In-depth: Tempest of Turmoil: Tigray’s economic crisis deepens amid soaring prices, political chaos

By Molla Mitiku @MollaAyenew

Addis Abeba – Despite the optimism ignited by the signing of the Pretoria Agreement in November 2022, which held promise for peace and recovery, the people of Tigray now face a severe economic crisis fueled by skyrocketing prices for basic goods. The surge in prices of everyday items has exacerbated an already dire situation, pushing residents of the region to the brink.

Local residents, who are increasingly struggling to make ends meet, report that the high prices of items have skyrocketed, especially in recent months. They link this alarming trend to the region’s escalating political instability, driven by internal tensions within the Tigray People’s Liberation Front (TPLF) and Tigray Forces.

Consumers across various cities and towns in the Tigray region report that the price of teff, a staple food, has surged by nearly 3,000 birr, while the cost of five liters of cooking oil has increased by 300 birr in recent months.

The ongoing economic crisis has resulted in substantial price increases across multiple sectors, particularly affecting essential commodities such as rice, wheat, oil, sugar, and vegetables. Residents attribute these surges to a combination of limited supply and rising demand. Furthermore, fuel shortages have elevated transportation costs, contributing to higher prices for locally produced goods.

In an interview with Addis Standard, Hassen Mensur, a father of five residing in Mekelle, the capital of Tigray, detailed his daily struggles. He emphasized that with inflation spiraling out of control, even basic necessities have become financially inaccessible, plunging vulnerable families into desperation.

“Every week, prices climb higher, sometimes by hundreds or even thousands of birr,” he explained. “Rent has become unaffordable; it’s impossible to find a small room for less than 5,000 birr, which is my entire salary.”

Medhin Alem, a mother of two, is among those severely affected by the rapid rise in commodity prices.
“I am barely able to support my children, trading at a small coffee shop near my house,” she said. “Even basic survival has become an overwhelming challenge.”

Economic storm rages on

Teame Aredom, Director General of the Tigray Food, Drug, and Health Facility Regulation Authority, emphasized that the recent price hikes have made daily survival a significant challenge for the region’s residents. “Inflation has eroded purchasing power, and residents are forced to queue at local banks, desperate to withdraw whatever savings they have left,” he stated.

According to Teame, the economic downturn has left many families struggling to survive.
“Many have resorted to selling personal property or taking out loans just to afford daily necessities,” he said. “While some receive financial support from relatives abroad, many others lack this option. The crisis has been especially harsh for daily laborers, small traders, and low-income families, pushing them further into poverty.”

Every week, prices climb higher, sometimes by hundreds or even thousands of birr.”

Hassen Mensur, a father of five and resident of Mekelle

The director general also highlighted the challenges displaced children face due to rising food prices, noting that families are often forced to buy cheaper, less nutritious options, increasing the risk of hunger-related diseases and long-term health complications.

“Many businesses in Tigray are struggling due to high operational costs, supply shortages, and declining consumer spending,” Teame explained. “Small traders face difficulties securing inventory, while those still operating are forced to pass rising costs onto customers.”

Additionally, Teame underscored the critical shortage of essential medicines and medical equipment, which has made access to healthcare increasingly difficult. He further noted that the destruction of manufacturing and transportation infrastructure has led to soaring prices for materials such as cement and steel, hampering efforts to rebuild homes and public facilities.

As economic conditions deteriorate, Teame noted that many rural residents are migrating to cities in search of work, while others are fleeing Tigray at an alarming rate. “Over 3,000 people are leaving Tigray daily, and tickets for travel outside the region sell out quickly,” he disclosed.

Stakeholders have also emphasized that a growing number of young people are attempting to migrate abroad illegally due to widespread unemployment and poor living conditions.

Last month, Addis Standard published an in-depth article on the surge in young people from Tigray resorting to irregular migration, primarily due to the scarcity of employment opportunities.

According to the report, migrants traveling predominantly through unauthorized and hazardous routes frequently fall prey to criminal gangs that strip them of their possessions. Women, in particular, face elevated risks of sexual violence during these journeys.

Fuel shortages choke Tigray’s recovery

Fuel shortages have further exacerbated the economic crisis in Tigray, with gasoline unavailable at regular stations and being sold illegally at three times the standard price.

Regional authorities attribute the fuel shortage to criminal networks smuggling fuel into Eritrea. They also accuse local merchants of hoarding goods, inflating prices, and worsening the suffering of ordinary residents.

Despite efforts by the Tigray Interim Administration to curb illegal fuel sales, Teame noted that enforcement has been weak. “Letters have been sent urging gas stations to follow the law, but no concrete action has been taken,” he stated.

In a press briefing on 11 February, 2025, Gebremeskel Tareke, head of the Tigray Trade and Export Agency, acknowledged that the persistent fuel shortage is severely impacting the region’s economy.

He revealed that although 66 of the 93 fuel stations in the region resumed operations following the Pretoria Agreement, the fuel supply remains significantly below pre-war levels. According to Gebremeskel, Tigray’s fuel demand in 2020 was 13 million liters of diesel and 2.5 million liters of gasoline. However, he noted that the current supply consistently falls short of these requirements.

