Will businesses survive if the government stops being so extravagant?

In August, Addis Ababa city barred its offices and the 11 sub-cities from holding hotel events. Officials say this aims to redirect discretionary spending to capital outlays. The directive covers digitisation for cost-cutting, as well as office supply repair and reuse. Businesses, especially hotels, say the move will shrink their income and threaten viability, voicing strong opposition.

As the government is the hotels’ biggest client, its withdrawal rightly shocks the industry. Losing government training, evaluation, and workshops means a downturn worth millions, with some reporting a 40% immediate loss in business. Even without official figures, spending on office provisions is significant, and cuts impact suppliers deeply. The sector’s decline will ripple through the supply chain, leading to multiple layoffs.