By Muluken Yewondwossen

In response to the logistical challenges plaguing the traditional trade routes through the Red Sea and Gulf of Aden, Ethiopian freight operators are increasingly turning to the Mombasa route as a viable alternative. Despite initial concerns from logistics operators, recent months have seen a surge in the use of Mombasa Port in Kenya, signaling a significant shift in Ethiopia’s freight transportation landscape.

The catalyst for this shift stems from delays experienced by inbound and outgoing cargo at ports in Djibouti, attributed to vessel operators reducing their operations along the Red Sea route. With vessels navigating the Red Sea and Gulf of Aden facing security risks, including attacks by Houthi militants in Yemen, shipping corporations have been compelled to seek alternative routes to ensure the timely and safe delivery of goods.

Despite its higher operational costs compared to Djibouti, Mombasa has emerged as a preferred option for Ethiopian freight due to its relative stability and efficiency. Anteneh Alemu, CEO of Pave Logistics and Trading PLC, reports that approximately 15 trucks are now making the journey to Mombasa weekly, transporting goods vital for Ethiopia’s economy.

The Mombasa route has particularly benefited industrial hubs such as Hawassa, Bole Lemi, Debre Berhan, and Adama, where manufacturers rely heavily on timely imports of raw materials and exports of finished goods. By circumventing the delays and security risks associated with the Red Sea route, businesses operating in these industrial parks have been able to maintain steady production levels, contributing to Ethiopia’s economic growth.

However, navigating the bureaucratic landscape of cross-border trade poses its own set of challenges. Unlike the streamlined processes observed in the Djibouti corridor, transporters using the Mombasa route must contend with stringent permit requirements for each entry into Kenya. This bureaucratic burden not only slows down the movement of goods but also adds to operational costs, impacting the overall efficiency of freight transportation.

Industry experts emphasize the need for Ethiopia and Kenya to establish protocols aimed at facilitating smoother truck traffic along the Mombasa route. While operational one-stop shops in border towns like Moyale offer some respite, additional agreements are needed to streamline cargo movements and reduce paperwork. Efforts to bolster these facilities with pertinent agreements would expedite the movement of goods, benefiting both countries’ economies.

Despite the logistical complexities and increased costs associated with the Mombasa route, manufacturers are compelled to continue production to avoid idle labor forces. The economic imperatives of maintaining production levels outweigh the challenges posed by bureaucratic obstacles. However, ongoing efforts to address these hurdles, such as passport requirements and permit applications, are crucial for sustaining and expanding freight movements along this route.

As Ethiopia seeks to enhance its access to regional ports, including those in Kenya, it must prioritize efforts to improve cross-border trade facilitation. Collaborative initiatives between government authorities, industry stakeholders, and international partners are essential for overcoming existing challenges and unlocking the full potential of the Mombasa route. By addressing logistical bottlenecks and streamlining administrative processes, Ethiopia can capitalize on the opportunities presented by its evolving freight transportation landscape.

By Muluken Yewondwossen

The Ethiopian Securities Exchange (ESX), still in its developmental phase, is attracting both domestic and foreign investors as it strives to meet its capital-raising goals ahead of the recently updated deadline, according to sources. In a recent development, Siinqee Bank became the second equity acquirer, following Zemen Bank, with an agreement finalized on Thursday.

While these two firms publicly announced their involvement, additional investors have technically agreed to acquire stakes in the prospective securities trading platform. ESX is set to be established as a share company by the government in collaboration with the private sector, including international investors, in accordance with the capital market proclamation article 31.1.

The proclamation stipulates that the government and government-owned organizations’ combined ownership cannot exceed twenty-five percent of the exchange’s capital. However, if there is insufficient private sector interest, the government’s ownership can be increased to ensure the establishment of the exchange.

Key players such as Ethiopian Shipping and Logistics, Ethio Telecom, Ethiopian Insurance Corporation, Berhan Ena Selam Printing Enterprise, and Ethiopian Investment Holdings (EIH) have already committed as the first investors of ESX, signing agreements at an event held on October 3, 2023.

ESX has been actively engaged in a roadshow campaign since May of the previous year, exploring potential investors, including international entities. The capital campaign officially commenced in November, initially with a three-month timeline, which was later extended to March 29 due to the international holiday season.

