On International Youth Day, there is a temptation to celebrate young people as the promise of tomorrow. But for millions of young people, particularly in countries where employment opportunities remain limited, tomorrow is not the main concern. The immediate question is much more basic: where is the work?

This is where the International Labour Organization’s Global Employment Trends for Youth 2026 becomes particularly relevant to Ethiopia. Its message is neither simply optimistic nor pessimistic. Youth labour markets have recovered in important respects in recent years, but that recovery has not translated into an easy transition from education to secure and productive employment for everyone. Progress has stalled in important areas, while the pathway into working life remains difficult for many young people.

For Ethiopia, the significance of this global picture is greater than simply comparing one country with another. It forces us to confront a difficult reality: when employment opportunities are insufficient, decent work can begin to sound like a luxury.

A young graduate who has sent dozens of applications without receiving a response may not initially ask whether a prospective employer provides adequate social protection, career development or a safe working environment. A young person supporting a family through irregular income may first ask whether there is an income at all. And someone entering the labour market for the first time may accept almost any opportunity because unemployment offers no alternative.

But this is exactly where the debate about decent work becomes important.

The scarcity of jobs should not become an excuse for the scarcity of rights.

Ethiopia cannot afford to create a false choice between employment and decent employment. The country needs more jobs, but it also needs to ensure that the jobs being created do not trap young people in a cycle of poverty, insecurity and vulnerability.

This distinction matters because having work and having decent work are not the same thing.

A young person working long hours for an income that cannot cover basic living costs may technically be employed. A graduate working without a written contract may be counted as employed. A young worker in an unsafe workplace may also be counted among those with jobs. Yet employment statistics alone cannot tell us whether that young person has actually achieved economic security or dignity.

This is one of the central questions Ethiopia must confront as its young population continues to enter the labour market.

The challenge is not merely to reduce unemployment figures. It is to build an economy capable of generating productive, sustainable and protected employment at the scale required by the country’s youth population.

And that is where the Ethiopian debate needs to move beyond the familiar language of “creating opportunities.”

Young people do not need opportunities only in speeches. They need pathways into the labour market.

For many, the transition begins with education and ends in a frustrating period of waiting. A university degree does not automatically translate into employment. Technical and vocational training does not guarantee a job. Even those with skills may struggle when the economy does not generate enough positions in which those skills can be used.

The result is a dangerous mismatch: young people are told to acquire skills, while the economy is not always generating sufficient demand for those skills.

This means Ethiopia’s youth employment strategy cannot place the entire responsibility on young people. Entrepreneurship, skills development and employability are important, but they cannot substitute for broader economic transformation.

Telling every unemployed young person to become an entrepreneur is not an employment strategy by itself.

Some young people will build successful businesses. Many others, however, need wage employment, apprenticeships, industrial jobs, agricultural opportunities, services-sector employment and other forms of productive work. A functioning labour market must provide multiple pathways rather than presenting entrepreneurship as the only acceptable alternative to unemployment.

There is also a deeper social dimension.

For a young person, prolonged unemployment is not simply the absence of a monthly salary. It can mean delayed independence, postponed family formation, dependence on parents, loss of confidence and exclusion from economic life. For households, one unemployed young person can represent another financial burden. At national level, prolonged youth unemployment means a generation of productive potential that is not being fully utilized.

That is why Ethiopia’s youth employment challenge should not be treated only as a labour-market issue. It is an economic, social and developmental question.

The ILO’s global assessment provides an important reminder that recovering youth employment numbers do not automatically mean that young people are entering secure and fulfilling working lives. For Ethiopia, the lesson should be even sharper: we need to pursue quantity and quality simultaneously.

First, there must be enough jobs.

Second, those jobs must increasingly become better jobs.

These are not competing objectives. They are connected.

A young worker cannot enjoy decent work if there is no work. But creating employment by normalizing extremely low wages, unsafe conditions, excessive working hours or insecure arrangements is not a sustainable solution either. It may reduce unemployment temporarily while reproducing working poverty.

The real policy challenge, therefore, is to make job creation itself a route toward decent work.

That requires stronger links between education and industry, practical school-to-work transition programmes, apprenticeships and first-job opportunities, support for labour-intensive sectors, and an environment in which enterprises can create sustainable employment. It also requires protecting young workers once they enter the workplace.

