The National Bank of Ethiopia has enacted Offshore Account Opening and Operations for Strategic Foreign Direct Investment (FDI) Projects directive to allow certain strategic investment projects preferential treatment to Open Offshore accounts, to provide convertibility guarantees and to benefit from an increased debt-to-equity ratio.
The preferential treatment will only extend to eligible PPP investments in power generation and infrastructure; large mining projects with substantial export earning potential and other FDI projects deemed strategic by the board of the NBE.

By Muluken Yewondwossen
The state owned logistics enterprise, Ethiopian Shipping and Logistics (ESL), reveals that its revenue for the past budget year was hard pressed by waivers. The logistics mammoth now eyes to expand its profit by more than ten percent in the current financial year following moves made to combat the situation.
During the annual performance report presentation, Berisso Amallo, CEO of ESL, disclosed that waivers given to importers has hampered the revenue stream of the only deep sea vessel operator in the continent.
As implemented by law about 12 years ago, ESL was set as the sole operator of multimodal operation which gave the enterprise dominance over the major share of imported items as the rule allowed.
However, the recent experiences mainly in the 2022/23 budget year, the revenue of the state logistics giant, which is one of the most profitable public entities, had back peddled.
In his address at the press conference, Berisso cited that as per the information from Ethiopian Customs Commission Djibouti branch in the budget year, over 7.4 million metric tons of containerized and non-containerized dry cargo was imported and of that 6.26 million tons was managed by a unimodal whereas the balance, 1.14 million tons, which is about 15 percent was transported on multimodal.
From non-containerized cargo that was 5.15 million metric tons, 19.9 percent was fertilizer, 15.7 percent wheat, 8.3 percent steel, and 56 percent other cargos.
In the year 179,036 TEU containerized import cargo had been transported. From the stated amount, 52 percent was handled by the multimodal scheme while the remainder was imported through unimodal.
A year ago, ESL’s containerized cargo fleet was 116,000, which is a share of 66 percent of the total containerized import of the country.
In the year, ESL has handled over 2.96 million tons of dry cargos import of which 41.1 percent was containerized cargo.
In the 2021/22 budget year, in total, 7.2 million metric tons of cargos shipment was managed through different operations including vessel, inland, freight forwarding and port and terminal services.
The ESL report indicated that from the total non-containerized cargo ESL took only 34 percent of sea freight, “The main reason for that is that import cargos source from Djibouti is increasing and expansion of import cargos through waiver similarly was on a high.”
Similarly, ESL had a share of 55 percent on containerized cargo. Regarding export ESL handled 30 percent of 922,858 tons of outgoing cargos, which is not part of the multimodal scheme.
According to Berisso, the waiver issue was resolved at the end of the budget year and now cargos are channeled through the multimodal scheme which is fully controlled by ESL.
“We have discussed and solved the issue and I think the current budget year, such issues will not bother us,” the CEO said.
The Ethiopian Maritime Affairs (EMA), which is the sector regulatory body under the Ministry of Transport and Logistics, is the entity which had given waivers, which had pinched and disappointed the logistics enterprise.
Experts in the logistics sector said that the sole vessel operator in Africa needs the government’s strong backing to keep its position at the global stage. Huge vessel operators globally have similar government privileges that run with the highly competitive industry.
Early this year, the national flag carrier expressed its disappointment with the permission of reckless waivers which threatened its existence.
The logistics giant and multimodal monopoly said that the behavior of giving waivers to some investors was endangering the enterprise’s identity.
Its former CEO, Roba Megerssa, in January said that most of the projects carried out by the Chinese companies have a leverage of waivers that ought to be corrected, and further cited that if this is not changed, the activities of the logistics firm will be hampered to a high degree, “Waivers are posing to be of huge impact to our operation and performance.”
“If the waiver permission is not managed properly, the performance of the enterprise, the country’s long established vessel ownership and its flag carrier may be endangered,” Roba expressed his concern at the time.
ESL claimed that EMA gave permits without its mandate which ought to be correct.
According to ESL officials, giving a waiver is considered as empowering the private sector since EMA’s project offices are supported by international partners who consider the role of the private sector as integral. As a result, the scheme was also enlarged to give permits for waivers to private companies including foreign vessel operators.
ESL had filed its case to the Ministry of Finance and the Ethiopian Investment Holding, a parent enterprise of ESL.
According to the free on board (FOB) directive that was issued in 2021, waivers were to be given with the consent of the carrier.
ESL officials also claimed that the commercial banks who assigned foreign contractors for their skyscraper headquarter building project were not using ESL for their project import.
As the law dictates through the FOB directive article 4.1, import goods and importers are obliged to make use of the FOB terms for dry and liquid bulk cargos, steel, vehicle, containers, break-bulk cargo contained in bags, drums, boxes and project goods procured and imported by government agencies or private enterprises; while aid cargos whose transport cost is covered by the Government; project cargo and inputs whose purchase price is partially covered by the government; goods required as an input to produce products by foreign investors for the domestic market.
Article 4.1.E added that the Authority may decide shipments having unique characteristics like fuel to be treated under the waiver system if the situation dictates so.
Under article 13 states the precondition for acquiring waivers while sub article one states that goods or part of goods which shall be transported on FOB term according to the FOB directive may be permitted by the Authority for one time or limited period of time or specific shipments to be transported on INCO terms other than FOB and/or any other carriers.
Berisso told Capital that starting from May, issuing of waivers was suspended, and such moves were expressed by the CEO to big up the performance of the company.
ESL Performance
In the budget year that will end early next July, ESL has targeted to secure over 6.7 billion birr profit before tax which is a 10.5 percent increment compared with the 2022/23 budget year.
