Ethiopia: Renewed Tigray conflict undermines reforms and stability
Event
Following months of rising tensions, northern Ethiopia returned to large-scale conflict on 23 September when the Tigray People’s Liberation Front (TPLF) launched offensives into the neighbouring Amhara and Afar regions, effectively ending the fragile peace that had prevailed since the 2022 Pretoria Agreement. While the agreement ended extensive hostilities, several core political issues remained unresolved, including the status of disputed territories, Tigray’s representation within federal institutions and the future role of the TPLF in national politics. These tensions intensified in the run-up to the June 2026 general election, from which Tigray was excluded.
In recent weeks, the battlefield picture has shifted in favour of the Ethiopian National Defense Force (ENDF), reversing most of the TPLF’s offensive gains and retaking Mekelle, the capital of Tigray. The TPLF remains active in several rural and border areas, and the precise lines of control remain difficult to verify.
Impact
The fighting in Tigray is part of a broader challenge to federal authority. Prime Minister Abiy Ahmed’s efforts to strengthen federal authority have faced growing resistance in several parts of the country, including in Amhara and Oromia. Against this backdrop, the TPLF has joined six other armed organisations under the Ethiopian Peoples’ Forces Alliance for Survival coalition. While the alliance unites groups with different local agendas and operational coordination is likely to remain limited, it nevertheless complicates federal military planning by forcing the government to allocate resources across multiple theatres.
The renewed conflict is increasing security risks and disrupting economic activity in northern Ethiopia. Airport closures in Tigray, telecommunications disruptions and insecurity along transport corridors are likely to complicate trade and logistics in the affected areas. However, given Ethiopia’s size and the concentration of the fighting in the north, the direct impact on nationwide economic activity should remain relatively contained unless the conflict spreads further or is prolonged. Even so, increased security spending is likely to further constrain fiscal space at a time when Ethiopia remains reliant on IMF support and external financing. The previous Tigray conflict contributed to years of delays in Ethiopia’s debt restructuring process. Though the country recently reached an agreement with official creditors under the G20 Common Framework, negotiations with private creditors are still ongoing. Renewed insecurity could complicate those debt restructuring efforts, undermine recent improvements in foreign-exchange availability and slow the normalisation of the foreign-exchange market. This would jeopardise the gains achieved since the 2024 exchange-rate liberalisation, at a time when reform momentum had already begun to fade.
Ethiopia’s internal conflicts are becoming increasingly intertwined with broader regional dynamics. Eritrea has again emerged as a key actor and has increasingly aligned itself with the TPLF, a reversal from the 2020-22 war when it intervened alongside Addis Ababa. Relations between Eritrea and Ethiopia have deteriorated significantly since the Pretoria Agreement, from which Eritrea was effectively excluded despite its involvement in the war. At the same time, tensions have risen over Ethiopia’s increasingly assertive pursuit of Red Sea access, including rhetoric surrounding the strategic port of Assab, which Asmara views as a threat to its sovereignty and security.
Regional spillover is not limited to Eritrea. The civil war in neighbouring Sudan is increasingly affecting Ethiopia’s border regions, with armed groups operating near the Ethiopia-Sudan frontier and the RSF repeatedly seeking to control key border crossings and trade routes.
In this context, Ethiopia’s medium‑ to long‑term political risk rating at 7/7 and short‑term political risk rating at 6/7 remain stable.
Analyst: Jonathan Schotte – j.schotte@credendo.com