Ethiopia Army Plans Further Strikes in Restive Tigray Region

Ethiopia prepared for a second day of clashes in the restive Tigray region as the United Nations and the U.S. urged the two sides to step back from a conflict that risks erupting into a full-blown civil war.

The military clashed with forces loyal to the Tigray People’s Liberation Front in three areas on Wednesday and more operations are planned in the coming days, Prime Minister Abiy Ahmed said in a televised addressed. The Ethiopian Human Rights Commission urged lawmakers who are meeting Thursday to approve a state of emergency in Tigray to ensure humanitarian access to the region.

“The commission is gravely concerned and closely monitoring the fast-developing security situation in Tigray and other parts of the country,” it said in a statement. “EHRC urges both federal and regional security forces to ensure the safety and security of civilians.”

There was no immediate word on the number of casualties in the conflict, which erupted on Wednesday after Abiy accused the TPLF of orchestrating a raid on a federal army camp. Relations between the national and regional governments have deteriorated since Abiy took office in 2018 and sidelined the TPLF, once the pre-eminent power broker in Ethiopia.

The fighting has unnerved investors. Yields on Ethiopia’s Eurobonds due 2024 jumped 18 basis points to 7.07% in London on Thursday, the highest since June 15, according to data compiled by Bloomberg.

“The fighting will test Ethiopia’s relations with its major creditors, China and the World Bank, at a time when it’s struggling to service its external debt,” Mark Bohlund, senior credit research analyst at REDD Intelligence, said in an emailed research note.

Negotiations with China for a debt-service moratorium, potentially deferring $2.1 billion in payments in 2020-23 may be at risk, while $2.2 billion that’s projected to be disbursed by the World Bank in 2021-23 may also be in jeopardy, Bohlund said.

United Nations Secretary-General Antonio Guterres and the U.S. urged both sides to de-escalate tensions.

“We are saddened by the tragic loss of life and urge immediate action to restore the peace,” the State Department said in a statement on its website.

©2020 Bloomberg L.P.

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