A major initiative aimed at revitalizing tourism and economic growth in the historic city of Aksum is on the horizon. Over the past two years, Initiative Africa has diligently executed its “Business for Peace and Development” project, generously funded by the Embassy of Sweden/Sida. The primary goal of this endeavor has been to foster the active involvement of the business community in processes of peace building.
As an integral part of this ambitious initiative, an upcoming conference focused on rejuvenating Aksum’s tourism sector is slated to coincide with the Ethiopian New Year. The event, aptly named “From Axum,” is a collaborative effort orchestrated by Initiative Africa, in partnership with the Center for International Private Enterprises (CIPE), the Tigray Chamber of Commerce and Sectoral Association, and the Axum Chamber of Commerce and Sectoral Association. This conference is poised to serve as a pivotal platform for tourism sector stakeholders, experts, and enthusiasts to convene, deliberate strategies, and exchange knowledge.
A critical outcome of the assessment conducted to invigorate tourism in Aksum was the urgent reconstruction and reopening of Aksum Airport. The Ministry of Tourism has endorsed this recommendation wholeheartedly. Aksum Airport, renowned as Ethiopia’s oldest and historically the second-busiest airport, stands as a vital attraction within the city. However, its operations came to a halt in 2020 due to the conflict in the Tigray region and have remained suspended ever since.
The ramifications of restoring and reopening Aksum Airport extend far beyond the realm of aviation. The local economy is poised to experience a substantial upswing, as the airport’s resurgence promises to amplify connectivity and tourist footfall in the region. Nestled within Ethiopia’s Tigray region, Aksum Airport resides in the proximity of some of the nation’s most venerable historical landmarks, including the ancient city of Aksum itself.
The leadership at Initiative Africa perceives the revival of Aksum Airport as a pivotal turning point that not only impacts Ethiopia’s aviation sector but also casts ripples of transformation across the broader tourism industry. The airport’s reopening is projected to exert a profound influence on the country’s economic trajectory and usher in a new era of expansive tourism opportunities.
As preparations for the conference and subsequent airport reconstruction gain momentum, all eyes are fixed on Aksum, where the convergence of business, tourism, and peace-building efforts holds the promise of a brighter future. The successful realization of these endeavors could mark a historic chapter in Ethiopia’s journey toward sustainable growth and development.
Aksum Airport reconstruction project set to boost tourism and economy in Aksum
Success at Sea
On August 2011, four enterprises which were working independently in the sea transport sector consolidated into a new company, which is well known today as the Ethiopian Shipping and Logistics (ESL). The companies that merged to form this logistics colossal firm were the Ethiopian Shipping Lines, Ethiopian Maritime and Transit Service Enterprise, Dry Port Enterprise; and the former Comet Transport, which was consolidated in to the new company.
This newly amalgamated enterprise as a result was vested with the huge responsibility of rendering sea-transport and logistics services to the country’s importers, exporters, and investors in a more effective and efficient way, by reducing transit time, cost and hand offs.
Cognizant of this, ESL shouldered this responsibility by working round the clock to propel the country’s economic growth. Despite the downsides of business stemming from the pandemic and tensions across the globe, ESL in July welcomed its newest and largest vessel, MV Abbay II, to its home port at Djibouti port.
Following the recent string of success, Capital reached out to Captain Wondwossen Kassa, Deputy CEO for the Shipping Sector at ESL, for an insider’s view of the Enterprise’s progress as well as future ambitions. The following are excerpts from the candid interview;
Capital: In your view what is the role of ESL in shipping in Ethiopia? What do you consider are your company’s strength and ability?
Capt. Wondwossen Kassa: In order to understand our role, first we have to appreciate the fact that shipping in itself is hard to measure, since it is complex in nature. Shipping is a huge business and there are many kinds of specializations, such as bulk shipping, tankers, containers, etc. Our company in the grand scheme of things plays a multipurpose role in shipping. With the ability and capacity that we have, we ship many kinds of items.
