion, a persistent external deficit, and inflation running above the Bank of England’s projections point to a wider gap between UK and German government bond yields and a weaker pound.

Even the more benign scenario offers little comfort as winter approaches. European gas storage is at its lowest level for this time of year since 2011, while Qatar would require two months to restore LNG exports even after a durable reopening of the strait. Regardless of how the latest escalation is resolved, Europe’s energy bill will not fall materially before winter.

That is why sequencing matters. The economies most likely to need this toolkit lack the institutional credibility to use it, whereas those with the greatest credibility are least likely to require it. And the path will not announce itself in advance: by the time markets know which one they are on, the room for a measured response will have narrowed—and ordinary borrowers and savers in the most exposed economies will bear the cost of the delay.

Ethiopia is currently experiencing a moment of change. Its economy has seen real expansion through many years of state investment in major infrastructure projects including dams, railways, and industrial parks; but it has developed a large amount of debt, has significant inefficiencies, and relies on foreign assistance for a large part of its economy. 

The period of rapid economic growth that followed serious public investment in major infrastructure projects has ended and the country is transitioning to the new phase of the economic plan. There will be no more experimentation with public-private partnerships and they will now be an integral part of the country’s economic strategy.

It has already been decided that the government of Ethiopia will pursue public-private partnerships(PPP), but the key area on which to evaluate the success of this decision will be whether or not Ethiopia has sufficient institutional capacity; a sufficiently mature private sector; and sufficient political will to implement a successful program.

Why Ethiopia turned to Public-Private Partnerships

Ethiopia has turned to public private partnerships (PPP) due to severe financial constraints that threaten the country’s market economy; as such it is moving away from its ideological base. Fiscal constraints on Ethiopia include high levels of government debt, inflation and low levels of tax revenues. A recent audit conducted by the Office of the Federal Auditor General identified over 17 billion birr in total cost of mismanaged road construction and university construction projects, in addition to another estimated 20 billion US dollars needed for recovery and reconstruction over the next five years.

According to investment analysis “PPP is still a work in progress. We all understand the challenges. However, there are no viable alternatives that can sustain additional public sector borrowing.”

The developmental state has reached its limits from debt-financed investment. The private sector will now be required to support a greater portion of Ethiopia’s economy not because the government has abandoned its mission of developing its country, but because it has reached its maximum potential along that path.

The legal architecture — and where it falls short

Under Proclamation No. 1076/2018, Ethiopia has established a PPP Board that is headed by the Minister of Finance and a PPP Directorate-General that serves as the Board’s Secretariat. The sectors covered by the framework are energy, transport, telecoms, healthcare, education, and digital infrastructure. Ethiopian Investment Holding, with $47 – 48 billion in assets under management, will take minority interests in conjunction with private sector investors in key areas.

The structure looks good on paper. The reality on the ground lacks the critical element of capacity, credibility, and confidence. Investors require guarantees for profits repatriation, bankable tariff rates, enforceable contracts – these elements are not consistently in place. The PPP Unit within the Ministry of Finance operates without being adequately coordinated with the Ministry of Planning. Line ministries develop projects independently of each other and they do so, completely bypassing any involvement from central agencies. In most cases, when evaluating a project, investors do not fund framework processes; rather they fund projects with definitive authority, predictable cash flow and strong capable government institutional counterpart that can perform.

The projects showing PPP can work

Recurring projects tend to happen because of the success of preceding ones. For example, the Gad and Dicheto solar projects located in the Somali and Afar regional states were both procured using a public-private partnership (PPP) model. This is how PPP’s are meant to be operated — the use of private sector efficiency to deliver public goods in areas in which the government does not have the means or capability to provide timely, cost-effective services.

A great example of this style of partnership is the Addis Ababa–Adama Expressway project, whereby the public and private sectors both share the risks associated with the project, and toll revenue is used to establish a transparent, predictable revenue stream to fund the project. All future roads, railways, and transit projects built in Ethiopia should hopefully be constructed under similar circumstances.

The sectors that will define Ethiopia’s future

The focus of any government should be on energy and electrification due to their importance to all sectors (manufacturing, digital growth, health services, and education) which rely on universal electrification for their productivity and growth.

The most significant area for development and the least served by private businesses in Ethiopia is the agricultural sector. The World Bank predicts that, with enough private support, Ethiopia is likely to transition from being a net importer of food products to producing surplus food product above and beyond domestic needs (i.e., 20–25% surplus). The public/private partnerships required would include investment in cold chain infrastructure, investment in processing infrastructure, and investment in rural financial services to connect each of these smallholder produced food products to the commercial marketplace.  

The health sector is still a vastly under-developed frontier in Ethiopia and represents one of the missing links between achieving full coverage of health services throughout Ethiopia to all 130 million citizens with minimal or no increase in government health spending. Significant private investment is needed for private hospitals, diagnostic laboratories, and supply chain facilities for pharmaceuticals to allow for the widest access of services to all Ethiopians.  

By improving digital infrastructure (broadband access), farmers would have access to real-time market information, students would have access to global knowledge and businesses would be able to compete on the international market. The premise is simple; the government has ownership of spectrum and regulatory permission to operate in the market; therefore, it is the job of the private sector to bring capital, technology and operating skills to the market.

The five tests that will decide Ethiopia’s PPP future

The legal framework to support institutional capability is in place, but there is an urgent need to develop project preparation capability, such as bankable feasibility studies, credible risk management frameworks, and enforceable contracts.

Investors remain concerned by ongoing foreign exchange restrictions that impede investment, so reasonable confidence will never be achieved from IMF engagement and debt rescheduling without visible evidence of improvement.

Renegotiation of commercial contracts has been a common occurrence throughout Ethiopia’s history and signals to investors that commercial contracts are conditional. The commercial rule of law is the central pillar on which the entire public-private partnership business model relies.

The domestic private sector is not capable of supporting one billion dollar deals; therefore, strategies such as joint ventures, technology transfer, and local procurement should be utilized intentionally to build their capacity.

There is a tension between an overly controlling government and a private sector that prefers to exercise autonomy that has yet to be resolved. To be successful, the framework should be secured in a way that is deep within the institutions of the country so that it can survive times of change in its leadership.

Beyond financing: Redefining the relationship between state and market

A true PPP (Public-Private Partnership) model creates a different fundamental relationship between a state and a citizen. When the state partners with an investor or entrepreneur, they are saying collectively to both the investor and entrepreneur: We trust that you can deliver public goods in partnership with us for mutual benefit, and subject to the terms of accountability agreed upon before entering into partnership.

At a recent investment forum in Ethiopia, the head of the Ethiopian Investment Holding Company challenged private sector participation directly: The government provides capital, land, and regulatory support; however, investors have to provide at least half of the solution. This is the right approach. A PPP works when both parties provide something that neither party could provide alone. A PPP fails when either party tries to take control of the arrangement.

Ethiopia has an abundance of renewable energy resources available. With its prime geographic location, youthful population, and numerous members of its diaspora interested in investing into the country, now is the time to develop an adequate institutional framework in order to transform these resources into collaborative agreements with partners to bring electricity to rural communities, develop roads connecting rural communities to markets, provide healthcare to rural areas, and create employment opportunities for young people who can’t afford to wait for jobs.

A partnership agreement between the government and private sector is more than just a financing vehicle; it is a contract between what the country is now and what it has determined to become in the future.