Energy, Agriculture and Manufacturing: Essential for Ethiopia’s Economic Future

Lawrence Freeman visiting Friendship Park in Addis Ababa on his first day in Ethiopia.

HORN REVIEW: IDEAS CONNECTIONS SYNERGY SIXTEENTH EDITION: Grand Narratives as Foundational Constructs of Ethiopia’s Foreign Policy

Lawrence Freeman is a distinguished researcher and analyst with over 30 years of experience specializing in the social, political, and economic dynamics of the African continent. Freeman has dedicated significant attention to Ethiopia, producing a wealth of insightful commentaries on the country’s evolving challenges and opportunities. Interview by Horn Review, was conducted during Mr. Freeman’s visit to Ethiopia (May 12-25, 2025)

“GERD, Agricultural Reforms and the Future of Regional Integration in the Horn of Africa”

Horn Review: Professor Freeman, welcome to our podcast. Great to have you here. Lawrence Freeman: Thank you very much.

Horn Review: From your perspective, how would you assess the trajectory of Ethiopia’s current agricultural reform agenda? Are the recent state-led initiatives showing signs of structural change? Lawrence Freeman: Yes, I would say that the progress being made by Ethiopia in agriculture is very significant. The government thinks they have already reached self-sufficiency on wheat in 2022/23, and they’re projecting they may be able to produce 30 million tons of wheat in 2025. Several things have taken place that have made it effective. One is they’re increasing the use of irrigation, which is necessary for modern farming. This has increased the number of hectares where they can grow crops. Second, Ethiopian farming was based on subsistence farming of one to two hectares, but now the concept is cluster farming, where groups of farmers come together, prepare the land, plant, plow, and use advanced machinery collectively. This collective strength has led to a huge increase in productivity and income per hectare, according to the agricultural department. These are some of the things Ethiopia is doing, and pretty much Ethiopia should no longer be importing any food from this point on. This is very important because Africa, for no good reason, was importing tens of billions of dollars of food across the continent, even though the land was perfectly capable and was self-sufficient in the 60s and 70s. Due to neoliberal economic policies, development stopped. Ethiopia is playing a very good role in promoting this kind of development. This has been one of the driving points of Prime Minister Abiy Ahmed. They have reduced levies on buying tractors and equipment and reduced taxes. The whole orientation of promoting agriculture is substantial and hopefully will continue.

Horn Review: How do you view the Grand Ethiopian Renaissance Dam as a strategic asset for agricultural transformation in Ethiopia? Do you see it meaningfully supporting irrigation and mechanization in the short or long term?

The magnifiant Grand Ethiopian Renaissance Dam, almost completedMay 2025

Lawrence Freeman: Since May 2025, almost everything has been completed; all 13 turbines and waterways have been constructed that bring water down to the turbines. They are now in the testing phase, with about six turbines operating and testing the remaining seven. The target for completion and inauguration is likely to be in September or earlier.

This is a huge plus for Ethiopia. The dam holds 74 billion cubic meters of water, which will essentially push water out to irrigate the entire area, as Ethiopia has numerous river systems. Although the water flow from the dam is not to be used for agriculture, but for hydroelectric power, the increase in water presence and moisture in the area will affect agriculture. Of course, there will be more electricity. The dam’s capability right now is about 2,600 megawatts, but it was reaching about 1,800 megawatts when I visited the GERD. Once you begin to utilize more of the 5,150 megawatts available, you start electrifying rural areas. When poor farmers in rural districts begin to have electricity, that changes everything. As you get more electricity to rural areas, you transform productivity, farming, and make every farmer and worker more productive.

Horn Review: Do you think the West recognizes the significance of Ethiopia building the largest hydroelectric dam on the continent? Lawrence Freeman: No, I don’t think there has been enough recognition by the West, certainly not by the United States or Europe. Ethiopia is building the largest hydroelectric dam on the continent and the 17th largest in the world. This is a real plus, which unfortunately the West ignores or doesn’t want to recognize at this point. Horn Review: What would you say is the effect of increasing energy production on Ethiopia’s food security and economy?

