By Benadeta Mwaura - Reporter
Ethiopia, 5 December 2025 - The conglomerate representing businesses from the war-torn region — the Tigray Endowment Fund for the Rehabilitation of Tigray (EFFORT) — has publicly urged the Ethiopian federal government to reverse a sweeping directive that froze the bank accounts of all companies under its umbrella.
The move, the organisation warns, threatens to derail post-war reconstruction, deepen economic hardship, and compromise thousands of livelihoods.
According to reports, the freezing order, issued effectively on 3 December 2025, impacted all member companies of EFFORT without prior investigation or individual review.
The Board of Directors described the directive as carried out “in bulk” and labelled it illegal.
“This action will undermine efforts to recover from the damage caused by the war,” the statement said, while warning that tens of thousands of employees stand to lose their jobs.
Why Authorities Say They Did It
The broader freeze forms part of a wider crackdown by Ethiopian authorities targeting companies alleged to have links to the war coalition in Tigray.
In recent months, the government froze accounts of dozens of firms it accused of financing the former regional administration and “the Junta”.
Official statements list companies from diverse sectors — construction, manufacturing, mining, transport, textiles and trade — saying they were complicit in supporting the regional armed group.
According to the Ethiopian Government, the freeze is justified under the broader push against forex- and finance-related abuses.
In 2025 alone, regulators have conducted sweeping freezes of individual and corporate accounts tied to alleged illicit currency trading or unlicensed remittance operations.
But critics argue that the freeze of EFFORT’s accounts goes beyond forex concerns, hitting wholesale almost all businesses associated with a Tigray-affiliated conglomerate, including those already participating in rehabilitation and reconstruction.
The Human Cost: Business Collapse, Job Loss, Economic Setback
The freeze hits at a fragile moment.
Many firms under EFFORT are already struggling from war-time destruction and repeated disruptions described in earlier investigations.
A 2024 report detailed how dozens of major factories and industries in Tigray — textile mills, cement plants, mining firms, construction companies — suffered complete or near-total destruction during the conflict.
Business leaders recount mounting debts, looted inventories, and physical destruction, claiming the war left them bankrupt, yet banks now demand loan repayments with crippling interest rates even before their accounts were frozen.
With accounts frozen, companies cannot pay workers, order materials, or resume operations.
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For workers, many of whom survived years of displacement, food insecurity and instability, the freeze could mean sudden unemployment and renewed economic hardship.
Legal, Economic and Ethical Questions
EFFORT’s board argues the sweeping freeze was carried out without due process, without individual investigations or evidence presented to each affected firm.
They say “bulk suspension” violates basic rights, risks undoing reconstruction gains, and undermines the fragile peace the region is trying to build.
Observers warn that uncoordinated financial crackdowns may discourage investment, destroy small and medium businesses, and lead to mass unemployment, exacerbating humanitarian needs rather than resolving them.
At the same time, authorities defend the freeze as part of broader anti-money-laundering and anti-illicit-finance measures.
“Ethiopia’s central bank and financial-intelligence regulators have recently intensified oversight of third-party accounts, informal forex trades, and unlicensed money-transfer networks.”
The tension between restoring financial integrity and protecting economic recovery is particularly acute in Tigray, where reconstruction and rehabilitation depend heavily on local businesses reviving, jobs returning and capital flowing back into the economy.
What EFFORT, Government and Observers Should Do
Many expect that EFFORT will push for an urgent reversal of the freeze or at least a case-by-case review of every affected company’s account.
Without swift action, the freeze may become a de facto strangulation of Tigray’s recovery.
Civil society organisations and international observers have often called for transparent investigations, due-process guarantees and protection of economic rights, especially during post-conflict transitions.
Lessons from similar freezes of civil-society organisations in Ethiopia suggest that prolonged account suspensions often lead to permanent closure, job losses and shrinking civic space.
There are also calls for the government to couple any crackdown with clear communication, legal review, and a roadmap for supporting small and medium enterprises, especially businesses trying to rebuild after war.
For the people of Tigray, and for Ethiopia’s fragile economic recovery more broadly, this isn’t just about accounts and cash flows.
It’s about livelihoods, dignity, and the fragile path from conflict to peace.
