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The Ethiopian civil war that destroyed Tigray’s economy
16 April, 2022by Ethiopia Insight
Abiy, Amhara elites, and Isaias were keen on reducing Tigray’s economic power in their military misadventure.
Sixteen months into the conflict in northern Ethiopia, Tigray lies in ruins. Almost every aspect of the region’s social, cultural, economic, and infrastructural assets has been damaged.
After federal forces retreated from the regional capital in July 2021, Prime Minister Abiy Ahmed indicated that the so-called “law-enforcement operation” was designed to reduce Tigray’s power by diminishing Mekelle’s economic stature.
He stated: “It [Mekelle] is not at this time any different from Abiy-Adi, Sheraro, or Beshasha. It is no longer a center with any power as it now stands…Based on the reality now, when it is seen militarily, it has nothing. There is nothing that makes it a center or which makes it appealing to us, as it was when we first went there.”
This quote seemingly implies that a reduction of Tigray’s economic power was a core objective of the federal government’s military intervention.
Even before the conflict between the federal and Tigray governments, de facto economic sanctions had already been imposed on Tigray.
Since 2018, roads to the region through Amhara were blocked by locals and Fano militias. When considering the fact that Amhara and pan-Ethiopian media had been calling for it, the claim that unruly locals were responsible doesn’t hold water.
Although neither the federal nor Amhara governments sanctioned the embargo, the fact that they never condemned it, let alone resolved it, implied that they were complicit. Consequently, for more than a year and a half before the war, the only consistently open route to Tigray was through Afar.
As federal-regional tensions escalated, the former started enacting more constraints.
For instance, in December 2019, a Chinese business delegation from Shanxi province, which had sought to travel to Tigray, was denied permission by federal authorities.
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Even more resolute actions aimed at economically crippling Tigray were taken after its government carried out a regional election in contravention of federal authority.
In mid-October 2020, Tigray’s government accused Addis Abeba of obstructing efforts to control the locust infestation in the region.
At that time, the de facto siege preventing access to food and other commodities was further consolidated. More importantly, the House of Federation (HoF) announced plans to end federal budget subsidy for Tigray’s executive and instead decided to directly fund wereda and kebele adminstrations. Even funds allocated for social welfare were not spared as the federal government suspended a donor-funded safety net program.
On 4 November 2020, the Ethiopian government announced a military offensive in response to attempts by Tigray’s government and Tigrayan military officers to neutralize the powerful Northern Command of the Ethiopian army in Tigray. After three weeks, Tigray’s forces were driven into the mountains of central Tigray and Ethiopian forces took control of Mekelle.
Although some of the major business institutions, like Welkait Sugar Factory and Tekeze Dam, were damaged as the result of air raids during the three weeks of conventional war, most infrastructure destruction took place after Mekelle was captured.
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Among other acts of vandalism, reports of Ethiopian and Eritrean forces looting and destroying major factories in the region emerged soon after Abiy announced the end of military operations in Tigray.
For instance, Goda Bottle and Glass Share Company were destroyed on 2 December, a week after the capture of Mekelle.
Addis Pharmaceutical Factory, which previously covered 70 percent of national demand, was looted and destroyed on 19 December. What’s more, the Eritrean and Ethiopian forces responsible for the looting killed 16 civilians who tried to stop them.
By the end of December, the looting and destruction of Almeda Textile Factory on 26 December at the hands of Eritrean soldiers was confirmed. Heavy trucks belonging to Mesobo Cement Factory were also reportedly taken outside of Tigray, several of which were spotted in Addis Abeba.
Similarly, 179 trucks owned by Trans Ethiopia P.L.C. were handed over to the Ethiopian government after a prolonged standoff with drivers who were determined not to relinquish them.
According to Tigrayan sources, Eritrean and Amhara fighters looted nearly all businesses and shops located in central Tigray, particularly in Hawzen, Tembien, Wukro, Agbe, and Abiy Addi.
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By late February, almost all factories in central and eastern Tigray were destroyed and rendered useless. According to a source in the interim administration, it would require at least 100 billion birr to re-establish them.
The education sector also suffered extensive looting and destruction. Axum and Adigrat Universities were reportedly raided and vandalized by Eritrean forces, while Mekelle University suffered partial looting. Destroyed institutions also included privately owned colleges and high schools, including primary and secondary schools in Raya, Selekhlekha, and Sheraro.
As the counter-insurgency operations by Ethiopian and Eritrean forces expanded, so did the pillaging.
A Médecins Sans Frontières assessment in March 2021 of healthcare facilities in Tigray found that around 70 percent were looted and 30 percent had been damaged. A more recent assessment made by Mekelle University revealed that more than 70 percent of healthcare facilities were damaged to some degree.
Hospitals in Adwa and Abiy Addi were destroyed, while those in Axum, Adigrat, Fasti, Freweyni, and Hawzen were raided. The long list of destroyed and vandalized health facilities includes Fredashum Health Post, Jira Health Care Unit, and Adiftaw Health Post.
