Already failing Development Bank of Ethiopia strategies to successfully finance targeted Ethiopian business success are now crashing completely due to the Ethiopian, Eritrean, and Amhara forces destruction in millions of dollars of industrial projects which were 70% financed by the Development Bank of Ethiopia. Now these loans will never be paid and foreign investor interest has been severely discouraged.
The Development Bank of Ethiopia was created to be a mechanism to finance industries deemed vital to the economic development of Ethiopia because there was insufficient private or international alternatives. The Ethiopian Commerce Bank of Ethiopia which held 57% of deposits 18% of profits from private lenders was just not big enough to handle the load. The low interest rates paid by Ethiopian Commerce Bank were just too low to sustain financing for large projects.
Unfortunately over the past decade ongoing inflation and business failure of large projects in government targeted industries was creating a difficult situation to sustain the development bank. In 2020 just before the Ethiopian Tigray conflict began the Prime Minister of Ethiopia, Abiy Ahmed, began to take over policy determination of the Development Bank of Ethiopia. Despite this the number of distressed loans increased to one third of all projects. Under the PM the Ethiopian Investment Commission tried to help 485 troubled government targeted business ventures with additional cash disbursements and loan refinancing sometimes trying to encourage some help from the Ethiopian Commerce Bank but little improvement occurred.
As reported by the Tigray Interim Administration in February 2021 just in Tigray over 100 billion birr of destruction was done by the Ethiopian and Eritrean forces in the so-called law enforcement operation. Thousands of workers lost jobs and foreign investors had no choice but to abandon the projects financed to tens of millions of dollars through the Development Bank of Ethiopia when they saw the destruction and theft of equipment and materials to Eritrea.
Now with the complete destruction of cities and businesses along the highways extending north from Dessie in the Amhara region by poorly controlled carpet bombing and artillery of the Ethiopian forces even more hundreds of millions of dollars in outstanding loans will default to the Development Bank of Ethiopia likely resulting in its collapse.
Abiy Ahmed and Esaias Afwerki beserk destruction destroyed thousands of workers lives, millions in foreign investment, and cancelled the future repayment of millions of dollars in loans made by the Development Bank of Ethiopia to foreign investors in Tigray. The false message of liberation of the Tigray from the TPLF by Abiy Ahmed’s genocide which continues today was countered by some like Abera Niguse in the interim administration of occupation. Now with carpet bombardment of Amhara killing thousands of civilians and businesses, the Abiy Ahmed war machine continues the same in Amhara.
The false message of liberation of the Tigray from the TPLF by Abiy Ahmed’s genocide which continues today was countered by some like Abera Niguse in the interim administration of occupation. Niguse appointed as Head of the Bureau of Justice for the Tigray Interim Administration during the Ethiopian occupation complained in February 2021 that the destruction of factories and businesses in Tigray was illegal. He noted that the procedure undertaken was a “law enforcement operation” that should not have constituted mass destruction in a radio broadcast on FM 104.4 in Mekelle. The damage done would require an investment of over 100 billion birr to repair he stated. Essentially every factory and business including pharmaceuticals, construction, mining, truck and agricultural equipment manufacturing, garments, steel, poultry, farming, cement production, etc. was destroyed.
I was involved in trying to help Velocity, an Indian and Dubai based garment company in Mekelle which also produced oxygen for industrial use, be allowed to produce medical oxygen but instead Eritreans were allowed to destroy the factory and take components to Asmara. The Velocity investment in Mekelle was $26 million dollars with a 70% loan from the Development Bank of Ethiopia. Now thanks to Abiy Ahmed’s destructive mania thousands lost jobs and loans outstanding to the Development Bank of Ethiopia will never be paid. This is just one example of many examples of how Abiy Ahmed’s will ultimately help break the economy of Ethiopia.
Niguse complained “This is not about getting rid of TPLF or capturing some clique. This war had no discipline. It has created insurmountable social and economical issues for the foreseeable future for the people of Tigray. It has caused serious insecurity in the region. Tigrayans are abused and suffering. Churches are burning. Women and young girls are being raped. Improper house checks and raids. All types of machinery, cars and many other properties of Tigray have been looted and taken out of the country’s border, some are taken to central Ethiopia”.