“We are now facing a fuel shortage that has persisted for months,” he stated, attributing the crisis partly to insufficient fuel supply from the federal government.

Gebremeskel reiterated that fuel deliveries have repeatedly fallen short of both projected and actual demand, underscoring how insufficient supply has stifled economic recovery and halted oil-dependent operations.

He said, “This scarcity has disrupted economic activity and forced the suspension of fuel services for industries and critical infrastructure.”

Gebremeskel further disclosed that the agency is working with the federal government to improve fuel supply, prioritizing emergency assistance, government services, and community needs.

Officials also emphasize that the destruction of infrastructure, including numerous roads and bridges during the war, has severely disrupted transportation networks, resulting in slow distribution of goods and significantly higher prices.

Tadele Mengistu, head of the Transport and Communication Bureau of the Tigray Interim Administration, explained that the sharp increase in prices is primarily due to supply chain disruptions, road blockages, and overall market instability.
“Before the conflict, Tigray had over eleven trade entry routes that enabled efficient goods flow into the region,” he stated. “However, the only operational route now is through the Afar region, which lacks a reliable supply system. As a result, Tigray remains in a state of partial lockdown, worsening the economic crisis.”

The bureau head noted that the disruption of key trade routes has severely restricted the movement of goods, leading to shortages and price hikes. “External pressures, such as the decline in the value of the local currency against the dollar, have further escalated the cost of imported commodities,” he added.

Tadele continued, “The impact on the people of Tigray has been catastrophic, as low-income families are finding it increasingly difficult to afford basic necessities. Meanwhile, hundreds of thousands of internally displaced persons (IDPs), particularly those residing in camps, are enduring extreme hardship.”

Leadership feud ignites economic freefall 

Residents highlight that the weakening of governance and law enforcement has further exacerbated insecurity in Tigray, deepening the crisis and making it even harder for residents to cope. “Without effective security, people are becoming increasingly vulnerable,” said one resident. “The soaring commodity prices are not just an economic issue but a symptom of Tigray’s fractured political and security situation.”

Tadele underscored that political instability within Tigray, compounded by internal tensions among TPLF factions, has worsened the crisis. “Together, these factors have left the region in a state of severe economic distress,” he added.

In recent months, Tigray’s political landscape has deteriorated into crisis due to an escalating rift within the Tigray People’s Liberation Front (TPLF). This divide, which has been widening since its inception, is primarily driven by tensions between the faction led by Debretsion Gebremichael (PhD) and that of Getachew Reda, President of the Tigray Interim Administration.

The fear of renewed conflict is palpable.”

Teame Aredom, Director General of the Tigray Food, Drug, and Health Facility Regulation Authority

The internal schism intensified following the TPLF’s 14th Congress, during which Debretsion’s faction removed Getachew and several other officials from their positions, declaring that they “will no longer have the authority to lead, make decisions, or issue directives.”

In response, the interim administration, led by Getachew, accused Debretsion’s faction of attempting to “destabilize” the region through actions it characterized as a “coup d’état.” The administration further warned of legal action against Debretsion’s group, alleging that it had instigated “chaos and anarchy” in Tigray.

In addition to internal divisions within the TPLF, Teame attributed the region’s economic woes to conflicting statements from security forces. “These fractures have exacerbated the region’s instability, halting any post-war recovery efforts,” he stated.

Political tensions in Tigray escalated further in recent weeks after senior leaders of the Tigray Forces announced their decision to dissolve and restructure the region’s interim administration, describing it as “weakened” and “failing to meet its responsibilities.”

In a statement issued on January 23, 2025, following days of meetings in Mekelle, the leaders criticized the Tigray Interim Administration, established under the Pretoria Agreement, for being unduly influenced by “external forces.” They accused the administration of becoming “a tool for others,” alleging that some of its leaders had “committed treason, abandoned public interests, and acted beyond their assigned mission.”

Following this announcement, demonstrations have erupted across various cities and towns in Tigray, with supporters of both Getachew and Debretsion’s factions taking to the streets.

Teame explained that the renewed tensions have eroded market confidence and disrupted business operations, stalling any hopes for recovery. “Fledgling businesses have collapsed because people fear that the statements from security forces indicate impending conflict,” he said, highlighting how fear and uncertainty have contributed to the economic downturn.

Teame warned that the political rift in the region poses a significant risk of reigniting violence, reminiscent of the recent war that devastated Tigray.

“The fear of renewed conflict is palpable,” he noted. “People remember the horrors of the war and blockades, when even those with savings were not immune from hunger.”

Economic expert Gebreab Fiseha attributes the rising cost of living in Tigray to the region’s persistent insecurity. “The existing political instability is clearly hindering business activities and worsening the crisis,” he explained. Gebreab argued that the ongoing insecurity discourages investment, disrupts the movement of goods and humanitarian aid, and makes economic recovery nearly impossible for Tigray. “Instability is the core issue behind the rising costs and economic hardship in the region,” he emphasized. Without security, the region remains mired in political and economic turmoil. AS