Ethiopian Prime Minister Abiy Ahmed is accepting the Nobel Peace Prize next week just as his country heads into what could be the most consequential year of its fraught political transition.

The 43-year-old reformer will be under enormous pressure to live up to the "Abiymania" hype that has faded somewhat since he took office last year.

General elections scheduled for May would take place amid economic uncertainty and rising ethnic violence.

The country's success or failure in holding a peaceful, credible vote will have major implications for the Horn of Africa region.

Where is Ethiopia coming from?

It has been a turbulent few years.

In late 2015 a plan to expand the administrative boundaries of the capital, Addis Ababa, triggered large-scale protests in the surrounding Oromia region.

The unrest snowballed into a broader anti-government movement that prompted a violent, often brutal response from state security forces.

Less than a year after the protests kicked off, then-prime minister Hailemariam Desalegn declared a state of emergency.

It was not enough to restore order, however, and Hailemariam abruptly resigned in February 2018.

Ethiopia's ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) coalition appointed Abiy as Hailemariam's replacement, charging him with overseeing a transition from authoritarian to democratic rule.

The beleaguered coalition was betting that the former spy boss -- and the country's first leader from the Oromo ethnic group, Ethiopia's largest -- could ensure its continued hold on power.

Why are upcoming elections so crucial?

The May 2020 elections will likely make or break Ethiopia's transition.

The country has not seen a competitive vote since 2005, which brought gains for the opposition.

The EPRDF has since reasserted control and currently holds all 547 parliamentary seats.

But Abiy's reforms, including lifting bans on political parties and freeing political prisoners, have set the stage for a contested campaign.

Abiy has recently pushed forward with transforming the EPRDF from a coalition into a single party, dubbed the Ethiopian Prosperity Party.

The controversial move, approved last month, has been rejected by the formerly dominant Tigrayan People's Liberation Front and criticised by Defence Minister Lemma Megersa, a key Abiy ally.

Analysts say Abiy hopes the merger will make EPRDF members more competitive at the ballot box as well as curtail rising ethno-nationalism.

But it's unclear whether Abiy can effectively manage the vote and -- if he gets a five-year term -- the birth of a more pluralistic political era.

"How do you loosen control without losing control? That's the big question. I don't think there's a recipe for how to do that," said Tobias Hagmann, an Ethiopia expert at Roskilde University in Denmark.

Can Abiy curb ethnic violence?

Ethnic violence has been a persistent problem under Abiy, and some analysts say the situation is so bad that holding elections in May could prove impossible.

Abiy's loosening of the reins has allowed longstanding tensions between ethnic groups to boil over, and Ethiopia recorded more displaced people than any other country in 2018.

The latest outbreak occurred in October after prominent Oromo activist Jawar Mohammed accused the government of trying to orchestrate an attack against him.

Anti-government protests devolved into ethnic clashes across Oromia that left 86 people dead.

Witnesses and victims said young Oromo nationalists targeted non-Oromos and, in some cases, fellow Oromos who opted not to participate in the violence.

Amnesty International warned that the episode could be "a premonition for mass atrocities".

What will it take to revive the economy?

Abiy clearly believes that breathing new life into Ethiopia's economy is crucial for his electoral prospects.

While Ethiopia is one of Africa's fastest-growing economies, high GDP rates have been largely fuelled by state spending, and officials now want to stimulate private sector growth.

Abiy unveiled a "Homegrown Economic Reform" plan earlier this year, describing it as "our bridge to prosperity".

The plan is intended to address problems like high inflation, foreign exchange shortages and current account deficits.

A major test will come when officials open the telecoms sector to foreign competition, a move expected next year.

What does Ethiopia's stability mean for the region?

Outside Ethiopia, Abiy has played a leading role in mediating Sudan's political crisis and has tried to revive South Sudan's moribund peace process.

And then there's his signature achievement to date: the outreach to Eritrean President Isaias Afwerki that led to the signing of a peace deal last year.

The Eritrea deal is a main reason Abiy won the Nobel, but it has been weakened by a lack of tangible progress on critical issues like border demarcation.

As elections approach, Abiy may be forced to pay less attention to foreign policy, including Eritrea.

"Eritrea is not a priority for Ethiopia at this time," Hagmann said. "Ethiopia has other concerns which have to do with domestic politics that are much more pressing."

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