Because the first job matters.

A young person’s first experience of work can determine whether they build skills, confidence and a career—or whether they become trapped in precarious employment. The first workplace should therefore be viewed not simply as somewhere young people earn their first income, but as the beginning of their participation in the economy.

This is particularly important for young women, who can face additional barriers in accessing employment and progressing within the workplace. A youth employment strategy that does not seriously address gender disparities will leave a significant part of the country’s productive potential unused.

International Youth Day therefore offers Ethiopia an opportunity to ask a more uncomfortable question than “How many young people are employed?”

We should also ask:

What kind of work are they doing? How much do they earn? Are they safe? Do they have contracts? Can they develop their skills? Do they have a voice at work? Can employment provide a pathway out of poverty rather than simply a temporary escape from unemployment?

These questions may sound ambitious in an economy where jobs themselves are scarce.

But perhaps that is precisely why they must be asked.

Decent work should not be presented to unemployed young people as a luxury they can demand after the economy becomes prosperous. It should be treated as the direction in which employment creation must move from the beginning.

Ethiopia needs to create millions of productive opportunities, but the ambition should not stop at putting young people on payrolls. The ultimate objective should be to build a labour market in which employment contributes to dignity, economic independence and a better future.

On this International Youth Day, therefore, the message should go beyond celebrating the energy and potential of Ethiopia’s young population.

Young people do not need to be told repeatedly that they are the future.

They need an economy that gives them a meaningful place in the present.

And before we can ask whether every young Ethiopian has decent work, we must confront the harder question first:

Where is the work?

Then comes the question that cannot be postponed:

How do we make that work decent?

One claim that has been made time and again in Ethiopian economic discourse over the past five years or so is that “printing money” on the National Bank of Ethiopia’s (NBE) part has caused high inflation. And people making this assertion seem to have been vindicated by recent events: the federal government has refrained from taking direct advances from the NBE for two consecutive years and, meanwhile, official numbers have begun to show easing in the inflation rate (up until the war in Iran). But is that claim defensible on factual ground? Is it even reflective of systematic economic thinking? I think the answer to both questions is no.

Making spurious and overblown assertions about inflation in Ethiopia is certainly not new. During the Ethiopian People’s Revolutionary Democratic Front (EPRDF) era, when the economy was officially growing by double digits, some people, including public officials, contended that observed inflation was the result of an “overheated economy,” either failing to appreciate how this would make little sense in an economy characterized by considerable slack or just trying to dupe the public. There have also been times when we heard the bizarre argument that inflation caused by “man-made” factors is unacceptable, as if price increases ought to be a natural phenomenon. So the alleged inflation driver at hand, i.e. printing money, is only one among many delusions.  

Why should we care? Mainly, it’s because inappropriate diagnosis of an economic problem, especially one made by elite opinion-makers or institutions which hold sway over government policy, can lead to inappropriate treatment, which not only leaves root causes unaddressed, but may even be counterproductive.  

Now what do we mean by printing money? Strictly speaking, it refers to the actual issuance of new currency by a government. In practice, however, direct central bank financing of government deficits, i.e. monetizing the debt, is also commonly, if less accurately, referred to as printing money. But never mind. Whichever notion people have in mind when they talk about printing money, the theoretical effect of the two cases is essentially the same, which is to increase the monetary base (i.e. create high-powered money) and, thereby, the money supply.

So let’s be clear: Printing money does not necessarily cause inflation. Yes, there is a general economic principle stating that high inflation, especially hyperinflation, arises when the government prints too much money, or when there is excessive money supply growth. But there are so many ifs and buts here. For example, how much is “too much”? How large and for how long is government spending covered by printing money? And how close is the economy running to its productive capacity? To propose a monetary explanation for inflation even as a hypothesis requires answering these questions. By contrast, there is a pervasive inclination among Ethiopian economic observers to assume any monetary injection as inflationary, as if the economy is in equilibrium at full employment – which it isn’t, not even remotely.