In addition, almost all ambulances found in eastern, central, and north-western zones were taken to Eritrea or Amhara.
The economic warfare also impacted Tigrayans outside of Tigray. A wide variety of coercive mechanisms were used to attack Tigrayan businesses in the rest of Ethiopia.
Back in May 2021, a notice released by the Amhara region’s Bureau of Rural Land Administration and Use (BORLAU) invited Amhara investors to lease the vast agricultural land in Welkait Tsegede and Setit Humera zones. These districts of Western Tigray Zone have not been legally transferred by the federal government to Amhara’s administration.
Moreover, due process was not followed in seizing the lands from previous Tigrayan owners. As such, this represents a blatant example of extrajudicial expropriation.
Legal processes were also abused at times to force Tigrayan businessmen to relinquish their assets. The federal government froze assets, denied permits, withheld payments, and detained owners. These measures drove several Tigrayan companies to shut down.
For instance, Edna Mall, one of Ethiopia’s biggest, was foreclosed on the grounds that its Tigrayan owner was unable to repay a loan he took from the Commercial Bank of Ethiopia. Sources say that this is not an isolated incident but rather one of many such quasi-legal schemes through which Tigrayans are being systematically stripped of their assets.
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Following the withdrawal of the federal army in July 2021 from most of central and eastern Tigray, severe retaliatory measures were taken on Tigrayan businesses.
Harmony and Kaleb hotels, found in Bole Sub City of Addis Abeba, were among the large number of businesses authorities closed on the grounds that they “played music that could stir up emotional backlash and violence.”
Later that month, a major crackdown on ethnic Tigrayans took place all over the country. Thousands were arrested in Addis Abeba, while the city police took measures on businesses that it said had connections with the Tigray People’s Liberation Front (TPLF). Even coffee shops and restaurants owned by Tigrayans were not spared.
Sources also revealed that the detention of Tigrayans and the closing of their businesses created a hub for extortion by law-enforcement officials, as many Tigrayan businessmen were extorted with either the threat of detention or in exchange for their freedom.
Another report in August 2021 claimed that, in Addis Abeba alone, the government closed more than 1,600 businesses, including hotels, buildings, warehouses, investment farms, factories, and real estate companies. In addition, bank accounts issued by Tigray branches of all banks were temporarily suspended by government orders.
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At the beginning of September 2021, the Ministry of Trade and Industry announced that it had taken action on more than 80,641 businesses for attempting to “reverse the success of the law enforcement campaign.”
Sources stated that most of these businesses were owned by Tigrayans and a large proportion of them were small and medium sized enterprises. These actions were considered to be an extension of the law enforcement operation in Tigray. Such measures taken against Tigrayans and their businesses became bolder after Tigrayan forces advanced deep into Amhara.
Isaias Afwerki’s Eritrean regime participated gleefully as it set out to erase the political foundation of Tigray nationalism, a process Isaias christened “political cleansing”. Thus, the systematic destruction and looting of Tigray’s economic foundation, as well as the undermining of Tigrayan business elites, was considered an integral aspect of the war on Tigray.
In addition, as has been widely reported, nearly all conceivable kinds of war crimes were committed in Tigray, including the enactment of a medieval siege.
The collective outcome was devastating. The social apathy and ostracism of Tigrayans by the Ethiopian public was no less hurtful. Many Ethiopian media, institutions, and individuals ignored, justified, or downplayed the level of destruction and suffering.
These events raise questions over how such levels of apathy, resentment, and outright hostility came to prevail amongst Ethiopianist elites and their social base.
Following the establishment of the multinational federation in 1995 by the TPLF-dominated Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), Tigray, which had hitherto been an arena of civil war for the better part of two decades, grew rapidly.
Moreover, taking advantage of the newly introduced market economy, a disproportionately large number of Tigrayan businessmen emerged in Ethiopia’s business elite.
This caused exaggerated claims to proliferate. Many alleged that the eye-catching economic success of some Tigrayans was explained by various illicit activities and preferential treatment owing to TPLF’s dominance.
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EPRDF supporters have long acknowledged the undesirable yet apparent dominance of Tigrayans in the economy. However, they saw this as an unfortunate outgrowth of TPLF’s disproportionate role in the course of building the federation.
There is, indeed, some foundation to such claims.
The overwhelming majority of EPRDF fighters who fought against the Derg were Tigrayans, and, after victory, they naturally formed the core of a revamped national army. Similarly, largely by virtue of TPLF’s power, the most influential politicians were Tigrayans.
While this obviously caused displeasure amongst the rest of the population, it can nonetheless be seen as an organic outcome of TPLF’s disproportionate role in building post-1991 Ethiopia.
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Towards the end of the 20th century, the EPRDF government recognized the dangers of the imbalance in ethnic composition in the military and government. Consequently, a significant portion of Tigrayan officers were discharged to make way for officers from other ethnic groups.
After 2005, EPRDF reforms also involved measures to empower a new generation of leaders in the course of which many influential non-Tigrayan individuals came to the fore.