Lawrence Freeman: Electricity is the most important single ingredient to a successful economy. Infrastructure is essential. You need infrastructure that includes electricity, rail transportation, road transportation, and water management. All this creates the platform on which the entire physical economy rests. The denser and more advanced your infrastructure platform is, the more it raises productivity at all levels of the economy. For example, across Africa, 30 to 40% of food rots before it reaches the market; in Ethiopia, it’s about 30%. To correct that, you need infrastructure that gets food to market quickly, such as modern fast rail transportation and refrigerated cars to keep food from spoiling. This all requires electricity and roads. There’s no way to become an industrialized economy and lift all people out of poverty without infrastructure, and electricity is the key to infrastructure. With the completion of the dam and the addition of 5,150 megawatts, Ethiopia will become the second-largest electricity producer in sub-Saharan Africa, only behind South Africa, which has a nuclear power plant. That is significant, but not enough for 130 million people. Every part of society must be connected to electricity to achieve real independent sovereignty of development and reach its potential.

Lawrence Freeman looking at the GERD reservoir that holds 74 billion cubic meters of water

Horn Review: How might the electricity generated by the dam reshape rural economies and agribusiness within Ethiopia and the wider Horn of Africa region?

Lawrence Freeman: Ethiopia has already begun regional economic integration because electricity is now being exported to Djibouti, North Sudan, and Kenya. Before the end of the year, there will be transmission to Tanzania. Electricity from the dam is transported to Ethiopia’s grid and then through power lines to neighboring countries. Djibouti and Kenya want to increase imports of electicity. Ethiopia is already practicing regional integration with the African Free Trade Area. Ethiopia’s agricultural model, successful over five years, is something other countries should emulate. Development is the key to peace, security, raising living standards, and creativity. I have been coming here for 11 years and have seen impressive progress.

Horn Review: How do you assess the regional implications of Ethiopia’s agricultural and energy policies for neighboring countries such as Kenya, Sudan, Somalia, and Djibouti, especially in the context of transboundary water and food systems?

Lawrence Freeman: Water is a big issue in Africa. People think there’s always a danger of water wars, but there is a lot of water in Africa; the problem is it’s not always in the right place. We have to build appropriate canals and waterways to take water from where it is to where it’s needed. I saw this on some farms, where people are building waterways to bring water to crop areas. The Nile is the longest river in the world, but not the most voluminous. Ten countries in the Nile basin all use Nile water, which will not last forever. My view is we must move toward rapid nuclear-powered desalination to take salt out of Mediterranean seawater and build the equivalent of a second Nile. The idea of competition over the Nile is not the right way to look at it; it’s about development. Egyptians have adopted a British imperialist policy because Queen Victoria gave it to them in 1903; it’s their river. This is artificial. The first agreement was in 1929 between the British Sudan and Egypt, both under British control, which is British imperialism. The second agreement in 1959 was between Egypt and Sudan, no longer under British control, but with the same division of water. Ethiopia wasn’t at either conference. The water from the Blue Nile is not part of any agreement, but the colonial view is that they must have guarantees on the water from the Blue Nile. The dam has three mechanisms to maintain a continuous flow of water downstream, so downstream countries get a more regulated and concentrated flow from the reservoir.

Five of the thirteen waterways of the GERD that direct water from the reservoir to drive the turbines

Sudan is intimidated by Egypt, but it should align with Ethiopia they benefit from it. Egypt should give up this colonialist mentality. They never saw the Blue Nile basin as a development but as a water tank to be used in droughts to help Egyptian farmers. There is huge potential in the Blue Nile basin; three additional hydroelectric plants can be built. None would be as large as the GERD, but would add electricity. We are at the beginning of the process. The idea is to think in terms of development and countries working together for the development of the nations of the Nile. It’s a fate accompli; nothing can stop the dam, but a more enlightened mentality is needed.