More important, the money-printing-turned-inflation story does not fit the available data at all.  First of all, it’s not like the government has financed deficits in or shocks to its budget solely with money creation; at least part of government spending has been covered by domestic and external debt. Also, neither the money supply nor inflation has risen in an extreme fashion. By the NBE’s own reckoning, the M2 money supply increased at an average rate of 26% a year between 2009/10 and 2023/24 – hardly extreme growth! And, for what it’s worth, Ethiopia’s M2/GDP ratio remains among the lowest in the world. Inflation, too, averaged 17% per annum, which is clearly excess, and hurtful, but by no means hyperinflation. Then, if you plotted the money supply (its growth rate) and the consumer price level (its inflation rate) over the same 15-year period, you would not observe tightly linked co-movements. And this should be no surprise given our dysfunctional interest rate and credit channels of monetary transmission.

But here is an even more informative analysis: The NBE’s control is confined to the monetary base – currency plus total reserves in the banking system – or to what we call reserve money – currency plus bank deposits at the central bank. And there were striking discrepancies in the growth trajectories of reserve money and the M2 money supply over 2009/10-2023/24. On some occasions, when the growth of reserve money plunged, money supply recorded double-digit growth – the two giving conflicting signals about the course of monetary policy. On others, when the expansion of reserve money became more rapid, that of money supply got slower. How, then, can you blame the NBE’s money-printing for inflation when even reserve money’s causal influence on the money supply has been dubious? Viewing the NBE as a sole source of money supply growth – which is also affected by what banks, depositors and borrowers do – or telling it to simply reduce the amount of money in the economy is indeed foolish. And in part, at least, the money growth probably reflects the fact that, as our economy has expanded, so has the money people need to hold for business transactions.

Note also that I haven’t even raised the issue of whether or not the NBE could actually justify an expansionary monetary policy stance – which it could in an economy suffering from high unemployment of both workers and resources.

At this point you might be wondering why the NBE’s revised establishment proclamation has then tightened the constraint on direct monetary financing of budget deficits (no more than 15% of average annual government revenues of the previous three years and only in the form of temporary overdrafts), notwithstanding the workarounds the federal government could still find. The compelling reason is that it helps to limit fiscal dominance of monetary policy and discourage fiscal irresponsibility. Similarly, the two-year-old termination of direct advances to the government is better understood as a precautionary measure than as a remedial action warranted by hard evidence of past inflation driven by excessive money supply.

But then, what would a more plausible account of our inflation look like? Surely it includes multiple factors, both from the demand and the supply sides, and not all domestic. Even the IMF – the ultimate producer of monetary narratives of inflation – identified drought-induced agricultural output shocks, currency devaluation, administered-price increases, political disorder that disrupted supply chains, and world food and commodity price surges as factors explaining Ethiopia’s excess inflation between 2009/10 and 2023/24. We also had a two-year-long war initiated in Tigray, as well as imported inflation due to the Covid-19 pandemic and especially the Russia-Ukraine war. Add to this the high likelihood that a rise in inflation expectations has played a role in pushing up actual prices lately, and characterization of our inflation as an offspring of money-printing ends up being a figment of the imagination.

One has to wonder, though, why some economic commentators have made a causal conjecture contrary to sound analytical reasoning and available evidence. It is safe to say that most of them have not thought the matter through. From a general knowledge of the government’s money-printing to pay some of its bills, they have made a very large leap to blame that for visible inflation, overlooking the economic circumstances under which this may be true or not bothering to check if their position holds in the data. Beyond this, some economic pundits probably cannot resist the urge to tell a monetary story about inflation because doing so sounds advanced. Whatever the real motivation, some soul searching is in order.

And not just among the commentator group. Just last month, an academic paper presented at the 23rd International Conference on the Ethiopian Economy singled out, once again, monetary expansion for driving domestic inflation. And based on this spurious inference, the study made audacious medium-term projections for inflation, before recommending that the NBE cap the growth of money supply in order to achieve single-digit inflation. Hah. If only matters were that simple and our inflation was that predictable.

That’s not the end of the story, though, since the claim that money-printing has caused inflation sometimes gets transmuted into declaration that tight monetary policy has enabled inflation to fall. The latter assertion all too often suffers from idle speculation, in three respects. First, it apparently commits the false cause fallacy: thinking that, because disinflation comes together with or right after the NBE’s monetary tightening, there must be a causal connection, without properly establishing the latter. Second, it does not tell us under which empirically founded transmission mechanism tight money causes disinflation in Ethiopia – presumably because there isn’t one. Finally, this assertion betrays the misguided belief that tight money directly brings inflation down, just like a tree cutter, whereas it first requires weakening economic activity or growth, and thereby possibly employment – the evidence of which is usually lacking.

