Growth Without Peace Is A Mirage

Prime Minister Abiy Ahmed’s (PhD) recent declaration that Ethiopia will become Africa’s largest economy within the next decade captured headlines and stirred both optimism and skepticism. The ambition is not entirely misplaced—Ethiopia is a country of more than 120 million people, endowed with vast agricultural potential, a young labor force, and emerging industries in manufacturing, mining, and energy. It has all the ingredients to become an economic powerhouse. Yet ambition alone does not build prosperity. Without peace, political stability, and inclusive governance, the Prime Minister’s bold vision can turn out to be a rhetorical flourish rather than a credible roadmap for national transformation.

Ethiopia’s recent history illustrates the hard truth that sustained economic growth cannot coexist with recurrent conflict. Over the past five years, political and ethnic violence has disrupted supply chains, displaced millions, and drained public resources. The two-year war in the north alone is estimated to have cost tens of billions of dollars, devastated infrastructure, and eroded investor confidence. Even after the Pretoria Agreement, instability continues to flare in parts of Amhara, Oromia, and other regions, while intercommunal clashes persist across several areas. Every episode of violence diverts funds from development to security, slows trade, and keeps farmers from cultivating their land or businesses from investing. No amount of industrialization strategy or infrastructure spending can offset the economic toll of persistent insecurity.

Peace is not merely a moral or political imperative—it is an economic necessity. For Ethiopia to realistically aspire to become Africa’s biggest economy, it must first secure internal stability and social cohesion. Investors—both domestic and foreign—require predictability. Factories, logistics hubs, and energy projects cannot operate efficiently in an environment of curfews, checkpoints, and road blockades. The government’s own budget data shows a growing share of expenditure going to defense and security at the expense of social programs and capital projects. Unless this balance changes Ethiopia’s growth potential will remain hostage to its unresolved political conflicts.

Beyond peace, political inclusivity is essential for durable economic progress. The country’s federal system was designed to accommodate its diversity, but in practice, disputes over power-sharing and regional autonomy have become flashpoints for conflict. Efforts at centralization have met resistance, while regional administrations complain about being marginalized or under-resourced. The absence of a sustained, national dialogue on Ethiopia’s political future has left grievances to fester. Without a genuine process that allows all communities—large and small—to have a stake in the state, peace will remain fragile. And without peace, the economy cannot thrive.

In this context, PM Abiy’s projection, though visionary, risks sounding disconnected from Ethiopia’s day-to-day realities. The challenges are enormous: inflation remains in double digits, the birr continues to depreciate, unemployment is high, and external debt pressures are mounting. Foreign direct investment has not grown at the desired level due to instability and policy uncertainty, while exports remain overly dependent on coffee and gold. Infrastructure gaps in energy, transport, and digital connectivity persist, and many manufacturing zones built under the industrialization drive are operating below capacity. None of these problems can be solved through ambition alone. They demand a stable political environment where long-term planning is possible and confidence in governance is restored. The comparison with Africa’s leading economies—Nigeria, Egypt, and South Africa—makes this even clearer. These countries, despite their own difficulties, have built institutional frameworks that sustain growth over time. Ethiopia’s current per capita income and GDP size remain far below theirs. To close the gap within ten years, the country would need double-digit growth every year, coupled with a massive expansion in export capacity and industrial output. That kind of economic acceleration requires not only sound macroeconomic policies but also peace, consistent rule of law, and trust in public institutions.

A peaceful environment would unlock Ethiopia’s immense potential. The country’s energy sector, anchored by the Grand Ethiopian Renaissance Dam, could make it a regional power exporter. Its fertile lands could support large-scale agro-industrialization. Its young population could drive innovation and productivity, particularly in technology and manufacturing. But these advantages cannot be realized if conflicts continue to paralyze transport routes, displace communities, and divert youth from productive work to armed movements. Peace creates the stability investors need, encourages remittances from the diaspora, and enables the government to focus on critical reforms in taxation, land policy, and financial liberalization.

To move from aspiration to reality, Ethiopia must therefore attach priority to three interrelated objectives: peacebuilding, political consensus, and institutional reform. First, peacebuilding means more than ceasefires; it requires addressing the root causes of conflict—land disputes, competition for resources, and questions of political representation. Genuine dialogue among political forces and communities must replace the logic of zero-sum politics. Second, building political consensus around Ethiopia’s constitutional and governance framework is vital. A shared understanding of federalism, citizenship, and decentralization can defuse tensions that repeatedly derail progress. Third, institutional reform is critical to ensure that economic opportunities are distributed fairly, corruption is curtailed, and the rule of law prevails.

The Prime Minister’s economic vision can serve as a useful rallying point—but only if it is matched by an equally bold peace agenda. The government should channel as much energy into reconciliation and justice as it does into development planning. Rebuilding trust among citizens, ensuring freedom of movement, and opening space for dialogue with opposition and civil society are not distractions from the economic agenda; they are preconditions for it. Without political stability, even the most ambitious reforms will be built on sand.

Ethiopia’s future can indeed be bright. The nation has defied odds before, turning poverty and isolation into progress through determination and collective effort. But economic miracles do not occur in the shadow of war. The road to becoming Africa’s largest economy runs not through military might or rhetoric, but through peace, inclusion, and trust. If Prime Minister Abiy’s vision is to be realized, it must begin with the recognition that growth and stability are inseparable—and that peace is the first and most vital investment Ethiopia must make.