Ethiopia intends to import fertilizer via Kenya’s Lamu Port in the near future. A week ago, delegations tasked with assessing the situation were in Kenya. Ethiopia has indicated a strong desire to expand its port destinations beyond Djibouti, which already handles nearly all of its cargo. Even though the idea to use Lamu was proposed years ago, it has not been used up to this point. A portion of import exports has gone to the Mombasa port due to the security situation in the Red Sea and Aden Gulf since November of last year. However, compared to Djibouti, using Kenya’s largest port is more expensive because of its destination.

The team has seen the situation in Mombasa in addition to Lamu, based on the information Capital received from the Ministry of Transport and Logistics (MoTL). State Minister of MoTL Denge Boru stated, “The delegation has visited the port and road conditions up to Moyale, whether or not it is suitable for the operation.” The group will deliver their findings to the logistics committee, he continued. According to the proposal, part of the fertilizer cargo is to be transported through Lamu by the government. The State Minister informed Capital, “We will be using the port very soon.”

According to sources, top ESL officials who were part of the group declined to comment, but the mission, which included logistics specialists from several public agencies, including Ethiopian Shipping and Logistics (ESL), observed the situation there. He informed Capital, “We will disclose when we start the operation.” In addition to managing the majority of import and export cargo, the fertilizer fleet is managed by the state-owned logistics business, ESL. According to the proposal, the government intends to use Berbera Port in Somaliland as a substitute for cargo imports, primarily for the country’s east and southeast. To date, Ethiopia’s closest and most established port location that is also connected to an electric train is Djibouti.

In order to ensure a seamless operation, various paperwork and agreements between the two countries will need to be completed before the service is launched via Lamu.

Due to security concerns in the Red Sea, Ethiopian cargo is now handled through Mombasa despite the obstacles that separate it from Djibouti.

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.

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.

Djibouti’s regulatory body announced that non-vessel operating common carriers (NVOCCs) are not permitted to serve as multimodal operators in Djibouti, even though the Ethiopian government only approved the entry of three more participants a week ago.

For almost 13 years as a VOCC, Ethiopian Shipping and Logistics (ESL), a state-owned operator of deep sea vessels on the continent, has been the only multimodal. Recall that the Ethiopian government has authorized the participation of three more NVOCC operators in the scheme, in addition to the already established ESL.

However, according to a notice released on Sunday, March 17 by the Djibouti Ports and Free Zones Authority (DPFZA), the port authority that owns and oversees the logistics activity in Djibouti, a bill of lading (BL) issued by NVOCCs is not acknowledged within Djibouti Ports and Corridors due to their legal status.

Furthermore, the notification, which is signed by Aboubaker Omar Hadi, Chairman of DPFZA, states that NVOCCs may not guarantee the complete payment of logistics chain costs along the corridor, posting concerns regarding security, traceability, and accountability.

“In adherence to our regulations and policies, BLs issued by multimodal transport operators, specifically by shipping lines, are the only legally recognized documentation for cargo transport operations within Djibouti ports, free zones, and corridors,” the notice continued.

It emphasized the need for anyone working in the logistics industry to follow the rules.

The letter made it clear that “observing these guidelines is imperative for all entities involved in maritime transport and logistics activities to avoid any operational disruptions within Djibouti ports, free zones, and corridors.”

Experts predicted that the newly chosen multimodal transport companies would find it difficult to start their operations in light of the new notice.

Sources in Djibouti, however, voiced worry that it would have an impact on ESL activities, in addition to the three multimodal operators that were just chosen.

“ESL transports approximately 90 percent of its containerized cargo through slots operated by other vessel operators, so even though it is a VOCC, it also functions as an NVOCC,” they stated.

According to Capital sources, the Ethiopian Embassy in Djibouti has already notified the Ministry of Transport and Regional Integration of the issue by letter.

The ministry should form a technical committee to handle the issue with the Djiboutian side, as advised by the diplomatic mission.

The Djiboutian side did not send any formal letter to ESL, a senior official at the company said, adding, “as a result, we would not have any comment on the issue.”

Yared Shiferaw, a former head of ESL’s legal department and industry expert, said that ESL would not be concerned about the matter. Even if the majority of containers are moved by slot arrangement, it will not be a problem for ESL. “The two parties have an agreement,” he stated.

Yared noted that ESL was seen as multimodal operators during the 2006 negotiations with the Djibouti government.

He told Capital, “In the same token, it will be the Ethiopian government’s responsibility to solve the issue through their bilateral channel regarding the new players’ concern.”

The international marine lawyer said that since it is guaranteed by the Ethiopian government in a manner comparable to that which was provided to the ESL, the Djiboutian side would not be concerned. The industry experts stated, “The government granted these companies a license in accordance with the thorough assessment and based on their capability and extensive experience.”

“They express concern that cargo passing through the system unchecked poses health and security risks,” experts explained about the Djiboutian authorities’ concern.

According to the industry’s worldwide standard, if they have any suspicions, they can look into regular cargoes that arrive during normal business modalities, they added.

Panafric Global, Tikur Abay Transport, and Cosmos Multimodal Operation are the recently selected companies to operate under the multimodal scheme.

Tikur Abay operates by Amhara region administration, while Cosmos is formed by renowned logistics provider Tradepath International and Oromia region’s enterprise, Geda Transport.

One of the logistic firms in existence, Panafric has formed a partnership with a company of a prominent businessman.

According to industry analysts, the most recent action represents a significant turning point for the logistics sector.

The Accounting and Auditing Board of Ethiopia (AABE), in partnership with the Pan African Federation of Accounting (PAFA), convened a workshop aimed at enhancing quality assurance in accounting and auditing practices across Africa. The workshop, titled “Quality Assurance Review Workshop,” focused on elevating the standards and integrity of accounting and auditing systems on the continent.

During the workshop, it was emphasized that the adoption of a common guideline would standardize practices and ensure consistency in accounting and auditing standards across all African countries. The approval of a comprehensive manual on the final day of the forum is expected to facilitate the acceptance of accounting reports prepared by professionals in all African nations.

Hikmet Abdela, the Director General of AABE, highlighted the significance of the approved manual in enhancing the quality and integrity of accounting and auditing practices in Africa. He noted that Ethiopia has been engaged in evaluating audit quality for over two years, and the approved manual will contribute to raising standards across the continent.

Furthermore, the workshop addressed the importance of harmonizing professional qualifications to facilitate the free movement of accounting professionals within the African Continental Free Trade Area. According to Hikmet, this initiative enables auditors to work across borders seamlessly, benefiting both Ethiopia and other member countries.

The collaboration between AABE and PAFA underscores the commitment to establish a uniform system at the continental level. AABE has been an active member of PAFA for four years, collaborating with 37 professional accounting organizations from 34 countries to advocate for Africa’s economic interests and global strategy in accounting.

PAFA, established in Dakar, Senegal, on May 5, 2011, aims to unite African professional accountants and amplify their voice, particularly in international forums such as the International Federation of Accountants. Currently, PAFA counts Ethiopia among its member countries, along with Benin, Botswana, Burundi, Cameroon, Congo-Brazzaville, the Democratic Republic of Congo, Gambia, Ghana, Guinea-Bissau, Ivory Coast, and Kenya.