A committee under the Office of the Prime Minister tasked with finding solutions to manufacturing industries battered by the war in Tigray has little to show for its efforts as investors in the region brace themselves to face the December deadline for an 18-month grace period on bank credit repayments.
Berhe Arkebe, secretary-general of the Mekelle Chamber of Commerce and Sectoral Associations, told The Reporter that repeated calls for debt relief have fallen on deaf ears, leaving business owners in the region in a precarious position.
“Investors facing the December deadline are traumatized and tense as they see no end to this crisis,” Berhe said. “Our understanding of the NBE’s leeway on the debt is as if it told us to ‘go and die together’.”
Members of the business community had requested the federal government to facilitate debt forgiveness shortly after the committee under the PMO was established in early 2023. The Tigray Interim Administration (TIA) had also placed similar requests with the central bank, the Office of the Prime Minister, the Ministry of Industry, and the Ethiopian Investment Commission at around the same time.
The calls centered around forgiveness for up to three years’ worth of interest accrued on loans taken prior to the war as well as the extension of the central bank’s 18-month grace period set to end in a few weeks. Investors also want to see commercial banks avail new loans to get businesses in Tigray back on their feet
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“An extension for the grace period was requested almost a year ago, when borrowers in Tigray owed a combined 60 billion birr,” said Berhe. “This figure has jumped by 10 billion birr now.”
Pleas filed with the Ministry of Finance have also yielded no results.
Berhe characterizes granting a grace period without availing fresh loans with low interest rates as an “act committed to save face.”
“For manufacturing industries either partially or fully destroyed, postponing due dates for payments without access to new financing means nothing. How are they supposed to raise the funds without reviving their businesses?” he asked.
Berhe accuses the central bank and the federal government of sitting idly by while businesses in Tigray struggle to recover.
The Chamber he leads, along with the Tigray Genocide Inquiry Commission, are conducting the analysis of two research studies concerning the region’s finances as well as the damages incurred by the private sector during the war and the losses they face as a result.
Berhe told The Reporter he expects the studies to be presented to the federal government and the interim administration within the coming two months.
Several business organizations based in Tigray have also taken it upon themselves to conduct their own damage and loss assessments.
Among them is Desta Business Group, which operated 10 subsidiaries across Tigray prior to the war. It was involved in horticulture, edible oil, agricultural input and service supply, as well as oilseed exports, bringing in up to 60 million birr a year in revenues prior to the war, according to its self-assessment.
However, the Group is left with just one of its subsidiaries now, and its assessment indicates losses of close to USD 57 million during the war.
Berhe says businesses like the Desta Group had little to do with creating the predicament they now face.
“The entire thing is like as they say: ‘When elephants fight, the grass gets trampled’,” he said.
The Chamber wants to see the federal government uphold its duties in reviving Tigray’s economy, noting that it had ordered bank accounts belonging to ethnic Tigrayans blocked during the war.
“Forcing us to repay interest accumulated at a time we had no access to our accounts is illegal. The government should recognize that,” said Berhe.
He and his team are hoping the results of the studies being conducted will be more successful in swaying the federal government and the TIA to come up with a practical political-economic solution for the issues facing businesses in Tigray.
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