ESL confronts Sugar Industry Group over unpaid debts

The Ethiopian Shipping and Logistics (ESL) blasts the Ethiopian Sugar Industry Group (ESIG) for unpaid arrears that the latter failed to pay. The state-owned logistics enterprise’s efforts to address the audit findings are commended by the Office of the Federal Auditor General (OFAG).

During the Public Expenditure Administration and Control Affairs Standing Committee hearing, which aimed to assess the performance audit report covering the previous two years, the logistics giant declared that the majority of the arrears that were expected to be settled by private and public organizations have been paid.

With the exception of a relatively small number of public entities, the management of ESL indicated that it has received the money that was referenced in the audit findings.

According to Berisso Amallo, CEO of ESL, ESIG, a state-owned producer and importer of sugar, is the difficult problem his company faces.

“One of the issues we observe is that the sugar Group refused to pay the arrears that they ought to have for the service we provided,” he stated emphatically.

The audit results related to ESIG were a unimodal service that ESL offers, according to Siraj Abdulahi, Deputy CEO for Maritime Service at ESL.

He clarified that the Ministry of Finance (MoF) had arranged a guarantee for ESIG about the payment on some of the services, saying that there was no disagreement between the two parties regarding this case.

“Disagreements exist on the amount of arrears that the group is supposed to pay us. Rather than going to ordinary court, we filed the lawsuit with the Attorney General to resolve the matter,” Siraj continued. The group has paid the amount that was given only this week, according to Berisso, “while there is also a huge sum we are expecting from ESIG.”

The audit findings state that ESL owes the group USD 323,000 and 48 million birr in arrears.

According to the CEO, his organization has a significant stake in Ethio Engineering Group (EEG), formerly known as MetEC. He stated that ESL and MoF are now discussing a solution to the matter.

According to the findings, EEG, a state-owned firm, was intended to pay USD 19.6 million and 757.1 million birr to the logistic enterprise.

The National Disaster Risk Management Commission owes ESL 148.8 million birr and USD 25.6 million in arrears; according to ESL’s CEO, talks with the MoF are underway to resolve this debt. During the meeting, the management reported that the majority of the audit’s findings, which included operational holes over the previous two budget years, had been fixed.

According to the CEO, most of the audit’s findings are acceptable; the majority has been resolved, and the remaining ones are being worked on.

The CEO stated, “We were able to use the audit findings as input to develop the reform that was completed and sent to Ethiopian Investment Holding, the higher body that oversees ESL.”

He said, “With regard to the operational gaps that were noted in the audit findings, it helped us to consider embarking on modernization.”

“We are implementing a digitalization framework to support our operations digitally, which is nearing completion for full implementation,” he stated.

The OFAG’s Auditor General, Meseret Damtie, emphasized that the company is a vital institution for advancing the national economy. She stated that many operational problems at ESL were discovered by the audit findings.

According to the ESL management’s answer, she appreciated their action if it was repaired in accordance with the recommendations.

“It has added value for the enterprise to improve its service and collection, as per their response,” she said in closing.

The company reportedly has arrears of about a billion birr, the majority of which has been collected, according to the results of a previous audit.