However, the economic imbalances were not fully rectified. Meager reforms came late, failed to address all aspects, and were not implemented with sufficient depth to alter public opinion.
Many key military and political positions remained in Tigrayan hands. Similarly, a tight-knit network of businessmen, many of them Tigrayans, dominated key sectors.
Partly due to EPRDF’s sluggish efforts to create a proportional ethnic representation, there was a vigorous resurgence of Ethiopian nationalism characterized by strong anti-Tigrayan rhetoric. The most extreme and potent discourse was the campaign spearheaded by ESAT, a diaspora-run satellite channel.
ESAT, which had strong connections with Ginbot 7 and other militant pan-Ethiopianist movements, was accused of intentionally blurring the line between the TPLF and Tigrayans.
The most infamous incident was when ESAT commentator Messay Mekonnen called for all Ethiopians, especially the Amhara, to rise up against Tigrayans. “This mission of destruction has been planned by five million people for 95 million people… There is only one way to get rid of spoiled fish from the sea – to get rid of the water of the sea,” he read.
Such messages called for total war on the people of Tigrayas a strategy to root out the TPLF.
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The underlying thinking in this and other such inflammatory rhetoric by pan-Ethiopianists is that most Tigrayans are direct economic beneficiaries of TPLF’s schemes.
One narrative claimed TPLF had systematically looted the country’s wealth and piled it in Tigray. Every successful Tigrayan businessman was portrayed as corrupt; all Tigrayan businesses both in Tigray and the rest of Ethiopia were presented as having been built at the expense of the Ethiopian public.
Such inflamed rhetoric inevitably came with demands for military action on Tigray. As early as 2018, calls were being made in public to invade Tigray and “bring back” the supposed wealth that was allegedly stored in the region.
ESAT-propelled propaganda centered its attacks on the Endowment Fund for the Rehabilitation of Tigray (EFFORT), a Tigrayan umbrella conglomerate for a group of businesses involved in industrial activities that was formed from assets seized in the 1980s during the war.
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After its inception in 1995, EFFORT’s net worth reportedly grew from an initial capital of around $100 million to an astounding $3 billion over three decades. TPLF argued that EFFORT was an endowment fund to rehabilitate Tigray from the devastation it experienced as the result of the decades-long civil war and famine.
Ginbot 7 and affiliated media portrayed the EFFORT companies as unjustly benefitting Tigray at the expense of the rest of Ethiopia. The companies were presented as being exclusively engaged in illicitly and systematically expropriating wealth from all over Ethiopia and channeling it to Tigray. This was supposedly so that when Tigrayans had taken enough, they would declare secession.
Other propaganda narratives held that few TPLF elites alone were benefitting from the companies. Here, the majority of Tigrayans were portrayed as being made to unjustly bear the burden of accusations while suffering under the yoke of the TPLF-led regime.
Contrary to these claims, TPLF sources argued that the initial funds for starting the companies under EFFORT were obtained from liquidated assets of the TPLF that it had accumulated long before it assumed power.
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However, opponents of TPLF successfully leveraged EFFORT’s allegedly obscure finances to paint it as a parasitic business empire bleeding Ethiopia dry.
As political tensions escalated, the distinction between TPLF and Tigrayans in opposition media was increasingly blurred. Hence, for Ethiopian and Amhara nationalists, the emergence of privately and collectively owned Tigrayan companies was seen as evidence of ill-gotten wealth.
At least officially, Abiy initially displayed a courteous attitude towards Tigrayan businesses. Moreover, on a number of occasions, he argued against the prevalent claim that Tigray took more than its share of the economic pie.
However, as the relations between his newly minted Prosperity Party and the TPLF became increasingly tenuous in 2020, pro-government media outlets intensified the divisive claims of Tigrayan parasitism and TPLF-led embezzlement of Ethiopia’s resources.
Following the December 2021 retreat of Tigray’s forces, it appears that measures being taken by authorities against Tigrayans outside of Tigray have decreased. Some Tigrayan-owned businesses that were shut down are allowed to reopen, including ten hotels in Addis Abeba.
But, among other matters, the fate of various Tigrayan businesses outside of Tigray and that of Tigrayan landowners whose lands in Western Tigray have been appropriated without due process remains unknown.
In Tigray, as the siege continues, the situation remains unchanged. Although around a dozen aid convoys arrived in Mekelle in early April, it is a trivial effort considering 90 percent of the population is in urgent need of assistance. In fact, due to the collapse of critical infrastructures such as education and health, further deterioration is possible.
Unfortunately, even if a cessation of hostilities and political negotiations take place soon, the extent of damage on Tigray’s infrastructure, economy, and the population’s sources of sustenance is so catastrophic that a full recovery appears impossible any time soon.
When also taking into consideration the increasingly battered Ethiopian economy, it appears that rehabilitating Tigray’s economy will take many decades.
At any rate, to the extent that what Abiy has said about the goal of the military operation is true, the federal government, Amhara nationalist elites, and Isaias’s regime can say it was a success.