By Muluken Yewondwossen

Ethiopian Shipping and Logistics (ESL), a state-owned logistics conglomerate, plans to build one of the largest terminals in Hawassa as part of its plan to leveraging the alternate port in Kenya. Another dry port in Moyale is also in the works.

The CEO of the logistics firm, Berisso Amallo, recently said that the establishment of dry ports in the southern region of the nation is one of the priorities for this budget year.

He stated that making use of Kenya’s prospective new port facility, Lamu, is the main goal of the logistics terminals construction. The Head of ESL’s Corporate Communication Department, Demssew Benti, said that work on building the dry ports at Hawassa and Moyale will start in the current fiscal year.

Currently, the only matter that remains is owning land in Hawassa. “As soon as we get the land in the Sidama region’s capital, we will start the project,” he told Capital. Demssew stated that the facility in Hawassa, which is 275km south of Addis Ababa, will rank among the largest dry ports for ESL according to the plan.

“We will build the dry port on a new expansion plot that we will receive, while we have long-established property in Moyale, the Ethio-Kenyan border town that is approximately 780 km south of Addis,” the Communications Department head elaborated.

He added that the facilities will be suitable for the use of Lamu port, which is about 530km from Moyale.

In addition to operating eight dry ports, including the massive one that just opened in Dire Dawa, ESL plans to build a dry port in Jimma, 350 kilometers west of Addis Ababa, during the budget year.

Hawassa, which is home to a number of export-oriented textile and garment factories at the largest industrial park in the nation, will have a suitable substitute when Lamu, which is situated on Kenya’s northeastern coast near the Indian Ocean, is able to serve the nation.

It can be recalled that President Uhuru Kenyatta and Prime Minister Abiy Ahmed opened the One Stop Border Posts at Moyale in late 2020, of which both countries’ now fully utilize the post.

The government of Ethiopia, the most populous country in the world without a sea outlet, is now searching for a number of port options in addition to those located in Djibouti, which is Ethiopia’s main port hub.

For example, the administration hopes to grow by utilizing Somaliland’s Berbera Port, which is well situated on the country’s southeast.

With the intention of serving Ethiopian and South Sudanese logistics, the Kenyan government established Lamu Port, and the port is situated at a beneficial spot for the upcoming works in southern Ethiopia.  

By our staff reporter

EthSwitch, the National Switch of Ethiopia, announces a 172 percentage increase in performance in its 10th Annual Shareholders Meeting held on November 21, 2023 at Hilton Addis Hotel.

The share company which is fully owned by all banks in Ethiopia, through its Board Chairperson, Solomon Desta revealed that it had achieved excellent results in terms of operations, revenue generation and project execution.

In his speech, Solomon cited that, “As per the agreement of the shareholders on March 16, 2023, EthSwitch increased the capital by 2.2 billion and offered 2.2 million new shares to the shareholders. On June 30, 2023, the total paid-up capital reached Birr 941,552,000. While on the ended budget year, the financial performance indicated that the company’s net profit before tax was birr 534,534,327, which showed a 172 percent increase compared to the previous year’s performance.”  

As showcased in the meeting, in the 2022/23 fiscal year, the banking industry made a total of 71,433,041 interoperable ATM transactions which amount to Birr close to 9 billion birr. Compared to the previous year, this showed an increase of 79 percent. In regards to POS, a total of 970,434 interoperable POS transactions worth 2.6 billion birr were made, an increase of 169 percent from last year. In addition, P2P transfer service from one bank account to another bank account amounted to 14.1million birr, showing a growth of 584 percent compared to last year.

In regards to project performance, as the board chair stated, “The National Payment Gateway received a pilot authorization from the National Bank of Ethiopia, and the pilot phase has commenced. The Instant Payment System and Shared Wallet system are on the final stages whilst the Shared Reconciliation project, a multi-tenant platform that creates operational excellence in the day-to-day reconciliation process, has launched and moved to a production environment for EthSwitch’s use.”

At the assembly, it was pointed out that the threat of cyber security was increasing at an alarming rate at the international level as well as in the country, and so in the last financial year, EthSwitch had increased its position in protecting the security of the information of the institution and financial institutions by obtaining the universal payment card industry security standard for the fourth time in a row.

In the same fiscal year, MasterCard ATM service was implemented to enable receiving cross-border money, and that the trial process of POS service is now being carried out by member banks. In addition to this, project initiation works with Discovery Global Network are also expected to be completed in the coming year.