This also relates to port access to the Red Sea, another important waterway. The 1993 agreement, after Eritrea separated, left the port of Assab, a natural port for Ethiopia, in southern Eritrea, but it’s not used. Eritreans can’t see the benefit of working with Ethiopia. Ethiopia’s economy is the biggest and fastest-growing in East Africa. Developing that port would bring revenue, commerce, trade, and millions of tons of freight. But antagonisms and shortsightedness prevent progress.

From a physical economist’s standpoint, a good leader must think 20 to 40 years ahead for future generations. It’s natural that an agreement on Assab would be worked out to fight poverty and hunger in the region. People don’t think this way. Hopefully, there will be a peaceful resolution for additional port access because Djibouti charges a lot for access. These are issues to be dealt with by thoughtful leaders for the benefit of their people to raise living standards. Once material standards rise and people live dignified lives, they can focus on developing creative minds. But you can’t get there without material existence.

Horn Review: In light of this, do you see viable frameworks for cooperation around the dam that could support regional food security and climate resilience, or are geopolitical tensions likely to overshadow such efforts?

Horn of Africa, which has huge potential for development (courtesy of hiiraan.com)

Lawrence Freeman: Much of what happens here is shaped by history. Ethiopia is the only country not conquered. I recently saw the museum that Prime Minister Abiy built, celebrating Adwa. My suggestion is that whatever day they inaugurate the dam, they add it as a national holiday, GERD Day, because it can unify the country. Unfortunately, there is a history involving British colonialism, Somalia, Italian colonialism, and Eritrea, which in various ways were manipulated. Somalia, and Somaliland were independent for about five or six days before forming the nation. Somaliland has been functioning almost independently for 30 years or more. This colonial legacy and antagonism prevent regional economic development.

Ethiopia, like all African countries, uses a tiny fraction of its arable land. There is potential for land and actual use of arable land, and an even tinier fraction is irrigated. Ethiopia has just started irrigation, which is excellent. This concept can be used in all African countries. One of my missions is to end poverty and hunger in Africa. Many still live in poverty with very low income per capita. This must change. You can’t do that unless you produce more wealth and put more people to work. The transformation plan and home-grown economic reform of the Prime Minister emphasize manufacturing.

Africa has been prevented from producing real manufacturing industries. Less than 3% of total manufactured goods in the world come from Africa. Ethiopia is working on light industry, leather, and adding value to agricultural products like coffee, the biggest export. Building up manufacturing, next to infrastructure, is an essential part of an economy.

The fundamental issue is that the constitution has to be changed. Everyone knows that, but you need a robust, maybe contentious, discussion, debate, and dialogue with the people of Ethiopia. You have to attack the notion of national ethnic identity, not ethnic culture, but ethnic identity. What must be reinforced is that Ethiopia is a nation-state and its people are citizens of a nation-state, not members of a national ethnicity. Ethnic nationalism is the enemy and is deeply ingrained. There is no congruence between ethnic nationalism and citizenship. People should not give up their rich history, but must see themselves as members of a nation.

Lawrence Freeman, studying the victorious Battle of Adwa that helped shape the identity of Ethiopia

Horn Review: That’s a profound idea. How should international partners engage with Ethiopia’s dual push for food self-sufficiency and energy leadership, given the sensitivity surrounding the dam and regional politics?

Lawrence Freeman: The international community doesn’t understand economic development or Ethiopia. There are many NGOs and international organizations, some being dismantled by the US, but they don’t focus on questions that would change society. If you want to improve life, bring democracy, and good governance, you must put electricity at the top of the list. Without electricity, people don’t develop. Good governance over poverty is meaningless. The West must change its thinking. Look at why Western leaders haven’t complimented Ethiopia on the GERD, the largest hydroelectric dam built without money from World Bank or IMF. Why haven’t presidents visited the GERD? The West is ideologically deficient and prejudiced against development, so they’re not good partners now. This will change because China is outproducing the US in many economic sectors, and the US is contracting its manufacturing base.

