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The Ethiopian government has announced that it has finalized negotiations for a $600 million Crisis Response fund aimed at addressing the economic pressures resulting from rising instability in the Middle East and the corresponding spike in global fuel prices. This support, revealed after high-level discussions with international financial institutions in the United States, comes at a crucial moment as Ethiopia grapples with challenges linked to conflicts in the Middle East and Ukraine. This funding is part of a broader multi-billion dollar cooperation strategy with the World Bank, the International Monetary Fund (IMF), and development partners such as Italy, France, and Germany.

The Ministry of Finance has indicated that the support is specifically designed to stabilize the domestic market, ensure a reliable fuel supply, and mitigate inflation that could arise from soaring global oil prices.

A key element of the government’s economic strategy is the management of fuel subsidies. While the government initially planned to phase out general fuel subsidies prior to implementing macroeconomic reforms, the recent liberalization of the foreign exchange rate (allowing it to be market-driven) has introduced new challenges, significantly increasing fuel prices when expressed in Birr.

The government has emphasized that transferring the full burden of global price increases and exchange rate fluctuations onto the public would lead to unsustainable inflation. Currently, the accumulated subsidy amount exceeds 300 billion Birr.

“Despite facing substantial financial pressure, the government has maintained the subsidy with a strong sense of responsibility, rather than passing the entire price increase onto the public,” stated Minister of Finance Ahmed Shide.

The Minister provided this update on May 4, 2026, while presenting the institution’s nine-month performance report to the Standing Committee on Planning, Budget, and Finance. During the session, it was stressed that shifting the entire global price hike to the public would trigger severe inflation. As a result, the government continues to allocate 100 billion Birr annually for fuel subsidies to protect low-income communities and prevent disruptions in industry.

The Minister explained that additional subsidies are being implemented due to the ongoing global conflicts. He noted that the government is reforming the procurement system and mobilizing support from development partners to successfully conclude negotiations for crisis-related responses, which will enable further reforms once the funds are secured.

The crisis in the Middle East had previously interrupted the process of sourcing fuel entirely from Kuwait, necessitating urgent and diversified procurement strategies. Although this initially resulted in a 50% reduction in diesel supply, the flow of fuel transported from Djibouti has now returned to previous levels, restoring the diesel supply to 9 million liters per day.

This newly secured $600 million Crisis Response support is part of a larger $1.6 billion package known as “DPO3,” funded by the World Bank and the Italian government.

According to the Ministry of Finance’s nine-month report on external resource flows, $2 billion has been disbursed thus far, with the World Bank contributing 73.3% of that total. Ahmed indicated that the nature of support from development partners has shifted from project-based aid to direct budget support and Balance of Payments (BoP) assistance. This transition provides the government with the financial capacity to implement fuel sector reforms gradually rather than abruptly.

In terms of total disbursements, the government aims to secure $4.1 billion for the year, having received $2 billion in the first nine months. With the implementation of the results from recent successful negotiations through June, the flow of foreign currency is expected to increase significantly, enhancing the capacity to support ongoing fuel reforms.

Why Ethiopia and Sudan must pull back from the brink

Editorial

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May 10, 2026

The escalating tension between Ethiopia and Sudan should alarm everyone in the Horn of Africa. Both sides must step back before a dangerous dispute becomes a full-blown war that would devastate civilians, destabilize neighboring states, and push an already fragile region closer to chaos.

What is unfolding now is more than a bilateral quarrel. Recent accusations, troop movements, and cross-border suspicion are reviving some of the same fault lines that have repeatedly turned the Ethiopia-Sudan relationship into a pressure point for the wider region. When two states with long borders, internal vulnerabilities, and overlapping security concerns begin speaking the language of retaliation, the consequences rarely stop at the frontier.

Sudan’s army has accused Ethiopia of allowing drone activity from its territory, while Ethiopia has rejected the allegations and pointed to Sudan’s links with armed actors hostile to Addis Ababa. Both governments are operating under severe internal strain. Sudan is still trapped in a brutal civil war, while Ethiopia is dealing with its own political and security fragilities, including tensions in the north and other parts of the country. That is exactly why escalation would be reckless. Neither side has anything to gain from turning a dangerous atmosphere into direct confrontation.

The hardest truth is that war would not remain limited to the two capitals. It would almost certainly spread instability across the Horn of Africa, a region already burdened by displacement, food insecurity, armed conflict, and diplomatic mistrust. Border communities would be the first to pay the price, but the damage would not end there. Trade routes, refugee flows, humanitarian access, and regional cooperation would all be disrupted, creating a chain reaction that could outlast any battlefield gains.