But doesn’t the NBE’s Monetary Policy Committee (MPC) meet regularly and make proposals to manipulate liquidity in the banking system, especially commercial banks’ credit supply, with a view to achieving price stability? Well, policy must be made and the committee must rationalize whatever stance it adopts. My point is that at least in the foreseeable future its decisions can at most affect particular sectors of the economy, falling short of substantively influencing inflation due to lack of credible transmission channels on the ground. Thus it is logical for bank-dependent borrowers, be it individuals or businesses, to wonder if the MPC’s decisions impact their desired cash and working capital. But well-informed, policy-oriented macroeconomists are unlikely to hold their breath.  

In short, thinking of our inflation as a monetary phenomenon is far too simplistic. The claims purporting to have found a strong link between money printing/supply and inflation do not stand up to closer scrutiny. And you really don’t want to judge these claims by their sources, i.e. by how elite the latter are or appear to be. Only thinking things through and paying enough attention to factual conformity reveal that monetary factors have been of minor importance to aggregate economic activity and inflation in Ethiopia. And that is the bottom line.

A super El Niño is forming. Ethiopia’s history says the real risk isn’t the drought—it’s the silence.

The forecasters are getting nervous. A major El Niño is brewing—the kind meteorologists call a “super” event. The models give it a 69% chance of being the strongest since 1950.

In Ethiopia, that number should be a five-alarm fire. Instead, there’s barely a whisper.

Especially strange, given that the last two times this happened, an ocean current on the other side of the planet helped bring down the government—and crater the economy along with it.

By most accounts, the Ethiopian government has been unusually quiet. That silence can be read two ways.

One reading is complacency: a government that hasn’t absorbed the warning, or chooses not to amplify it, gambling that the last disasters were flukes.

The other reading is more interesting. Maybe the silence isn’t panic suppressed, but confidence earned—maybe someone in Ethiopia’s disaster-response machine has actually cracked the El Niño problem, building the monitoring, the stockpiles, the machinery to keep this one boring. Because that is the goal of modern disaster response: to be boring. Intervene early enough, and nothing newsworthy happens. Nobody throws a parade for a famine that didn’t occur.

Answering that depends on a bigger question: what actually determines whether a bad rainy season becomes a fallen government—and a broken economy?

Drought is weather. Famine—and fiscal collapse—are political choices.

As the Ethiopian scholar Mesfin Wolde Mariam argued nearly four decades ago (1984), drought does not, by itself, kill people—the absence of an effective response does. A dry season empties granaries; empty granaries drive desperate migration; desperate migration becomes a body count.

The treasury math is just as brutal. A single failed season can wipe out 10–15% of agricultural GDP, spike food-import bills by hundreds of millions of dollars, and force emergency borrowing that blows through fiscal deficit targets. Foreign exchange reserves get diverted to grain purchases. Development spending gets shelved. Inflation boils over.

Over the past five years, conflict has battered northern Ethiopia, eroding the resilience of farmers and pastoralists there—mirroring the exact conditions that helped turn drought into famine in the 1980s. It doesn’t take much imagination to guess what a super El Niño would do to a region, and a budget, already this stretched.

At every step, a functioning institution could have intervened, and didn’t. Or a broken one tried, and failed. History is littered with such moments—from the Indus Valley to the Khmer Empire, when the rains fail, even the mightiest civilizations wobble. Ethiopia is basically a laboratory for this lesson, run across a thousand years.

THE ECONOMICS OF SURVIVAL—AND COLLAPSE

Take the 1880s famine known as Kifu Qan—”the evil days.” Drought, cattle plague, and locusts wiped out roughly one-third of the population. Unfathomable. Yet as the historian Richard Pankhurst documented (1964), Emperor Menelik’s government still distributed grain from royal stores and restocked cattle afterward. Imperfect, insufficient—but real, and it kept the state standing. It also protected the crown’s tax base: keeping farmers alive meant keeping them productive. That wasn’t charity. That was self-preservation.