Berisso said that if the peace situation was to smoothly continue, the enterprise will be able to generate a profit of more than the current estimation.
“The peace deal in connection to the conflict in northern Ethiopia is vital for the logistics sector and at large in the stability of other regions, which shall improve our operation,” he said.
He recalled that in relation to the northern Ethiopia conflict that was followed by pressure from the western countries led to ESL’s operation to be affected.
Regarding the 2022/23 budget year performance, Berisso stated that the global logistics logjam that was aligned with the Ukraine-Russia conflict and outbreak and recovery from COVID 19 were some of the challenges in the maritime sector.
“Container shortage, sea freight fare volatility price fluctuation, ports congestion that is aligned with the global pandemic and instability in the country are further challenges in the shipping industry,” he added.
Regarding operation services, the enterprise had projected to attain 5.95 million tons, while the actual performance was 102 percent or over six million tons.
From the operation service, the shipping service, which is undertaken through its own vessel, slot carrier and charter, had enabled to manage to transport almost 4.1 million ton that was 105 percent of the target.
Through freight forwarding services, it attained the transportation of 92,144 TEUs on multimodal scheme which was 114 percent of the target whilst it handled over 3,600 vehicles at below three tons on the same transporting scheme.
The unimodal service also supported ESL to transport almost 1.7 million ton import and 281,333 export cargo on its freight forwarding wing of business.
From its vessel, inland, freight forwarding and port and terminal services it secured 42.73 billion birr, which was over 90 percent of the target from its 47.29 billion birr projection.
ESL had generated 51.4 billion birr in revenue in the 2021/22 budget year.
In the year the company secured a profit of over six billion birr at a performance of 112 percent compared to its projection for that year.
Meanwhile the total revenue showed reduction compared to the preceding year where the profit before tax had increased by 7.44 percent compared to the 5.64 billion birr secured a year ago.
Regarding foreign currency, Berisso said that USD 400 million was secured which was 87 percent of the target, “We hope it will be expanded in the coming years.”
New venture
The newly expanded business which ESL sees a prospectus in is cross trade. Since the cross trade had mushroomed in the 2021/22 budget year, vessels operating under ESL had become profitable and most importantly in generating significant amounts of foreign currency.
Berisso said that through cross trade it was projected to handle one million metric tons of cargos in the year whereas the actual performance realized was over 100 percent which was 1.23 million metric tons.
Cross trade which is one of the major sources of hard currency for ESL has now increased in contrast to the preceding year which was 1.05 million metric tons.
At the stated budget year, ESL vessels docked their anchorage at Massawa, Berbera, Mombasa and other ports. As a target ESL has set a vision to expand its service on cross trade with the increment of suitable vessels.

By Muluken Yewondwossen
Addis Ababa City Roads Authority (AACRA) receives its highest funding injection ever from the Road Fund for the maintenance of roads this budget year. The Road Fund targets to boost funding courtesy of higher resource mobilization of over 250 percent, in contrast to the preceding budget year.
As Moges Tibebe, Director General of AACRA disclosed to Capital, for the current budget year, the metropolitan authority has secured close to a billion birr from the Road Fund.
“This year’s allocation has shown significant progress and increment to reach 960 million birr which is a record high compared to the 495 million in the past budget year,” he cited.
In the past couple of years the fund secured for road maintenance from the Road Fund has shown visible increment. For instance, last year’s allocation was 495 million birr which was an increase of 291 percent in contrast to a 170 million birr funding for the 2021/22 budget year.
This year’s allocation has also seen a rise of 194percent compared to the 2022/23 budget year amount.
“Despite the resource secured from the fund showing significant increment every year, it is yet to be fully sufficient since the demand is very high,” Moges described the gaps, adding, “As per our evaluation, 400 km of road infrastructure in the city still needs maintenance.”
As a roads authority, AACRA conducts routine maintenance every year with periodic maintenances also conducted every five to seven years.
There are also rehabilitation and overlay projects for roads with the lifespan of eight to 10 years, “However, we are not working on that because of limited resource allocated for maintenance.”
Most of the roads in the capital are over aged. As a result, every time we carry out priority road conditions survey and based on the data, we plan for the rehabilitation project of roads at different sets of priority,” the Director General highlighted.
As the survey indicates, over 300km asphalt roads need rehabilitation work, but in the budget year AACRA will only be able to maintain 102km of asphalt road.
According to Moges, for other road infrastructures, 800 km of maintenance will be conducted in the budget year.
In the 2022/23 budget year, AACRA had carried out 1,014 km road projects, inclusive of maintenance.
Currently, AACRA has 528 projects out of which 54 are asphalt road projects.
Road sector development is one of the priorities for Addis Ababa City Administration. From the total 140 billion birr approved budget for 2023/24 budget year, AACRA secured 11.6 billion birr or almost 8.3 percent of the total budget.
As Moges explained, in the past five years, 82 asphalt road projects have been accomplished, which indicated that the city administration gave sensible attention to the sector development.
In the coming ten years, AACRA needs USD 9.5 billion for road sector development that is also use alternative to meet with the demand through different initiatives including public private partnership.
Road Fund which is under the Ethiopian Roads Administration (ERA) as a directorate which started in February 2022 in order to mobilize funds mainly from the levy imposed on fuel and lubricants and other sources and penalties on the aim to support the road sector rehabilitation.
The information that Capital obtained from ERA indicated that in the 2023/24 budget year, the Road Fund has targeted to mobilize 18.5 billion birr, which is up 250 percent compared to the 7.4 billion birr achieved in the 2022/23 budget year.
Increment in tariffs and improvement in some operations has been underlined as a reason for this huge resource mobilization plan.