Out of the top 20 companies, I believe we are ranked 17th and that in the realm of Africa is a considerable achievement in that there have been many private shipping companies in the past before but that has not panned out to be the case now. We can say that right now we are the only dominant shipping company in the continent. We capitalize on this positioning by focusing on the items that get in and by controlling the seaborne trading. One of our biggest strength and ability is control the seaborne trade. What I mean by that is using the limited recourses that we have to know the prices of the products, including the origin of where the products are from and when the products are set to arrive, etc. By using this method we are able to minimize our costs greatly.
Capital: As the shipping space continues to become monopoly, with the struggle of entering this business as a new comer being slim and with others living the business entirely, how are you managing to stay afloat in business?
Capt. Wondwossen Kassa: When you compare the situation to a monopoly, of course that refers to a 100% control. This in our case is however not true considering the products that get in. The reality is that in terms of percentages the control is about 30 to 35% of ESL.
As noted, once a shipping company leaves the scene, it is very hard for it to get back in. There are cases whereby bigger larger companies over trump smaller ones, deceasing the companies’ as a form of controlling the market. This then gives the big firms control of the price market. The reason they do this is so that they can reap the benefits of profit increase. As a result, this puts a lot of third world countries under a lot of pressure.
It is a strategic sector that the country should support.
For us, the main reason as to why we are still in the business is because of government policy, FOB and finance support. As a result we have been able to stay afloat and we have reciprocated the support rendered to us by working hard as a company as well as through bringing in products that contribute growth for the country. If you notice our company from beginning to end, we have control over it, and with this ability, we have been able to decrease the costs. Our company has vast activities, we have our ups and downs like any other company, but we are resilient and are in a strong position to weather any storm.
Capital: ESL recently swapped the MV Abbay II, ultramax vessel, by ESL’s previously owned two tankers. Can you tell us about the process of purchasing the vessel?
Capt. Wondwossen Kassa: The process was very rigorous and involved; studies, permissions and purchasing, which took over a year. There was a lot of trial and error with the process. Nevertheless, I’m thankful to the board members because they were very helpful with the process. Of course there were downsides to the process because while other ships were working, our two tankers were left in a state of being stagnant in the past three years. This created a lot of loss and stress for the company. Therefore as a company we decided that we had to become productive. We went into a state of planning, on what to do, how to do it, we also focused on what our better choice were, what to do in 10 years, and how to best compete in the market including the technicalities that come with the business. In terms of the process of picking the vessel, we had to compare the environmental factors, the size, etc. In the end, we picked the one most in demand that met our standard.
We opted for such a vessel because it will enhance our operation and productivity. Now we are already seeing the fruit.
Capital: Was the vessel an all new one or was it used beforehand?
Capt. Wondwossen Kassa: It is slightly used. MV ABBAY II was built in 2016 by Yangzhou Dayang Shipbuilding Co. Ltd., China and was previously registered in Majuro under the flag of Marshal Islands. It was operated by Bernhard Schulte Ship management, a vessel management company based in Hamburg, Germany.
Capital: What is your plan for the future?
Capt. Wondwossen Kassa: For the last 5 years, we focused a lot on the standards as a result we had to change a lot of MOTEMS and for the next five years will also follow up and do the same. Again for the next five to seven years we would like to increase the profits by 3 or 4 times. We plan to achieve this by increasing our equipment, and by working with efficient high-end technologies. We also want to best understand our surroundings and capitalize on the opportunities that come with it. For the case of our country, there are lots of untapped potential with bulk shipping by trusting in the market, we aim to appropriately invest and reap the benefits from it.
Expanding feeders service and cross trade is one of the major priorities that we will tap in the future.
In order to deal with the ever changing shipping dynamics and achieve our vision and mission, ESL has launched its revised 7 year strategic plan.
After five years, since new players may join the sector in Ethiopia we are now aggressively working round the clock to be ready for the upcoming competition.
Cognizant of the reduction of commodities transported on FOB as a result of increase in commodities loaded from Djibouti, the success of cross trade which has been the backbone of ESL’s revenue is at the center of the logistics firm’s agenda to positioning itself strategically to ensure it is on top of its revenue stream.
For instance, the peace process in Yemen is expected to be a good market for ESL. Moreover, wind energy has become a new segment in the global arena, such is the case for Saudi Arabia which has new projects in addition to the establishment of new cities in the Kingdom.
Regarding the wind project there are several countries undertaking wind project all over the world, however, most of the equipment are manufactured in China that needs transportation.
