The war in Ethiopia, which lasted for 10 months, resulted in massive casualties and thousands of deaths as well as the displacement of millions of others, including many who are in dire need of assistance.
However, this was not the only damage suffered by the second largest country in Africa in terms of population, but the war incurred a huge economic cost to the country, which may take years to repair.
A 26-year-old citizen from Addis Ababa, Tighist, who did not want to reveal her full name, says that her monthly expenses doubled for two reasons: the war that broke out in the northern Tigray region last November, and the Corona virus pandemic.
"Before Covid and the conflict, I used to pay 1,000 birr (about $22) a month for groceries. Now I spend 2,000 birr. Things are more expensive now, phones, food, clothes."
Official statistics show that the cost of basic consumer goods has already risen in Ethiopia, with an average increase of nearly a quarter higher in July compared to a year earlier.
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Tygest works in a supermarket to support her family, and is also responsible for buying food while her brother pays for the rent.
She added, "The exchange rate of the dollar is also not good. After the price of one dollar was 35 piras last year, it is now 45 piras."
Spending on the war effort has "already taken a toll on Ethiopia's ability to buy dollars", causing the exchange rate to deteriorate, says Faisal Roble, a US-based expert on the Horn of Africa.
It is not clear how much the war will cost, but Trading Economics expects military spending to reach $502 million by the end of this year, up from $460 million last year.
Last week, United Nations Secretary-General Antonio Guterres said that the conflict "has drained more than $1 billion from the country's treasury."
Before the coronavirus pandemic and the war, the Ethiopian economy was one of the fastest growing in the region, growing at an average rate of 10 percent annually in the decade to 2019, according to the World Bank.
Although Tegest talks about the official rate available in banks, the birr has fallen further on the unofficial market, says Rupel, and is now at 67 birr to the dollar.
He adds that business owners in the country are concerned about the deteriorating security situation as the war spreads outside Tigray and into the neighboring regions of Afar and Amhara.
Roble says that many people turn to money dealers on the border with the self-declared Republic of Somaliland, and this pushes the price of the beer currency down even more.
The civil war began when the Tigray People's Liberation Front, the ruling party in Tigray, attacked government military bases in November, amid an escalation of disagreement with Prime Minister Abiy Ahmed over dissolving the ruling coalition and postponing elections.
Since then, the Ethiopian army, its Eritrean allies, government police forces and local militias have fought a bloody war against the Tigrayan fighters.
Both sides were accused of atrocities, including rape and mass killings of civilians.
Tigray has been suffering from a lack of basic services, including telecommunications and banking, since the government imposed a blockade in June, after the rebels recaptured the regional capital, Mekele.
More than 400,000 people in Tigray are already living in famine-like conditions, with aid distributions undermining and lack of electricity and fuel supplies driving up prices.
Philemon Burhani, a resident of Mikkeli, tells BBC Tigray that food prices and rents have risen dramatically recently.
"There is no money because all banks are closed and government institutions do not pay salaries," he adds.
Internationally, the war has severely affected Ethiopia's reputation as a place to invest, says Irmgard Erasmus, of the consultancy NKC Africa Economics.
"If your customers are under severe pressure from high inflation, you won't see consumer-driven growth like we see in the US or the eurozone," she says.
Erasmus points to the recent liberalization of the telecom sector in Ethiopia, which originally attracted the interest of a number of service providers, including South African telecom giant MTN.
In the end, only one company succeeded in bidding for one of the two telecommunications licenses on offer, a group led by Kenya's Safaricom worth $850 million.
Although the rules initially restricted new licensees from activating the mobile money exchange system and dampened investor interest, industry sources say the Tigray conflict has also significantly affected investor perceptions.
Ethiopia's overall economic growth for this year is expected to slow significantly from six percent in 2020 to just two percent in 2021, the lowest level in nearly two decades, according to the International Monetary Fund.
The country imports about 14 billion dollars of goods annually, while it exports only 3.4 billion dollars.
The Ethiopian national debt also worries economic observers, as some expect it to reach $60 billion this year, or nearly 70 percent of GDP.
“This is a conservative estimate,” says Erasmus, adding that Ethiopia's military spending may be higher than expected, and it may have incurred undisclosed debts in the past.
Although the United States has imposed some restrictions on granting visas to Ethiopians involved in the war and suspended some spending, the international community has so far been reluctant to apply maximum economic pressure on the government, or to cut off generous aid programs.
About a quarter of the population lives below the national poverty line, and the average annual per capita income is only $850.
“There is clearly scope for tougher sanctions if Prime Minister Abe, who won the 2019 Nobel Peace Prize, does not de-escalate the conflict," says Whitney Schneidman, a professor at the Brookings Institution think tank in Washington.
He adds that the dilemma of the Biden administration is to put enough pressure on Abiy to end the war without completely isolating Ethiopia.
"All the tools are on the table, but you have 110 million people, and you can't make the nation isolated," Schneidmann says. "It's very important, very strategic."