Presently, Siinqee and Zemen banks have formally agreed to invest 50 million birr each. Moreover, additional prospective investors have indicated their willingness to purchase stakes in the trading platform, which aims to launch the secondary market by year-end.

Foreign investors have also shown keen interest in investing in ESX, as confirmed by information received from ESX. The founding CEO, Tilahun Esmael Kassahun, disclosed last month that FSD Africa, backed by the UK government, will also hold shares in the company.

ESX welcomes individual investors to participate in the capital raising, with the minimum investment set at 10 million birr and the maximum at 150 million birr. The government and public businesses are poised to become the largest shareholders, collectively contributing over 225 million birr from the expected total capital.

The ESX board of directors, led by Helawi Tadesse, has approved the mobilization of more than 906 million birr in equity. The exchange plans to manage various financial instruments such as Treasury bills, corporate bonds, interbank markets, REPOs, commercial paper, and stocks once operational.

Forecasts indicate a substantial increase in revenue for ESX, from 5.9 million birr in its inaugural year to 1.5 billion birr by 2033. The exchange is expected to turn a profit by 2028, reaching over one billion birr in profit by 2033.

Potential members of ESX include financial institutions, brokers, dealing members, investors, and non-trading members, with an anticipated 50 trading members. With assets totaling approximately USD 36 billion, founding investor EIH oversees 26 major public firms spanning various sectors, including transportation, banking, manufacturing, commerce, hospitality, and construction, notably including Ethiopian Airlines Group and Commercial Bank of Ethiopia.

By our staff reporter

Actors within the sector are urging African leaders to demonstrate their commitment to altering the current trajectory of delivering high-quality education to children. A recent study reveals that nine out of ten African children under the age of ten lack literacy skills and fundamental math comprehension.

African Heads of State and Government are being called upon to endorse and support foundational learning ahead of the African Union Year of Education. This call comes following a two-day meeting held in Addis Ababa earlier this week by African Youth Voices, Human Capital Africa (HCA), and the Association for the Development of Education in Africa (ADEA).

To address the learning crisis gripping the continent, leaders are urged to acknowledge its severity, develop a continental strategy, and allocate resources towards gathering data and evidence to inform effective policies and initiatives. Prioritizing funding towards proven methods would expedite progress and ensure that every African child has access to a top-notch foundational education.

Participants of the Human Capital Africa conference on foundational learning emphasized the importance of recognizing that by the age of ten, nine out of ten African children struggle with reading and basic math comprehension. This situation poses further declines in human capital for Africa. The summit also stressed the imperative for Heads of State to understand that failure to address the learning crisis would have disastrous consequences on secondary, postsecondary, and TVET education outcomes across the continent, severely limiting future employment prospects.

Furthermore, it was highlighted that neglecting the learning crisis could hinder the achievement of ten or more of the Sustainable Development Goals, exacerbating health outcomes, increasing youth unemployment, and deepening poverty. Additionally, it could impede the continent’s private sector growth by restricting access to skilled labor and obstructing the realization of the African Union’s Vision for the “Africa we want” by 2063.

Erastus Mwencha, speaking on behalf of President Joyce Banda and Chair of the HCA Advisory Board, emphasized the gravity of the situation, stating, “Even with our combined efforts and years of advancement, nine out of ten African children cannot read and comprehend a basic paragraph by the time they are ten years old.”

Representatives from the African Foundational Learning Ministerial Coalition attended the event, aiming to facilitate collaboration, knowledge sharing, and collective advocacy among African countries combating the learning crisis. Trevor Manuel, former South African finance minister and HCA advisory board member, stressed the importance of ensuring that education receives more than just passing mention at institutional summits, advocating for actionable plans with measurable impact.

Special guest of honor, President Sahlework Zewde of Ethiopia, highlighted the significance of education in her keynote address and acknowledged the prioritization of education by Heads of State and Government through the declaration of 2024 as the African Year of Education.

Oby Ezekwesili, CEO of Human Capital Africa, emphasized the crucial need for improved data utilization and evidence-based decision-making to ensure that government investments in education yield positive outcomes. Albert Nsengiyumva, ADEA Executive Secretary, emphasized the need for systematic implementation at scale to address the learning crisis comprehensively and effectively.