The Birr and the Pretence of Knowledge
A monetary history of modern Ethiopia
Ethiopia's monetary disorder across three regimes read as one recurring institutional disease. Fiscal dominance, suppressed prices, and a fixed-rate fiction have persisted from the Derg's printing press through the EPRDF's forex queues to Abiy's July 2024 float, surviving two revolutions and one substantial political opening. This series argues that the disease is knowable, its cure is known, and the patient has been unwilling. Twenty-eight articles across six parts, from the Maria Theresa thaler to what sound money for Ethiopia would actually require.
An argument by Zef Telahun
Signed editorial perspective — not the site's neutral reference analysis.
Part I — Framing and origins
If you read Ethiopian economic history one regime at a time, what you see is a sequence of distinct crises. The Derg's printing-press inflation…
A series on modern Ethiopian monetary policy could reasonably start in 1974, with the revolution that gave the state full control of the currency for the first time…
If a country's monetary history is going badly, the symptoms are dramatic: hyperinflation, currency collapse, queues at the bank. If it is going well, there is nothing to write about…
The 1945 proclamation that established the modern Ethiopian birr is, in the standard telling, a footnote: a routine act of post-war monetary housekeeping, comparable to the parallel reforms that gave most newly independent African states their own…
Part II — Revolution and the command economy
Begin with the famine. The 1972–73 Wollo famine killed an estimated 200,000 people, possibly more…
The January 1975 nationalisation of Ethiopia's banks is usually narrated as a social-policy event — a transfer of ownership from foreign and domestic capital to the people of Ethiopia…
In October 1984, the BBC's Michael Buerk filed a report from Korem in northern Ethiopia that began with the line that has anchored the standard memory of the event ever since: "Dawn, and as the sun breaks through the piercing chill of night on the…
If you wanted to know what was actually happening in the Ethiopian economy at any moment from approximately 1977 to 2024, you did not look at the official exchange rate posted by the National Bank of Ethiopia…
Part III — The EPRDF and the developmental state
The EPRDF — the Ethiopian People's Revolutionary Democratic Front, a coalition led by the Tigray People's Liberation Front (TPLF) — took Addis Ababa on 28 May 1991 after a final military offensive that drove Mengistu Haile Mariam into Zimbabwean exile…
On 6 May 1998, Eritrean mechanised units crossed into Ethiopian-administered territory near the town of Badme. On 13 May, Ethiopian Prime Minister Meles Zenawi declared a state of total war…
This series has, so far, treated the EPRDF's monetary architecture as a problem to be diagnosed. That is the editorial position the series takes, and it will return to it…
Every state taxes its citizens. Most do it openly: income taxes, value-added taxes, customs duties, property taxes, all listed in budgets that get debated, often loudly, in parliaments and newspapers…
Article 40(3) of the 1995 Ethiopian Constitution reads: "The right to ownership of rural and urban land, as well as of all natural resources, is exclusively vested in the State and in the peoples of Ethiopia…
If you had only the GDP figures, the story of Ethiopia from 2010 to 2020 would read as one of the great development successes of the twenty-first century…
Part IV — The chronic disorder
Across the entire EPRDF period, and into the early years of Abiy Ahmed's government, the central organising fact of Ethiopian economic life was the chronic shortage of foreign exchange…
When the Ethiopian government's official exchange rate stopped bearing any honest relationship to economic reality — which it did, with varying severity, across the entire post-1974 period — the Ethiopian population did not stop transacting in foreign currency…
Article 14 examined the GTP-era growth story from the macroeconomic ledger: the inflation, the parallel premium, the accumulating external debt. This article examines the same period from the *asset* side — the specific infrastructure that the…
Across the seventy-five years this series has covered — from the imperial monetary order of 1942 through the post-float architecture of 2026 — Ethiopia has fought, by my count, at least nine major military conflicts…
Part V — Abiy and the reckoning
Abiy Ahmed took office as Prime Minister of Ethiopia on 2 April 2018, in what was, by any measure, an unusual political moment. He was 41 years old, the first Oromo to hold the office in modern Ethiopian history, and he had been elevated through the…
The Tigray war began on the night of 3 November 2020 with a TPLF attack on the federal Northern Command, and ended (formally) with the Pretoria Peace Agreement of 2 November 2022…
On Monday 29 July 2024, the National Bank of Ethiopia announced that the birr would, henceforth, be traded at a market-determined rate. The same day, the IMF Executive Board approved a four-year Extended Credit Facility arrangement of SDR 2.556…
Article 21 described the moment of the float and the immediate consequences. This article describes the *architecture* being built around it — the institutional changes that, together, constitute the most ambitious overhaul of Ethiopian monetary…
Part VI — Costs, comparisons, and conclusions
Across the seventy-five years this series has covered, Ethiopian inflation has averaged in the low single digits, the high single digits, the low double digits, the high double digits, and (in Derg years and in 2022) the low to mid-thirties…
A series that argues for sound money for Ethiopia owes its readers an empirical demonstration that the prescription has worked elsewhere. This article provides it…
This series has tracked, across twenty-four articles, a recurring pattern: Ethiopia's monetary disorder has survived two complete changes of regime (imperial to Derg in 1974, Derg to EPRDF in 1991), one substantial political opening (Abiy's 2018…
Article 11 examined Meles Zenawi's intellectual project on its own terms, in his own voice. This article does the larger job: it presents the strongest version of the *developmental-state literature*'s defence of the kind of monetary architecture…
A series that has spent twenty-six articles diagnosing a disease owes its readers, at the end, a prescription. This article provides one…
The Ethiopian monetary disorder is a knowable disease, with a known cure, that has not been cured because the political-economy configuration of the Ethiopian state has, across three regimes and seventy-five years, systematically rejected the cure as…