To meet the demand, we need to have big vessels that accommodate the latest type of wind turbines. This is the reason which has led us to revise and come up with a new strategic plan to achieve great results in the coming years.
There are three main shipping segments under which ESL is working to engage with and expand its operations.
The first one is the multipurpose vessel operator segment. ESL is one of the known handy size multipurpose (MPP) operator in the shipping market and has a plan to acquire four 62,000metric tons MPP vessels in the coming 5 years. Such acquisitions will further consolidate ESL’s position as MPP operator in the international market.
Considering the fast changing local, regional and international realities, ESL believes its container carrying capacity and connectivity should be enhanced.
Likewise we plan to increase our container inventory from 13,000 TEU to 100,000 TEU and the container deadweight capacity to 237,000 metric tons in the coming 5 years. Such an expansion will help us to target annual container carrying capacity of 400,000 TEU.
Last but not least was the bulk segment. On this segment ESL plans to acquire 8 Ultramax bulk carries with a total carrying capacity of 500,000 DWT.
At the end of full implementation of the plan, ESL will increase its revenue from cross trade alone by six folds from the current USD 30 million to USD 180 million and its DWT capacity from the current 305,000 metric tons to 1.1 million metric tons after five years.
Capital: Are you going to use your handysize vessels to feeder service? How do you plan to use them in the cabotage method?
Capt. Wondwossen Kassa: By way of simple definition, cabotage is the trade and transport, in coastal waters, or airspace between two points within a country. For us we have comprehensive plans with the main goal being identifying the market at hand. Yes our handysize vessels are suitable for feeder service to serve the nearest destinations but we will not fully depend on them since the business shall expand that needs biggest vessels. So we need medium container vessels to expand our feeder service.
Capital: How the waiver affects your business and, how has that impacted the national interest?
Capt. Wondwossen Kassa: When it comes to waiver, everyone you know places their country first. I won’t get into the details because of its vastness since it involves a lot of factors including ourselves. The good thing about the waiver and how it is given is that a lot of gaps were present in the past, but now there are many improvements being made. Other than that I am very proud to say that we have a very efficient system, that when one ship leaves another one come at the berth .We made it in a way of avoiding cost and I am very proud of that. When it comes to trade, the national interests are very interchangeable.
Capital: What are possible challenges?
Capt. Wondwossen Kassa: It’s an up and down business as you can imagine. Even though you can’t predict it, you can always prepare for the opposite. But sometimes in cases like COVID-19 it is very unpredictable. Most fluctuations have a rhythm. We try our best to prepare, minimize cost and stay in the business. There are cases where it is out of our control such as the tension between China and Taiwan, which have ripple effects to our business.
Nocolo Machiavelli And The Future of Globalization
Alazar Kebede
Rapid change has rendered invalid many of our expectations, so that today’s reality often contradicts them. Their uselessness is evidenced by the big shocks that few foresaw: Brexit, the global financial crisis, the rise of ISIS or the collapse of oil and other commodity prices. This discomforting state of affairs is reflected in the utter failure of political pundits worldwide to predict the viability of the reality TV “demagogue” Donald Trump elected as President of United States.
Some years ago, few foresaw the rise of the far-left Jeremy Corbyn as leader of the British Labour Party, or of “The Punisher,” Rodrigo Duterte, as President of the Philippines. As a result, uncertainty reigns supreme, so much so that the boardrooms of many Fortune 500 companies have decided to punt. According to American economic analysts, instead of investing, which they are supposed to do in order to grow their businesses, they are collectively holding onto a record wad of cash. They simply lack the confidence to make bold investments.
Ian Goldin, Director of the Oxford Martin School and professor of globalization and development at the University of Oxford argued that, whether as citizens, policy makers or business leaders, going about our life in a tumultuous time without a reliable way to make sense of surprises is downright dangerous. Why? Ian Goldin suggested two reasons. First, because rapid change usually demands rapid responses, and, as the cash accounts of big companies show, when people lose all confidence in their judgments, they hesitate when instead they need to act. Second, because, as present-day surges of anti-immigrant sentiment in Britain, anti-trade agendas in the United States and ultra-nationalism in India suggest, it’s when ugly surprises leave people grasping for the big picture that they are most likely to adopt the wrong picture for the wrong reasons.