Compare that to the two episodes that should haunt today’s forecast. In 1973, Haile Selassie’s government chose to hide a drought-driven famine rather than fight it. The cover-up helped topple a 3,000-year-old monarchy within a year (Koehn, 1979); agricultural output collapsed, foreign aid dried up, and the regime’s creditworthiness evaporated overnight.

In 1983–85, the rains failed again, this time colliding with civil war and the Derg’s brutal policies. The result was the famine that gave the world Live Aid—and gave Ethiopia a reputation it has spent forty years outrunning. The fiscal hangover lasted even longer: decades of aid dependency, a paralyzed rural economy, a generation of farmers too wary to reinvest in their own land.

Same country. Same ocean current. Wildly different outcomes. The variable was never really the sky. It was the people in the room when the bad news arrived—and the price they were willing to pay to face it honestly.

THE UNGLAMOROUS PLUMBING OF ANTICIPATION

What’s changed since the 1980s isn’t Ethiopia’s weather. It’s Ethiopia’s plumbing: satellite monitoring that flags a bad season months out, food-price surveillance that tracks markets like an ER tracks vital signs, and the Productive Safety Net—launched in 2005—that gets cash and food to millions on a predictable schedule rather than waiting for an emergency.

None of this is dramatic. It won’t inspire a benefit concert. That’s the point. A good disaster system reacts before there’s anything left to react to, which is precisely why it never makes the news—and precisely why it rarely topples the government, or the budget, that built it. Aid economists increasingly agree that a dollar spent before a crisis can save several dollars spent after one. Prevention isn’t just humane. It’s fiscal common sense.

But here’s the catch, and it’s a big one. Every time Ethiopia’s system catches a falling crisis, it also relieves the pressure to fix the reasons the crisis keeps happening: drought-prone farming on marginal land, dependence on rain-fed agriculture, chronic poverty, a tax base too narrow to fund real resilience.

None of that disappears because a cash transfer kept people fed through a bad year. Think of it like a good painkiller for a chronic illness—it stops suffering, saves lives, and nobody should feel guilty for taking it. But it also quietly removes the urgency to treat the disease underneath. Ethiopia may be getting better at surviving droughts without getting meaningfully better at not having them. “No famine” and “no vulnerability” are not the same headline—and for the Ministry of Finance, they carry very different price tags.

A PROBLEM BIGGER THAN ONE COUNTRY

Droughts in the American Southwest. Floods in Pakistan. Heat waves that used to be once-a-century events. As climate stress intensifies everywhere, the question isn’t whether disaster will strike—it’s whether governments act in time, or find out from the funerals.

The Ethiopian case suggests the line between environmental catastrophe and political catastrophe isn’t fixed by nature. It’s built—badly or well—by institutions: early warnings, honest information flows, the political will to act on bad news before it becomes undeniable, and the fiscal discipline to fund resilience before the emergency hits. Build them well, and a country can absorb repeated shocks without breaking the bank. Build them badly, or lie about what they show, and a bad harvest becomes a revolution.

Which brings us back to that unsettling silence around the current El Niño.

The generous reading: Ethiopia’s disaster machinery has genuinely decoded this threat—the forecast is a spreadsheet problem being quietly managed in a ministry office, not a front-page emergency. The silence is a system working as intended.

The less comfortable reading: today’s silence is avoidance dressed up as calm. Every institution built since 1991 has been tested against drought—but rarely against a drought landing on top of the conflict, displacement, and economic strain Ethiopia already carries today.

The 1983–85 catastrophe wasn’t a monitoring failure—the warning signs were visible even with far cruder tools than exist now. It was a failure of honesty and political will: the regime refused to pause its war, choosing instead to lavishly celebrate the tenth anniversary of the revolution while the crisis unfolded. The fiscal priorities were, to put it mildly, inverted. If we’re repeating that playbook, history says exactly how the story ends.

So the fair answer isn’t “the government is fine” or “the government is doomed.” It’s narrower, and more useful than that.

Has this government built—and is it using—the detection, the stockpiles, the fiscal buffers, and above all the honesty to keep a bad rainy season from becoming a political and economic reckoning?

Ethiopia has proven, more than once, that it’s capable of exactly that. It has also proven, more than once, what happens when it isn’t.

The forecast doesn’t tell us which Ethiopia we’re about to see. The next few months of silence—or noise—will.