Ethiopian Government Support for Disaster-Affected Investors Comes to an End: Directive 967/2023 Repeals Directive 253/2021
The Directive that provides for the Government’s support to investors whose properties were damaged by both man-made and natural disasters is repealed by the Ministry of Finance’s Directive 967/2023. Consequently, Directive No.253/2021 is repealed as of the 29th of May 2023.
Considering that the damages might have a detrimental effect on the investment flow to the nation, Directive 253/2021 was issued to assist investors whose properties had suffered damage from either a natural or man-made disaster, provided that they were willing to continue working and had signed a contract to do so.
It’s to be recalled that political instabilities in the country have caused a great amount of damage to government infrastructure and the properties of investors. Giving governmental support was intended to avoid the negative effects of the disasters; i.e., reduction in the investment flow. Beneficiaries of the support, according to the Directive, were, firstly, investors who were willing to continue their investment after they received replacement support for the properties damaged and sign an agreement to this effect. Secondly, investors whose properties were damaged as a result of political instability in the country especially starting from the year 2016 (2008 E.C), and did not receive support from the government, were also beneficiaries of the support. Thirdly, beneficiaries of the support were investors who did not receive any compensation for their property losses from Insurance companies.
As can be understood from the Directive, the government support for investors affected by natural and man-made disasters includes; tax-free imports of machinery, vehicles, and equipment, provision of loan opportunities, and exemption from Turnover tax and VAT.
The newly issued Directive No. 967/2023 does not provide any justification as to why the repeal was necessary.