Saturday, September 23, 2023
NewsTigray pleads for debt relief, incentives to resurrect war-torn economy

Tigray pleads for debt relief, incentives to resurrect war-torn economy

Desperate for relief after the ravages of war, authorities in Tigray have appealed for debt forgiveness and restructuring for companies crippled by Ethiopia’s conflict in the north, as they seek financial support from the federal government to help rebuild investments devastated during the fighting.

In a letter to Ethiopia’s Investment Commission (EIC), the Tigray Interim Administration’s Investment Commission has requested compensation for damaged investments, debt cancellation, tax exemptions, rent waivers and other incentives like import duty waivers.

The Commission also asked for the cancellation of demurrage costs and priority in the allocation of foreign currencies.

The letter called for establishing a joint committee to oversee implementation of the proposed measures. It also urged inviting foreign investors with interests in Tigray to resume activities now that peace prevails.

Getachew Reda, president of Tigray Interim Administration, separately wrote to the central bank requesting loan cancellation or extensions for Tigray investors. Daniel Asefa, Tigray investment commissioner, said: “Banks are demanding investors pay all loans with high interest. Some are trying to auction properties.”

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Daniel said there were 13,000 investment licenses before the war but 95 percent were damaged. His commission has also requested the Ministry of Finance to reinstate tax concessions and duty-free imports for vehicles that were recently suspended.

Daniel argued: “Tigray investors cannot compete without support. Investments are completely damaged and need a full recovery package.”

The government said total war damage is USD 26 billion but Daniel refuted that figure, saying “They never consulted us or assessed Tigray.”

Daniel said Tigray investors with farms in Gambella and Benishangul also lost everything and deserve compensation.

This week, the government launched a recovery program for North Ethiopia as part of an effort to persuade donors contribute to the initiative.

The launch ceremony was held at Hayatt Regency last Monday, with authorities announcing the need for USD 5.1 billion for the first phase of the program that will be implemented in six regions, including Tigray, for the next 12 months.

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