• Ethiopia’s Afar region, especially around Lake Afdera, is the country’s main source of salt, accounting for 80 per cent of the national market. The salt sector in the region has been dominated by non-Afar investors from neighbouring regions—so-called ‘highlanders’ from the country’s political and economic centre—since extraction started in 1998, with the Afar playing only a marginal role.
• The marginal status of the Afar within the regional salt sector persists despite pledges by the region’s new political leadership since 2018 to address the situation. This has included redistributing salt-abundant lands to a cross-section of Afar society (elders, youths, veterans, businesses, etc.).
• As salt businesses affiliated with the Tigrayan People’s Liberation Front (TPLF) were expropriated by the new government when it came to power in 2018, a crop of newly politically advantaged business tycoons have sought to control the salt trade. Apart from some in the region’s new political leadership, Afar society still largely remains restricted to production, with profit margins fast decreasing.
• Currently, SVS Salt Production Plc (SVS) and its sister company TTR hold a monopoly over Afdera’s salt sector. This is one of the main reasons why the price of salt has increased dramatically in recent years and is also partly responsible for setbacks in Ethiopia’s iodization efforts – a centralized programme to reduce widespread iodine deficiency. However, the programme has inadvertently reinforced monopolistic practices by favouring big investors with political influence while excluding the Afar from the salt sector.
• The 2023 directive to regulate the salt value chain could further reinforce the current monopoly, especially an article in the new bill that restricts salt processing to the region where the resource is located and extracted. This could knock dozens of salt processing factories operating outside of the Afar region out of business.
• The status quo in the salt value chain has undermined regional governance and domestic accountability, with salt rents prompting the Afar regional leadership to cater to political and business elites in Addis Ababa, rather than bolstering its domestic constituency in Samara and the Afar region. Fragmentation among the regional political class has fuelled factionalism and discontent among Afar constituents, who lament that the transformational potential of the abundant salt found in the region has not been fulfilled.
• Achieving a more just, inclusive, and peaceful governance of Afdera’s salt requires federal and regional policymakers and producer associations involved in the sector to change course. This includes revising the salt bill to regulate monopolistic tendencies and ensure equal opportunities for salt producers, processors, and distributors along the value chain in a competitive market system – not just in the Afar region but across the country.
• There is a need to unlock the business potential of the salt sector whilst ensuring that it benefits Afar society economically. More generally, this calls for an agenda of political and economic inclusion of peoples from the periphery as the basis for political legitimacy of regional leaders and the central government.
Find the Amharic summary of this report here.
This report was written for the Ethiopia Peace Research Facility (PRF). The PRF is an independent facility combining timely analysis on peace and conflict from Ethiopian experts with support for conflict sensitive programming in the country. It is managed by the Rift Valley Institute and funded by the UK government. This report is part of PRF’s Knowledge for Peace (K4P) series on the Political Economy of Resources in Ethiopia’s Peripheries (PEREP), led by Jonah Wedekind.