During the recent conflict in the northern Tigray region, an explosion at DBL's compound caused significant damage, leading to a change in the company's business strategy. A company official, Adbul Waseq, described the terrifying experience of the explosion, which resulted in the suspension of operations for DBL and other foreign garment makers in Tigray. Ethiopia has made substantial investments in infrastructure over the past decade, aiming to boost its economy and become a manufacturing hub. By 2017, Ethiopia was recognized as the world's fastest growing economy. A year after Prime Minister Abiy Ahmed assumed office, promising to reduce the government's control over the economy and open up sectors like telecommunications, investors were optimistic. However, Ethiopia has faced numerous challenges over the past two years, including ethnic conflicts, natural disasters, and the COVID-19 pandemic. The recent outbreak of fighting between the military and Tigray's former ruling party has caused concern among investors, highlighting the country's instability. The lack of foreign currency from manufacturing exports, combined with increasing debt, has raised concerns about Ethiopia's financial stability. The IMF had previously warned about Ethiopia's high risk of debt distress even before the pandemic. Abiy's government stated that despite facing multiple crises, Ethiopia is moving forward with reforms to establish the groundwork for a modern economy. Mamo Mihretu, a senior policy adviser in the prime minister's office, told Reuters that the Ethiopian economy has shown remarkable resilience despite the challenges of COVID and ongoing insecurity. Ethiopia's textile production is relatively small compared to countries like Vietnam and China, with exports totaling $94 million in 2016. The country's top exports are agricultural products such as coffee, tea, spices, oil seeds, plants, and flowers. However, Ethiopia's focus on the textile industry in the past decade reflects its ambitions in manufacturing. As the conflict approached Mekelle, the capital of Tigray, textile companies in the area began closing down and evacuating their staff. Cristiano Frati, an electrician evacuated from a factory run by Italian hosiery chain Calzedonia, expressed concern that they wouldn't be able to leave as the fighting neared. Calzedonia announced on November 13 that it had halted operations at the plant, which employs around 2,000 people, citing the conflict as the reason. The company has not provided any additional comments on the situation. A broad perspective reveals Hawassa Industrial Park in the Southern Nations, Nationalities, and Peoples region of Ethiopia on November 17, 2017. Meanwhile, DBL has evacuated its foreign employees from Ethiopia. M.A. Jabbar, the managing director, expressed uncertainty about the situation, questioning when the war will come to an end. Another foreign company, Velocity Apparelz Companies, which supplies H&M and Children's Place, has also temporarily closed down, according to a company official speaking to Reuters. H&M expressed being "very concerned" and stated that they are closely monitoring the situation. The company has three suppliers in Tigray, all of which have ceased production, but they will continue to source from Ethiopia where they have a total of around 10 suppliers. Indochine Apparel, a Chinese company that supplies Levi Strauss & Co, reported that its operations in the Hawassa industrial park in the south of the country remain unaffected. Levi Strauss stated that they are keeping an eye on the situation and confirmed that there has been no impact on their supply chain thus far. The situation in Ethiopia's apparel sector was already difficult due to the economic impact of the COVID-19 pandemic before the conflict in Tigray. Some factories closed down, while others reduced wages or let go of employees. This downturn was not exclusive to the garment industry, as insurance companies had already ceased providing coverage for political risks in regions beyond Amhara and Addis Ababa. A risk consultant working with corporate clients described the current situation in Ethiopia as bleak. Similar to many other individuals interviewed by Reuters, the consultant preferred not to disclose their name due to concerns about potential repercussions from the government. Prior to the conflict in Tigray, Abiy's attempts to alleviate a restrictive political environment had already led to ethnic tensions. The violence that escalated in 2019 in various parts of the country had caused disruptions to projects, particularly in the agricultural sector. According to the leader of an agri-industry project that had to postpone its investment last year, the conflict began just as they were preparing to start planting. Workers are sewing clothes at the Indochine Apparel textile factory in Hawassa Industrial Park in Ethiopia's Southern Nations, Nationalities and Peoples region. Last year, IKEA opened a purchasing office in Ethiopia but closed it in September due to various factors including political and social unrest, COVID-19, and changes in the cotton market in Africa. Coca-Cola Beverages Africa, a partner of the Coca-Cola Company, stated that the conflict in Tigray has disrupted their business in Ethiopia, which makes up around 20% of their sales volumes in the country. Additionally, delays in the construction of two new bottling plants, part of a $300 million investment plan, have been caused by the pandemic and a tax increase. With the recent capture of Mekelle, Abiy has claimed triumph over the TPLF in Tigray. Abiy's adviser Mamo stated that the quick and resolute military operation has eased any worries about political instability for investors. However, the TPLF remains determined to continue the fight. Ethiopia's increasing external debt, largely due to heavy borrowing for development projects from China, leaves little room for mistakes by the government. Foreign direct investment inflows have been decreasing consistently since reaching a peak in 2016 of over $4 billion, falling to approximately $500 million in the first quarter of the current fiscal year. Inflation is currently at around 20%. "There are limited solutions to this situation. The country is unlikely to receive additional funding from the IMF and is unable to access financial markets." Menzi Ndhlovu, a senior country and political risk analyst at Signal Risk, an Africa-focused business consultancy, stated that their best hope for improvement is a global economic recovery next year. Despite ongoing challenges, Ethiopia introduced a significant investment law and made changes to its currency. Additionally, the government is moving forward with plans to liberalize the telecommunications industry, recently announcing the tendering of two new telecoms licenses and the sale of a minority stake in Ethio Telecom. Despite current unrest, companies interested in these opportunities are reportedly undeterred. However, Ethiopia's ambitious plans for manufacturing have been hindered for the time being. Waseq from DBL, who has gone back to Bangladesh, questioned, "Who would be willing to go there in this current situation?" and concluded, "Nobody."