Ethiopia’s recent economic reform program, supported by the International Monetary Fund (IMF), is being promoted as a step toward modernization, growth, and macroeconomic stability. But for millions of Ethiopians — especially the poor and small business owners — these reforms have brought nothing but hardship, higher prices, and broken dreams. At its core, the deal between Ethiopia and the IMF seems to benefit elites and foreign interests while pushing the country’s most vulnerable further into poverty.
One of the most painful reforms was the complete removal of fuel subsidies. The IMF encouraged the Ethiopian government to cut these subsidies, claiming they mostly benefit the rich. In reality, fuel subsidies were a lifeline for everyday people. They helped keep transport fares low, supported agricultural transport, and kept the price of essential goods within reach. Since their removal, transportation costs have soared, and food prices have followed — affecting the poor the most, not the wealthy.
The IMF often says that removing subsidies and allowing prices to rise will create a more efficient economy. But in countries like Ethiopia, where public transport and goods delivery rely entirely on fuel, rising fuel prices create a domino effect. Everything becomes more expensive, from bread to school supplies. Inflation rises, and the average citizen has no cushion to absorb the shock. The poor are not protected — they are punished.
The other major area of concern is taxation. Ethiopia is now under pressure to raise its tax-to-GDP ratio, and this is being done by targeting the informal sector, small business owners, and middle- to low-income earners. New tax laws, aggressive audits, and tighter regulations are crushing small enterprises, many of which were already struggling with high rent, utility bills, and inflation. Instead of supporting small business, the system is pushing them out of the market.
Small businesses are not just economic units — they are a backbone of Ethiopia’s job market. When a barber shop, a kiosk, a tailoring service, or a small café closes due to unbearable taxes, it means fewer jobs, more unemployment, and more young people left without options. This is the kind of environment that kills hope and drives people to search for opportunities outside the country, legally or illegally.
The truth is, IMF reforms are not designed for the poor. They are designed for balance sheets, debt repayment plans, and foreign investors looking for profit. These policies tend to please global markets but ignore local realities. The rich and politically connected can navigate or avoid these pressures, while the poor have no escape. The result is a growing gap between the wealthy elite and the struggling majority.
We’ve seen the effects of IMF-backed reforms in many African countries. In Kenya, Ghana, and Senegal, mass protests have erupted in response to similar measures — subsidy removals, tax hikes, and austerity programs. The people understand what’s happening: they’re being asked to carry the burden of reforms that serve others. They’re being told to “tighten their belts” while elites enjoy benefits and exemptions.
The rise in prices, the loss of subsidies, and the tax pressure don’t lead to economic stability for the poor — they lead to despair. Instead of reducing inflation, these reforms often make it worse in the short term, especially for low-income families who spend most of their earnings on basic goods and transportation. The idea that the rich were the only ones benefiting from subsidies is not only misleading — it’s dangerously false.
These conditions are also fueling one of Africa’s biggest problems: youth migration. When young people see no future, no jobs, and no support for entrepreneurship, they look elsewhere. The irony is that the very policies backed by the IMF — and supported by Western governments — are pushing youth toward illegal immigration, which those same governments claim to oppose.
At the heart of it all is a system driven by global financial interests, not human dignity. Ethiopia deserves reform — but not like this. Reform should uplift, not punish. It should protect the vulnerable, not sacrifice them for budget targets. The current approach is not just flawed — it is unjust. And until the voices of the poor are truly heard, these reforms will continue to do more harm than good.
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