There is also a humanitarian dimension that cannot be ignored. Sudan’s war has already driven massive suffering inside the country, and Ethiopia is still recovering from its own recent conflicts. A new conflict between the two would only multiply the number of displaced people, overwhelm weak health systems, and make aid delivery even harder. In the borderlands, civilians would be trapped between suspicion and insecurity, while communities that depend on cross-border movement for survival would lose access to markets, services, and livelihoods.

This is why both governments should lower the temperature immediately. Public accusations, military signaling, and retaliatory rhetoric may play well in moments of domestic pressure, but they are a poor substitute for statecraft. Leaders in Addis Ababa and Port Sudan need to understand that every threatening statement raises the risk of miscalculation. In a region where armed groups, external backers, and proxy dynamics already complicate the picture, even a small mistake could trigger a much wider crisis.

The African Union and regional actors should not wait until a shooting war begins before speaking loudly. They should press both governments to restart direct communication, use established diplomatic channels, and avoid any military moves near the border that could be interpreted as preparation for conflict. Outside powers should also resist the temptation to widen the crisis by feeding rival factions or treating the Horn as another arena for geopolitical competition.

It is also especially sad to see Sudan and Ethiopia, two brotherly countries with deep historical, cultural, and people-to-people ties, reaching such a dangerous moment. The peoples of both nations have lived side by side for generations, sharing borders, trade, migration, and regional aspirations. A confrontation between them would not produce winners; it would only deepen suffering across the region.

The risks are even greater because regional and international actors may become involved directly or indirectly through support for rival factions and proxies. Countries such as United Arab Emirates, Egypt, Eritrea, Turkey, Iran, Saudi Arabia, and even larger global powers with strategic interests in the Red Sea and the Horn could find themselves drawn into the crisis in one form or another. The Horn of Africa has increasingly become an arena for geopolitical competition, and any Ethiopia-Sudan confrontation risks creating a wider proxy dynamic that would be extremely difficult to contain.

The current moment demands restraint, not bravado. It demands diplomacy, not military theater. And it demands that both governments place the region’s stability above short-term political messaging.

If Ethiopia and Sudan choose escalation, the cost will be paid in civilian lives, broken economies, displaced families, and a more fractured Horn of Africa. If they choose restraint, dialogue, and regional responsibility, there is still a chance to keep a dangerous dispute from becoming another regional catastrophe.

Strengthening Africa’s security architecture

Opinion

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May 10, 2026

Strengthening Africa’s security architecture

Africa has been increasingly drawn into conflicts and faces difficulty in preventing or managing them. At the Fourth India-Africa Forum Summit to be held on May 28-31, India can announce assistance to the continent in capacity-building in training, logistics, and technology. India-Africa defence industrial cooperation, particularly in affordable equipment and maintenance capabilities tailored to African conditions, will align with its evolving needs.

The assassination of the Defence Minister of Mali by jihadists in a suicide bombing on April 25 was the latest security shock in Africa. The rise of radicalised groups like Al Shabab and Boko Haram and dozens of others loosely connected with Al Qaeda and Islamic State has created security complications for the continent, from Somalia to Nigeria. They have led to military coups overthrowing governments in Niger, Mali, and Burkina Faso, which, in turn, have dissociated themselves from France, their traditional security provider, and withdrawn from the regional Economic Community of West African States (ECOWAS). These shifts are unravelling the African Union Peace and Security Architecture^[1](APSA), set up in 2002 to prevent, manage and resolve crises and conflicts within Africa.

APSA has had few successes. Africa faces over 50 ongoing armed conflicts, with over 35 million people displaced. Major hotspots include the Sudanese civil war, violence in the eastern Congo, and insurgencies across the Sahel – Mali, Burkina Faso, and Niger. Other significant conflicts exist in Somalia, Nigeria, and the Central African Republic.^[2]

Since 1946, Africa has accounted for nearly a third of international armed conflicts, underscoring its persistent security challenges. In recent decades, conflicts are increasingly internationalised, with external interventions rising sharply from 12 cases (1991–2010) to 27 (2011–2021). The period after 2014 saw a notable surge, peaking in 2015–16.