Can we prevent surprises? No. But, according to Ian Goldin, we should aspire to do a better job of shaping their consequences than we have done in the past few years. To that end, almost 500 years ago the Italian philosopher, Niccolò Machiavelli (1469–1527) wrote: “Whoever wishes to foresee the future must consult the past; for human events have been, and ever will be, animated by the same passions. The result is that the same problems always exist in every era”. At the time, Machiavelli was schooling the leaders of Italy, who were struggling to navigate a similar time of unrelenting surprise. First, Copernicus upended their God-given notions of heaven and earth. Then, voyages of discovery by Columbus, Vasco da Gama and Magellan tore up millennia-old maps of the “known” world which, as it turned out, hadn’t depicted even half of the whole.
Immense riches were generated from trade for some, the happy few, while also intensifying the spreading of conflict, economic collapse and pandemics, the prices that the countless others had to endure. Gutenberg’s printing press flipped knowledge production and exchange from tight scarcity to radical abundance. It also put most scribes out of business and enabled a single disillusioned friar, Martin Luther, to ignite a century of religious wars. New communication technologies allowed individuals to challenge mighty authorities. Gunpowder shocked the once-invulnerable: Ottoman cannons toppled Europe’s eastern bulwark, Constantinople, and shoved Venice’s mighty merchant fleet out of the eastern Mediterranean.
Ian Goldin stated that the present moment is our age of discovery, our Renaissance, akin to Machiavelli’s own in both the crescendo of change taking place across the full range of human endeavor, and in the interdependence, instability and fear that accompany it. Contemporary historians may point out that it is impossible to predict future events by looking backwards. After all, details matter, and usually differ by enough to frustrate time travel. But that’s missing Machiavelli’s point. Learning from history isn’t about divining precise predictions; it’s about regaining perspective. Technologies change, but human nature is more stable. When the events of the present stop making sense for us, we can clarify the personal choices and social conflicts to be expected by looking back at how humanity coped in similarly historic circumstances.
Ian Golding argued that Machiavelli and his fellow citizens knew this crisis well. His own city of Florence suffered a shocking popular power-taking when Girolamo Savonarola (1452-1498), a mid-level friar from Ferrara, exploded from obscurity in the 1490s to enthrall Florentines who felt left behind economically or culturally with sermons that lay blame upon the misguided policies and moral corruption of their leaders. He and his zealous supporters, though a minority by far, swept away the Medici establishment and seized control of the city’s councils.
Chris Kutarna, Commonwealth Scholar and a Fellow of the Oxford Martin School with a doctorate in politics from the University of Oxford stated that from there, Savonarola launched an ugly campaign of public purification. He radicalized laws against sin, prostitution and homosexuality, and highlighted them by an act of intimidation that history still remembers as the Bonfire of the Vanities. He noted that similar, parallel uprisings played out across Western Europe: the Comuneros Revolt in Spain, the Grand Riot in Lyon, the Revolt of the Straccioni in Tuscany, the Pilgrimage of Grace in England and the German Peasants War. The German Peasant’s War was the biggest public insurrection Europe would ever see up until the French Revolution.
In hindsight, all fed on the same discontent. The distribution of gains and losses brought about by economic, social and technological upheaval was bitterly uneven. The strain of that contradiction, coupled with the availability of new technologies, mobilized indignation and gave it a powerful voice. That broke the bargain that held many communities together. Political analysts today are rushing to lay the same analysis upon our contemporary experience. A Renaissance lens could have brought this risk into focus much sooner.
Now, it sharpens the lessons. Ian Goldin and Chris Kutarna in recently published book entitled “Age of Discovery: Navigating the Risks and Rewards of Our New Renaissance” stated that, most urgent among them is that the very real and dramatic gains humanity as a whole has made over the past 25 years of opening and connecting up will be lost if we don’t help those who, so far, have been excluded. According to them, the hollowed-out middle needs to find its collective voice, roll up its sleeves and reshape society’s distribution of unwarranted gains and blameless losses. Or wait for the times to shape it for them. Renaissance Florence was famously liberal-minded until a loud demagogue filled in the majority’s silence with rage and bombast.