In the next fiscal year, EthSwitch will focus on providing quality services, improving existing infrastructure and replacing it with new ones, completing started projects and strengthening international and regional (cross-border) payment collaborations.

By Muluken Yewondwossen

Despite the Ethiopian Customs Commission (ECC) intervening in the cargo delay that took place in Djibouti at the end of last month, the freight forwarders from Ethiopia and Djibouti assert that the issues still persists.

According to sources in the Ethiopian and Djiboutian logistics sectors, Djibouti Customs has implemented a new strategy that it claims aims to control under invoicing problems on inbound cargos. Private logistics companies from both nations said that the problem was first noticed in late October. They informed Capital that containerized freight with an invoice of less than USD 20,000 is unable to get clearance from Djibouti Customs.

Freight forwarding businesses state, “The Djibouti Customs says that the new procedure is come from the Ethiopian side rather than the initiative of the Djibouti authority”, adding, “The customs claimed that the cargos with less than USD 20,000 invoice would not be clear on the suspicion of under invoice.”

Furthermore, the forwarding specialists asserted that the under invoice problem is a mandate for an Ethiopian regulating agency rather than even the authorities in Djibouti having the capacity to govern the same.

Experts in the field have stated that the problem began when the National Bank of Ethiopia implemented new policies pertaining to letters of credit (LCs), ordering that an LC be used exclusively for a single purchase as opposed to the numerous shipment plans that Ethiopian importers typically employed. The central bank and the ECC asserted that the new policy’s goal was to regulate the flow of unlawful foreign cash and under-invoiced import goods.

Experts countered that Djiboutian Customs, “who does not have a concern for transit cargos that go to Ethiopia,” could not be involved in this instance. Since then, containerized consignments worth less than USD 20,000 have reportedly been delayed in their transportation to Ethiopia by the Djibouti authority’s new system, according to freight forwarders in Addis Ababa. Ethiopian freight forwarders have complained that the problem has interfered with their business, as have their Djiboutian partners.

Capital has learnt that the Ethiopian Freight Forwarders and Shipping Agents Association notified the ECC and other pertinent bodies about the problem a few weeks ago. According to sources who spoke with Capital, the Ethiopian diplomatic mission in Djibouti has discussed the matter with the Customs Commissioner in order to confer with Djiboutian authorities on the situation.

On November 13, Hassan Houmed Ibrahim, Djibouti’s Minister of Infrastructures and Equipment, met with Ethiopia’s ambassador, Berhanu Tsegaye (Amb), who said that they had discussed Djibouti Customs services.

In a same vein, Djibouti Customs and Indirect Tax received a letter from Debele Kabeta, Commissioner of ECC, on November 10th explaining the customs process and laws that Ethiopia follows. Experts claim that the letter, which courteously describes the process for the inbound cargo, indicates that the Ethiopian parties intend to resolve the issue amicably.

According to a copy of the letter that Capital saw, the under-invoicing issue brought up by its Djibouti counterpart was the reason why clients and the Djibouti coordination office of the company told the commission that they were experiencing shipment delays.

The letter explains how the problem affects local firms, saying, “We have been able to identify the fact that our importers and manufacturer are incurring additional costs and facing shortage of raw materials.”

The letter goes on to provide more details and explanation regarding the procedures that must be followed in order for the import and export transit service to adhere to international standards and principles.

The Customs Proclamation, which governs importers’ customs procedures, has also been cited on the letter.

The letter mentioned Customs Proclamation 859/2014 article 5 sub-article 1 that stated promote a self-assessment system whereby importer and exporters present the value of goods and pay duties and taxes by themselves, “then the examination of documents and goods will undertake by customs after termination of transit determines and the appropriate duties and taxes to be paid based on the adjusted price.”

“We believe that requesting real invoice price for transit cargo cannot expedite freedom of transit cargo,” the letter signed by Debele argued, adding, “Accordingly, we are conforming you that ECC will take all the necessary measures about the issue of goods during clearance time.”

“Therefore, we are requesting your honorable office to understand such issues and give us your usual support and sincere cooperation on this matter,” it concluded.

But, freight forwarders from Ethiopia and Djibouti with whom Capital talked to on Friday claimed that the issue remained unresolved. They stated that, in addition to the external expenses to importers and the nation, their activity is impacted by the “very limited cargos release that we observed in the past few days however at the current stage transit cargos are still on hold in Djibouti which are supposed to be transported in Ethiopia.”

Capital’s attempts to obtain information from ECC was ineffective.