Nine months after Ethiopia’s new prime minister, Abiy Ahmed, assumed power, the country remains in flux and the trajectory of its transition uncertain. Long-simmering ethnic grievances have been compounded by elite disagreements about a range of issues, including the proper balance of power between the centre and regional states and how – or whether – to reform a state-dominated economy. The grievances are coming to a boil, threatening the country’s stability and perhaps even its unity. Crisis Group has monitored Ethiopia closely since 2009, when it warned that “despite continued economic growth and promised democratisation, there is growing discontent with the EPRDF’s ethnically defined state and rigid grip on power and fears of continued interethnic conflict”. Since then, and particularly after 2014, the country has become still more restive partly because political liberalisation – in a setting where authorities previously governed with a strong hand – has freed the population to object to perceived wrongs, sometimes in ways that have fed violence. This report analyses how Prime Minister Abiy came to power in April 2018, the resultant opportunities and dangers, and the principal dilemmas that Abiy’s team confronts. His election generated great hopes and expectations, but while he has had some impressive successes, his government faces enormous challenges, and has thus far been unable to implement detailed policies. The report is based on interviews and correspondence with actors in the ruling party, the security sector, and the internal and external opposition, as well as intellectuals, activists and people from all walks of life in various parts of the country. Most requested that their identity not be revealed. Fieldwork was supplemented by interviews with other long-time observers of Ethiopia and the Horn of Africa, in addition to secondary sources.