The inability of airlines to repatriate funds from ticket sales in Ethiopia is hindering the country’s economic growth and recovery, industry leaders warn.

As of June 2024, Ethiopia had $115 million in airline funds blocked from repatriation, the third highest amount in Africa behind only Algeria ($261 million) and the CFA Franc Zone countries ($140 million). This represents over 13% of the total $880 million in blocked airline funds across the African continent.

“The blocked funds issue is a significant constraint on our ability to invest and operate effectively in the Ethiopian market,” said Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East. “It undermines confidence, limits route network development, and reduces the economic benefits that aviation can deliver for Ethiopia.”

IATA’s latest industry forecast projects that African airlines will return to profitability in 2024, earning a collective net profit of $100 million. However, this equates to just 90 cents per passenger – well below the global average of $6.14 per passenger. Alawadhi noted that the blocked funds crisis in countries like Ethiopia is a major factor holding back the aviation sector’s contribution to economic growth across the continent.

“Aviation is a catalyst for jobs, trade, tourism and economic development. But we can only fulfill that potential if governments ensure airlines can repatriate their revenues without unnecessary barriers,” said Alawadhi. “Resolving the blocked funds issue in Ethiopia and across Africa needs to be an urgent priority.”

IATA’s Focus Africa initiative is working to address this challenge, along with other key priorities such as improving safety, infrastructure, connectivity, sustainability and workforce development. But Alawadhi warned that tangible actions from governments are needed to unlock aviation’s benefits for the continent.

“The solutions are clear. Now we need the political will from Ethiopia and other African nations to implement them. The prize of a growing, efficient and well-connected aviation sector is huge, but it requires meaningful collaboration between industry and government,” he said.

A new report from the United Nations Institute for Disarmament Research (UNIDIR) highlights the progress made by 12 African states in strengthening their national frameworks for weapons and ammunition management (WAM) over the past year.

According to the 2024 WAM Insight Update, by early 2024 a total of 15 countries, including 12 in Africa, had assessed and taken steps to enhance their WAM policies and practices using UNIDIR’s Reference Methodology for National WAM Baseline Assessments.

The report identifies 10 key functional areas for effective WAM, such as establishing national coordination mechanisms, developing legal and regulatory frameworks, and implementing measures to control weapons transfers, manage stockpiles, ensure accountability, and dispose of illicit arms and ammunition.

“Effective WAM can contribute significantly to conflict prevention, peace, and sustainable development across Africa,” said Theò Bajon, the report’s author and an Associate Researcher with UNIDIR’s Conventional Arms and Ammunition Programme. “We’ve seen meaningful progress in many countries, but challenges remain in areas like stockpile management and dealing with craft production and illicit trafficking.”

Some examples of national progress highlighted in the report include:

– Strengthened legal and regulatory frameworks

– Established or expanded national coordination mechanisms

– Adoption of operational solutions and community-based approaches

However, the report also notes persistent challenges in managing stockpiles, ensuring accountability through marking and record-keeping, and disposing of illicit arms and ammunition. It emphasizes the need for continued efforts to enhance national ownership and address emerging risks such as the spread of violent extremism.

“This is a long-term endeavor, but African states are demonstrating strong commitment to addressing the complex issues around weapons and ammunition management,” Bajon said. “With sustained support and integrated approaches, they can further enhance WAM and contribute to peace, security, and development across the continent.”

The 2024 WAM Insight Update is the third annual report produced by UNIDIR to track progress on WAM in Africa. The research was supported by the governments of Finland, Germany, and Switzerland.

While global trade has shown signs of recovery in the first half of 2024, the performance of Sub-Saharan African countries has remained disappointing compared to other regions.

According to the latest UNCTAD Global Trade Update, trade growth in Sub-Saharan Africa lagged behind the rest of the world in the first quarter of 2024. Exports from the region grew by only about 0.5% quarter-over-quarter, well below the 1% increase seen globally for goods trade.

“Sub-Saharan Africa has not yet been able to fully capitalize on the upturn in global demand,” said an UNCTAD economist. “Persistent challenges like infrastructure deficits, limited productive capacity, and trade frictions continue to constrain the region’s trade performance.”

One bright spot has been increased trade within the African continent, bolstered by the implementation of the African Continental Free Trade Area (AfCFTA). Intra-African trade grew at a healthy pace of over 2% in Q1 2024. However, this dynamic has not been sufficient to offset the region’s lackluster global trade figures.

Looking ahead, the outlook for Sub-Saharan African trade in 2024 remains cautious. The report notes that while global GDP growth is projected around 3% for the year, the economic growth forecast for Sub-Saharan Africa is only about half that level. This divergence is likely to keep a lid on the region’s trade expansion.

“Geopolitical tensions, rising shipping costs, and emerging industrial policies around the world pose broader risks to global trade that could disproportionately impact Sub-Saharan Africa given its relatively weak position in global value chains,” the UNCTAD economist added.

To boost trade, the report recommends that policymakers in Sub-Saharan Africa focus on improving trade-enabling infrastructure, supporting diversification into higher value-added products, and deepening regional economic integration efforts like the AfCFTA. Addressing these structural challenges will be crucial for the region to capitalize on the expected recovery in global demand.

National Insurance Company of Ethiopia S.C. (NICE), Ethiopia’s leading insurance company, has entered into an agreement with ARIMA, a global provider of insurance software based in Bahrain. This collaboration will enable NICE to upgrade its current system with the latest technology, significantly enhancing its service delivery.

Under this agreement, NICE will transform its existing system into a modern, technologically advanced platform. This upgrade will allow customers to apply for insurance from anywhere, whether in person or remotely, and streamline the claims process in the event of an accident.

A key component of this modernization is the implementation of SAP (Systems Applications and Products), a widely used enterprise resource planning (ERP) software. SAP will serve as a centralized system for NICE, allowing different departments to access and share data seamlessly. This integration is expected to create a more efficient and productive work environment for NICE employees.

The adoption of advanced technology reflects NICE’s commitment to improving customer experience and operational efficiency, positioning the company at the forefront of the Ethiopian insurance industry.