The Effect of the Coronavirus Pandemic on Contractual Obligations in Ethiopia
Bereket Fetene Getahun
Contract Laws Blog
The response of the Ethiopian federal government to the economic impact of COVID-19 on businesses has so far been to relax tax burden through Tax Relief Directive No. 64/2012. However, tax relief is beneficial only if a business makes income which currently is much harder as the pandemic is disrupting the performance of privet contracts. Businesses all over the country are experiencing reduced demand, late payments, depressed revenue and overall disruption in supply chine. Similarly, all members of the public with privet contracts i.e. employees, tenants, farmers, homeowners and others face the prospect of defaulting on their obligation. The government has so far refrained from interfering with the terms of contracts. One exception is the Federal Housing Corporation (FHC) in Addis Ababa which has announced a 50% reduction of housing rent due to the pandemic. On the contrary, other countries like Belgium have passed temporary measures to protect debtors affected by the pandemic from creditors by imposing a moratorium on creditors’ rights to enforce debts, terminate or dissolve existing contracts and initiate bankruptcy proceedings. 
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