Ethiopia’s estimated damages and losses in one year from November 2020 to December 2021 due to conflicts in 6 regions stands at 28.7billion dollars.
In a recent study that was launched on Monday June 12, 2023, courtesy of a collaboration done by the government, World Bank and development partners, a comprehensive assessment has been deduced on the inventory of damage losses resulting from the several conflicts across the country.
In light of this the government has launched a five year recovery and reconstruction programme to be implemented in the coming five years in the presence of regional leaders, high level government officials and representatives of international development partners.
The document which was based on data collected from federal and regional authorities, development partner organizations, civil society organizations and the private sector, calculated damages and losses from November 2020 to December 2021.
The estimation showed that the country incurred a damage and economic loss amounting to 28.7 billion USD. As the country now vows to move forward from these catastrophic ordeals, the bounce back recovery as set by government is now projected to amount to 19.9 billion dollars within the next five years at an annual recovery and reconstruction budget of 3.9 billion dollars.

The conflict in Ethiopia in the past two year has been of an unprecedented scale. The war in the Tigray region with expansion in Amhara and Afar region, and with old conflicts having also emerged in Benishangul-Gumuz, in Oromia and in Konso South Nationalities and Peoples Region, have paralyzed the country. As the document indicated, around 2.2 million people have been displaced and over 20 million people are reliant on human assistance.
As the document cited, “The conflict has significantly affected the economy and has resulted in worsening the macroeconomic imbalance. Economic loss amounted to 2.2 percent of the GDP in 2020/21 and the damage to properties and infrastructure is estimated to be equivalent to 20.4 percent of GDP between November 2020 and December 2021. Furthermore, the conflict has exacerbated the already high inflationary pressure on the economy through supply chain disruption and by fueling speculation about the future inflation.”
The damage and losses to health, education, social security, housing and cultural heritage were estimated at 6.29 billion dollars, while damage on the production sector, amounted to 19.08 billion dollars. Similarly, the damage to the infrastructure sector took a hit of an estimated 2.4 billion dollars, while the damage to the administration, environmental protection and disaster management was estimated to be 902 million dollars.
The document suggested that the economy needs prudent monetary and fiscal policies to guide the expenditure needs for recovery and reconstruction while ensuring that inflationary pressure on the economy remain contained.
Recovery and reconstruction needs were assessed for a five year period and organized in three categories; immediate, short term and long term to be applied on the six conflict affected areas.
It has been stated that 5.1 billion dollars will be needed in the first year of the recovery period, and 9.8 billion dollars will be needed in the second and third years of the recovery program. The survey shows that 4.6 billion dollar is needed for the final phase of the program.
It has been stated that the government will cover some of the expenses by keeping the revenue budget, but it is planned that partner organizations and donors will help with most of it.
“Apart from the humanitarian assistance, the government has appropriated the required budget and is working with commitment to achieve the recovery and reconstruction plan. We are also calling upon international partners to contribute their part for the success of the programme,” said Ahmed Shide, Minister of Finance whilst speaking on the launching event

The one and only mortgage bank in Ethiopia, Goh Betoch Bank (GBB), tables its policy recommendations to the central bank, National Bank of Ethiopia (NBE), for an introduction of a housing fund in the country.
The housing fund which has a primary motive of mobilizing funds like pension and provident funds to support the housing scheme at suitable rates, whilst also offering a better alternative for residents, despite being a new notion to the country is popular among the region and developed countries.
For instance, in Nigeria, the National Housing Fund (NHF) allows a contributor to access a loan for the building, purchasing, or a renovation loan for residential accommodation, among other benefits. A contributor enjoys benefits from the National Fund scheme including: low-interest rates for housing loans, and reduced tax liability because contributions to the NHF are tax-deductible.
In Kenya, a similar body, National Housing Development Fund was formed in 2018 with an objective of raising funds from various sources in an initiative aimed at providing affordable housing. The Kenyan Fund is now providing long-term financing to primary mortgage lenders such as banks, microfinance institutions, and SACCOs at low and fixed interest rates.
In Ethiopia, however, the initiative and ownership is expected to be handled by the government and similar to other countries, the mortgage bank, GBB has initiated the idea for the financial sector regulatory body to come up with the initiative as an alternative source of fund for the housing projects in the country.
“It shall be established and operated by the government like pension funds as a public institution but with a purpose to construct houses,” Mulugeta Asmare, President of GBB, clarified adding, “Such kind of funds may not happen overnight but the government should take the initiation to embark on the same.”
As Mulugeta further elaborated, the fund will provide loans for financial firms or real estate developers.
“We have tabled our proposal to NBE but it may not be the right body for that. We believe that the fund will be formed through one of the government bodies,” Mulugeta told Capital.
He reminded that such kind of entities have a big role to steady the economy besides providing finance for the housing industry.
“For instance when the financial crises happened in 2008 such kind of funds played a vital role for a bailout to the mortgage industry,” he recalled on the positive aspects of the fund.
“Housing schemes need coordination of all stakeholders including the regulatory body, public enterprises and the private sector with the general public. We hope that the government will consider the sector challenge and come with massive alternatives,” Mulugeta, who is one of the successful leaders on the banking industry, explained.
As the standalone private mortgage bank in the country after half a century, the bank has expressed its expectations from the relevant regulatory body and other public offices to boost its goal and provide finance and houses at an affordable and swift scheme.
For instance, the bank has requested NBE to come up with a directive that is suitable for such kind of banking industry that was welcomed by the regulatory body, which is now drafting a relevant law to support the mortgage industry.
GBB has also tabled some sort of policy support from relevant government entities like Ministry of Urban Development and Infrastructure and others.
GBB officially joined the financial market in late 2021 and attained a promising performance in its first year of operation, which is mainly targeted at filling the housing sector while bridging the financing gap in Ethiopia.
Owing to the fact of little support from the current financial firms as well as government support, the housing market in the major cities across the country has proved to be of great socio-economic challenge.
To contribute its part, GBB is involved on various initiatives including partnering with potential developers to realize the provision of affordable houses with ownership at a lesser timeframe.
One of the strategies it set is constructing houses through its subsidiary. Recently the bank has sealed a deal with Goh Property Development and Marketing SC (GPDM), GBB’s subsidiary and housing developer, and the emerging construction company, Ovid Group to construct residential houses at the cost of 1.45 billion birr.
As per the deal, the developer will construct 270 houses on 2,851 square meters plot of land that is located around Yoseph Church, Nifas Silk Lafto Sub City.
The government has designed a ten year housing development plan to construct 4.4 million houses in the country and of that 80 percent is expected to be developed by the private sector.