The West’s ideology is collapsing, and China and BRICS are growing. Ethiopia is one of three African countries in BRICS. The Global South is forming new political and economic relations based on a new paradigm of development and growth. Hopefully, enlightened leaders in Africa, Latin America, and others will recognize that the world is no longer fixed in a hierarchy. The West must change and recognize that Africa needs long-term, low-interest credit for infrastructure to build hydroelectric and nuclear power plants. Infrastructure itself may not make money, but it raises the economy’s profitability. We should unite with China to help African nations build infrastructure to eliminate poverty and hunger. The West should work with Africa in critical transformational areas.

Garment factory in Ethiopia. Many tens of thousands of Ethiopians employed in the garment industry

Horn Review: From a regional integration perspective, what role could Ethiopia’s emerging industrial base, especially agro-processing and light manufacturing, play in reshaping trade and economic interdependence in Africa?

Lawrence Freeman: Ethiopia’s major export is coffee, which can have added value. Ethiopia is self-sufficient in wheat and can start exporting wheat for foreign exchange. Africa wastes foreign exchange on buying agricultural products and importing food. Ethiopia is close to eliminating this system. Ethiopia has 165 million livestock, the largest in Africa, which supports the leather industry. Ethiopia plans to build steel plants. Ethiopia needs national industries like steel, aluminum, and cement to avoid buying from other countries on their terms.

The West controls the terms of trade. Producing your own goods increases revenue. Tourism is important, but service and tourism make up 40% of GDP, which is not ideal because service and tourism bring revenue but not wealth. Manufacturing, agriculture, and mining should be emphasized. Gold is a big revenue source now. Ethiopia should focus on industry. Ethiopia’s leaders understand this. I’ve worked with many African countries that don’t grasp this economic concept. Ethiopia understands this. There are problems, but progress exists. Maybe it’s not fast enough or comprehensive, but it’s a basis for optimism.

Use of mechanized agriculture improves productivity for Ethiopia’s farmers

Horn Review: Ethiopia is also investing heavily in urban infrastructure and industrial parks. How do you assess the role of urban development in facilitating structural transformation, labor mobility, and regional economic competitiveness?

Lawrence Freeman: I toured Addis Ababa with the mayor’s office and have watched the city change since 2014. It’s almost unrecognizable. Policies include clearing polluted rivers, new walkways, and tree planting. Trees are the best way to improve the environment. Trees are important because they absorb CO2 and produce oxygen. Photosynthesis changes climate through transpiration how much water comes up and down. To change deserts; plant trees. Ethiopia has planted 40 billion seedlings, with 10 billion more to go, which is very positive. People displaced from less developed areas along waterways have not been thrown out but resettled with housing, food, and small manufacturing plots like bakeries. This is positive.

The changes in Addis Ababa, farming, and manufacturing are slow but in the right direction. Ethiopia has 130 million people to employ, which is hard, but this is the direction. There are detractors of Prime Minister Abiy, but I follow his policies carefully. I don’t analyze every political nuance but look at substantial results, which are palatable. This should be encouraged and supported. Criticisms are fine if made in good faith to move the country forward. If you want to criticize, propose better policies. Otherwise, keep quiet and let economic development proceed.

Horn Review: Professor Freeman, we’ve had a very insightful discussion. You have enlightened us, and thank you once again for coming on our podcast. Lawrence Freeman: My pleasure. Happy to do it. (all emphasis added)

Read thye current issue of Horn Review below. My interview begins on page 8.

­͏Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for 35 years. He is a teacher, writer, public speaker, consultant on Africa, and an analyst of global strategic relations. Mr. Freeman strongly believes that economic development is an essential human right. He is the creator of the blog: lawrencefreemanafricaandtheworld.comalso publishes on: lawrencefreeman.substack.com, “Freeman’s Africa and the Worldand on X @lkfreemansafrica 

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