Alem Aschalew, a major shareholder and CEO of Yekassa General Contractor, had high hopes when his company was awarded the contract to erect a seven-storey building six years ago. Sitting on a 2,000sqm plot around the Addisu Gebeya neighbourhood in northern Addis Abeba, the project was initially projected to cost 76 million Br.

Issues with right of way had already caused a four-year delay in the hands of another contractor before Yekassa, a grade-four construction company incorporated in 2013, took over. The project owner was keen to speed things up, and the contractor has been hard at work on the building's structural works. Additional finance was needed.

Midway through the construction, the project owner had filed for a 15 million Br loan from the state-owned Commercial Bank of Ethiopia (CBE). The contractor agreed to cover costs from its resources while the loan application was under review to avoid additional delays. In July this year, Yekassa was erecting the structure for the sixth floor. An unexpected jeopardising of the project's progress happened in the following month.

The central bank had ordered all commercial banks to suspend asset-based collateralised loans. The decision came as a shock to many, including the management of Yekassa. The predicament was made worse as regulators had not specified how long the freeze was to last.

"We had to stop the project right away," said Alem.

His company, with a capital of 28 million Br, was forced to lay off or reassign up to 70 temporary staff members.

Regulators had expected the freeze to last longer. But four months after its enforcement, through text messages regulators sent to executives of the commercial banks, the authorities lifted the freeze last week. It came too late for Alem and his management team at Yekassa. The construction company had already spent four million Birr to finance the construction.

Neither has the reinstatement of collateralised loans meant that construction continues immediately. The loan approval process at the CBE has yet to be restarted, though when has not been determined.

"The process will take four or five months," said Alem.

This is a story many in the construction industry share. Growing by an average of 11pc annually for more than a decade and providing jobs for five percent of the national workforce of over 41 million, it is an economic powerhouse. Before the freeze, the industry was a primary recipient of loans from commercial banks. It received 28.6 billion Br in loans from commercial banks last year, and 16.4 billion Br in credit from the Development Bank of Ethiopia and other sources over the same period, according to data from the central bank.

However, the industry was not spared when the authorities enforced a loan freeze in a desperate move to control the spiralling gap between the official and unofficial foreign currency exchange rates. The exchange rate in the parallel market registered nearly 55pc higher than official rates four months ago. The authorities saw it as the work of 'economic sabotage'.

The freeze targeted at reducing this gap, says Solomon Desta, vice governor of financial institutions at the National Bank of Ethiopia (NBE).

"We've achieved what we set out to do," he told Fortune.

The parallel-market rate has dropped to 62 Br for a dollar, although it remained nearly 25pc higher than the official rate last week.

The construction industry was not the only market player affected by the move, as the manufacturing sector took a hit, too. The sector received over 60 billion Br in loans last year.

Elauto Engineering Group, a company assembling knocked-down parts from Chery Automobile & JAC Motors (Chinese state-owned vehicle manufacturers), saw business stagnate following the freeze. Incorporated three years ago, Elauto depends on loans of up to 300 million Br annually for working capital. The loan suspension came like a storm for its management.

“It was shocking news for businesses like ours,” said Bekele Abebe, chief executive officer (CEO) of Elauto.

The company can assemble 30 vehicles a day at its plant in Bishoftu, 45Km southeast of the capital in the Oromia Regional State. However, liquidity constraints resulting from the freeze made it difficult to pay customs duties, and overhead costs forced it to cut production. It assembles up to seven vehicles a day, with its employees working only one shift.

"There's no question we can produce at capacity if we had better cash flow," said Bekele. Elauto is preparing to erect an additional assembly plant in Dire Dawa in October after securing 1.8ht of land in the industrial park there.

Though the past four months have been anything but pleasant for those in the construction and manufacturing sectors, the biggest victim is undoubtedly the financial sector. It will have far-reaching effects on the banking industry where interest on loans accounts for 75pc of total earnings, says Abdulmenan Mohammed, a financial statement analyst.