Tigray Businesses Face Crunch As Ethiopia Loan Grace Period Ends

By Dawan Africa - Reporter

Ethiopia, 18 December 2025 — The business community in Ethiopia’s Tigray region is facing mounting pressure as an 18-month grace period on bank loans nears its end, coinciding with the implementation of new tax obligations.

The situation has raised fears of widespread business distress in a region still recovering from the impacts of war.

Business owners have warned that asset seizures, the accumulation of loan interest, and stricter tax enforcement could force a large number of companies to shut down. They are calling for urgent relief measures, including temporary flexibility in loan repayments and tax collection.

These concerns were raised during a forum dedicated to discussing bank loans and recent amendments to the income tax law. The meeting was attended by the head of Tigray’s Interim Regional Administration, Tadesse Werede, along with senior regional officials, according to local media reports.

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The interim administration acknowledged the growing pressure on the private sector and said it intends to hold consultations with the federal government to prevent asset seizures and seek transitional arrangements that would ease loan and tax obligations.

Participants also noted that the fragile state of businesses, coupled with strained relations between the Tigray People’s Liberation Front (TPLF) and the federal government, continues to hinder progress in addressing the crisis.

Meanwhile, Deputy Head of the Interim Administration, Amanuel Assefa, said contacts are underway with the federal government to prevent the auctioning of business assets in Tigray, after many entrepreneurs were unable to repay loans accumulated during and after the war.

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