Total military spending across Africa grew by 8.5% in 2025 from 2024 to an estimated $58.2 billion. Algeria is the largest spender ($25.4 billion), and Nigeria is increasing expenditure by 55% from the previous year to $2.1 billion.^[3]

Why does peace consistently evade Africa, despite having, in the African Union Peace and Security Architecture, the most ambitious regional security governance frameworks in the contemporary international system? APSA, established alongside the transformation of the African Union from the Organization of African Unity, was a decisive normative and institutional shift from the principle of non-interference to that of “non-indifference.”^[4] This evolution reflected Africa’s recognition that sovereignty could no longer serve as a shield for atrocities, unconstitutional changes of government, or state collapse. APSA sought to be a comprehensive framework of institutions, norms, and operational mechanisms for “African solutions to African problems.”^[5]

The core of APSA is the Peace and Security Council (PSC), a standing decision-making body designed to function as Africa’s equivalent of a collective security council. Comprising 15 member states with varying tenure, the PSC is mandated to undertake conflict prevention, authorize peace support operations, impose sanctions, and coordinate post-conflict reconstruction. Its authority is supported by four principal pillars: the Panel of the Wise, the Continental Early Warning System (CEWS), the African Standby Force (ASF), and the Peace Fund. Together, these form a layered architecture that integrates diplomacy, intelligence, military readiness, and financial support.

The Panel of the Wise ^[6] is APSA’s preventive diplomacy arm – a proactive action to prevent disputes from arising, and stop existing ones from escalating into violent conflict. It consists of eminent African personalities tasked with mediation, quiet diplomacy, and advisory functions – but without enforcement authority. That hobbles its active efforts in electoral mediation and conflict de-escalation efforts in countries such as Kenya and Burkina Faso. The Panel of the Wise consists of five respected African personalities tasked with advising the PSC and the AU Chairperson. It runs parallel to the African Forum for Former African Heads of State and Government ^[7]which leverages the expertise of former leaders to support current governance, conflict resolution, and development initiatives across the continent.. Individual leaders like Thabo Mbeki, through his eponymous foundation and Olusegun Obasanjo, through his non-profit African Leadership Forum for young leaders, have been individually active. These have certainly contributed to embedding a culture of preventive engagement within African conflict management practices.

Other entities of APSA, like the Continental Early Warning System to anticipate and mitigate conflicts before escalation, and the Africa Standby Force (ASF) with five regional standby-brigades have uneven efficacy, limiting their transformative potential.

The ASF struggles with issues of readiness, interoperability, logistics, and political authorization. Although ad hoc coalitions such as the Multinational Joint Task Force against Boko Haram and the G5 Sahel Joint Force have demonstrated Africa’s willingness to act, they have often operated outside the formal ASF framework, highlighting both flexibility and institutional weakness. When in 2017 Mozambique faced insurgency in Cabo Delgado, the SADC ASF took a long time to be ready. Instead, Rwandan troops came and quelled the insurgency at the French behest.

There have been successes, for sure, over the past two decades. APSA has significantly strengthened Africa’s capacity for peace support operations, as seen in missions in Somalia (AMISOM/ATMIS), the Central African Republic, and Sudan. These interventions underscore the normative shift toward proactive engagement and collective responsibility. APSA has deepened coordination between the AU and RECs, creating a multi-layered security governance system that reflects Africa’s regional diversity.

However, a central challenge for APSA is financial dependency. Despite the establishment of the $610 million Peace Fund, the architecture has relied heavily on external donors, particularly the European Union, for operational and administrative costs. This undermines African ownership and constrains strategic autonomy. Efforts to enhance financial self-reliance, including the AU’s 0.2% import levy on all imports from outside Africa, have progressed slowly and unevenly.

The “Silencing the Guns” initiative, the flagship project of the AU’s Agenda 2063, encapsulates APSA’s long-term ambition to end violent conflict on the continent. Yet, the outcomes of this 2013 initiative have fallen short of expectations. While some conflicts have de-escalated, new and complex threats, such as violent extremism in the Sahel, insurgencies in Mozambique, and persistent instability in Libya and Sudan, have proliferated. The changing nature of conflict, characterised by non-state actors, transnational networks, and climate-related pressures, has tested APSA’s largely state-centric design.

A critical issue has been the gap between normative ambition and political will. The effectiveness of APSA mechanisms often depends on consensus among member states, which is not always forthcoming. Divergent national interests, concerns about sovereignty, and varying levels of commitment have frequently delayed or diluted responses. This has been particularly evident in situations requiring rapid intervention or sanctions against member states.

Despite these challenges, APSA does its best. Its greatest success lies perhaps not in resolving all conflicts, but in creating a framework within which African actors can collectively address security challenges. The architecture has normalized intervention in cases of grave circumstances and has elevated peace and security as central pillars of continental integration at least as aspirations.

Strengthening APSA will require addressing structural weaknesses. Enhancing the operational readiness of the ASF, bridging the early warning-early action gap, and ensuring sustainable financing are critical priorities. Equally important is adapting the architecture to emerging threats, including cyber insecurity, maritime piracy, and climate-induced conflict.

Can India play a positive role in this significant African effort? Certainly. As a long-standing partner of Africa and a major contributor to United Nations peacekeeping operations, India is well-positioned to support APSA. At the Fourth India-Africa Forum Summit to be held on May 28-31, India can announce assistance to APSA for capacity-building in training, logistics, and technology for early warning systems. India-Africa defence industrial cooperation, particularly in affordable equipment and maintenance capabilities tailored to African conditions and expanding cooperation in maritime security, counter-terrorism, and cyber resilience, will align with APSA’s evolving needs. Importantly, India’s Harambee development partnership model, emphasizing local ownership and demand-driven assistance, resonates with APSA’s foundational principle of African-led solutions.

In this way, India can be a catalyst in enhancing APSA’s transformation of Africa’s approach to peace and security. On its part, Africa through APSA must consolidate the gains, overcome persistent constraints, and better manage the rapidly changing security landscape.

Africa faces mounting trade costs as non-tariff barriers rise

Capital News

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May 10, 2026

Africa faces mounting trade costs as non-tariff barriers rise

African exporters are facing a growing and often overlooked burden from non-tariff measures, with a new UNCTAD policy update warning that compliance costs are now outweighing tariffs for most countries and are hitting developing economies especially hard.

The report, Invisible Barriers: The Costs of Non-Tariff Measures, says trade-related regulations have become more interventionist in recent years, driven by national security concerns, industrial policy and geopolitical tensions. While tariff rates rose sharply in 2025, UNCTAD found that non-tariff measures still impose higher costs on exports for 88 percent of countries, including many in Africa.

UNCTAD said the problem is particularly severe for smaller developing countries and least developed countries, which often lack the technical capacity, laboratories, certification bodies and administrative systems needed to comply with changing requirements. In some cases, exporters must route goods through third countries just to secure compliance documentation. The agency estimates that least developed countries lose about 10 percent of their exports to G20 markets because of their inability to meet these standards.

The report argues that the issue is not simply one of tariffs or market access, but of regulatory complexity. Non-tariff measures include import licensing rules, quotas and bans, but they also cover technical measures aimed at health, safety and environmental protection. While many such rules serve legitimate public policy goals, they can still create major trade costs through certification, labeling, inspection and information requirements.

For Africa, the implications are significant. UNCTAD says the cost of technical measures in Africa remains high, and the potential benefits of regulatory cooperation are large. In the agri-food and manufacturing sectors, stronger alignment of rules could reduce technical trade costs by 30 to 40 percent. The report says even limited cooperation among African countries, including mutual recognition of standards and better transparency around regulations, could improve South-South trade and make regional integration under the African Continental Free Trade Area more effective.

The update also warns that African exporters are often disadvantaged by weak transparency. Many trade measures are notified to the World Trade Organization too late, incompletely or not at all, making it difficult for firms—especially smaller ones—to understand which rules apply. UNCTAD says better transparency could reduce non-tariff trade costs by about 19 percent.

At the same time, developing countries have become more active in defending their interests in the WTO, while least developed countries remain underrepresented in trade diplomacy. UNCTAD says this “diplomatic silence” limits the ability of poorer countries to challenge restrictive measures or seek clarification on rules that may block their exports.

The report also highlights a broader shift in global trade policy. After years of tariff decline, the world is now seeing more trade intervention, with recent years marked by the COVID-19 pandemic, the war in Ukraine and new tariff hikes from the United States. Trade negotiations are increasingly focused on regulatory and administrative issues such as standards, conformity assessment, local content rules and import licensing, rather than tariffs alone.

UNCTAD says this makes regulatory cooperation more important than ever. It argues that countries should align domestic rules with international standards, strengthen notification systems and improve access to trade information. For Africa, the report says, these measures could help turn regional trade into a stronger engine of growth at a time when external market access is becoming more complicated.

The publication concludes that while non-tariff measures often pursue legitimate goals, their rising cost burden risks undermining decades of progress in trade liberalization. Without transparency, capacity-building and stronger regulatory cooperation, UNCTAD warns, African exporters will continue to face an uneven playing field in global and regional trade.