The Danish logistics giant, Maersk has introduced new schemes as of Friday February 1, on unloading services at the port of Djibouti which will impose additional charges on Ethiopian cargo.
The company, which is one of the logistics partners for Ethiopian cargo announced that it has applied Recovery for Handling Imports (RHI) on incoming containerized cargos arriving at Djibouti. Based on this new rule imported cargos will be charged USD 133 and USD 166 for every 20 foot and 40 foot container respectively.
In its announcement Maersk stated “to ensure continuity of the Maersk service standards and maintain exceptional customer experience in Djibouti, we would therefore like to inform you of the need for recovering part of the cost associated with the terminal operations of loading and unloading containers from vessels.”
As a result, the company said that effective February 1, 2019, Maersk Djibouti SARL will start invoicing as part of the local charges to its customers a new line item referred to as “Recovery for Handling Imports or RHI”, which will be applied to all containers discharged from that date. “The recovery for handling will be applied only for imports and will be on a per container basis,” it stated.
Experts in the sector said that the additional cost on imported goods will be another burden for the country particularly the end users in Ethiopia, which is the main port user in Djibouti.
Daniel Zemichael, a logistics expert and owner and Chief Executive of Freighters International Plc, told Capital that these types of charges are common in the global logistics sector. He said that carriers or liners like Maersk paid at the port in Djibouti and now the liner has transferred the cost onto the customers.
“It is international trade but it is a high rate for Ethiopia that may affect the market locally,” he said.
Experts in Djibouti stated that the international liner should give an explanation for its surprise additional tariff to its customers who use ports in Djibouti. An expert at one of the ports in Djibouti said the price increase by Maersk is occurring without any tariff change at the ports in Djibouti.
In its statement Maersk said that the recovery for handling will be applied for imports from the rest of the world into Djibouti and invoiced as RHI; the recovery for handling will be collected in Djibouti for all imports, “the recovery for handling is a pure pass-through charge at cost and not intended to be used for profit increase beyond the cost levels. Neither is it an effect of any new increase in government fees.”
“We would request your understanding and cooperation to join our efforts in ensuring future container shipping investments to meet the rising needs of both Djibouti and Ethiopia,” it added.
According to the announcement the rates are also subject to other applicable surcharges, OF (Ocean Freight), OHC (Origin Terminal Handling Charge), DHC (Destination Terminal Handling Charge), ERS (Emergency Risk Surcharge), SBF (Standard Bunker Adjustment Factor), LSS (Low Sulphur Surcharge) and PSS (Peak Season Surcharge), including local charges and contingency charges.
Maersk adds fee for cargo docking in Djibouti
FBI questions AG’s pause of tax investigation
The Federal Bureau of Investigation (FBI) of the Federal Police says they oppose the Office of the Attorney General’s (OAG) decision to freeze an ongoing investigation of 33 grade one contractors. In a letter written to the OAG’s Economic Crimes Department, police stated that the order will affect police operations.
Previously the OAG sent a letter to the FBI saying that the grade one contractor’s association wrote Birhanu Tsegaye, Attorney General stating that the association was addressing the problem.
A letter signed by Fuad Kiyar, the Director of the Economic Crimes Division at the OAG, stated that talks are underway with higher officials to solve the issue.
He also passed an injunction for police until the process is completed.
“We are working towards a solution and until authorities pass the final decision, the investigation should be paused and we kindly ask police to send the necessary data it has about the investigation,” reads the letter.
The OAG also asked for the details of the FBI’s investigation. The letter asks for data including the name of the companies under investigation, paid amount by each company and if there is an unpaid amount and the stage that the investigation of every file is in. Police responded that they have sent many files finalizing its investigations to the prosecutors and issues related with the paid or unpaid tax the Ministry of Revenue (MoR) should held accountable for.
In its final remarks, the letter reflected that the investigation must pause until the attorney general passes the final decision.
Birhanu Abate, director at the FBI Tax and Customs Directorate, responded by saying that police would pause the investigation with reservation.
Police asked the OAG 13 questions. They feel the action is unusual and doesn’t benefit anyone.
The files were closed without an investigation via an order by the former director at the FBI.
The FBI said if cases are going to be interrupted when there are accusations of illegal receipt holding, the wrong message will be sent to taxpayers. As the foreign contractors who are being investigated for the same reason are being treated differently then it will seem that the rule of law is not being enforced. The letter went on to say that other levels of contractors or taxpayers should be allowed to benefit from similar decisions as a principle.
Police also mentioned that the letter sent from OAG contains contractors who are not under investigation, which needs to be explained.
The FBI argued that this sets a bad precedent for similar cases. The investigation was based on the audit report of the former Ethiopian Revenue and Customs Authority (ERCA).
“There are various audit reports that the Ministry of Revenue is sending to us now and we don’t know if we are going to continue our investigation or not,” Birhanu Abate told Capital.
The letter also stressed that giving a decision in general and not seeing specific cases is unjust.
In a letter written to the Attorney General from the economic crime’s directorate, the director recommended that application of the contractors should not be considered in general terms and that it would be better if they could apply individually.
Police noted that any administration decisions given by the Attorney General should not override the laws of the nation, stressing the decision to interrupt or to pause must be given carefully.
Another issue raised was that the case was reopened after one person decided to close it. The police used the recent MeTEC case as an example of how individual decisions without oversight were subject to serious mistakes.
They recommended that talks be held to hear every side of the story.
The police added that the cases under investigation don’t only concern the cases of illegal receipts, but various tax evasion crimes.
Procurement delays cut wheat flour supply by 50 percent
A delay in a two million ton procurement from abroad is harming the supply of wheat and wheat flour for the nation’s bakeries and flour companies.
Bakeries which were receiving 168,000 quintals under normal circumstance are now getting less than 83,000 quintals.
Last Thursday, Shoa Bakery and Flour Factory PLC, which has 16 branches in Addis Ababa and employs 1,150 people, surprisingly hiked its prices. Because they received less wheat flour they increased the price of 100 grams of bread from 1.30 birr to 2.50 birr. Shoa’s 300 grams of bread now costs seven birr.
The Addis Ababa Trade Bureau responded to the problem and gave Shoa their full quota of bread so they resumed to their old prices. Solomon Bekele, the Basic Commodity Distribution head at the Bureau told Capital that the full quota will be applicable when the procured wheat reaches the city.
“Wheat shortages have been a normal situation for a couple of years but to get into a sustainable position we must upgrade local products,’’ he said.
The Ethiopian Grain Trade Enterprise (EGTE) which distributes wheat to nine regions and two administrations is running out of stock and has not given any wheat to flour companies. They said the shortage occurred due to delayed procurement of wheat from abroad.
The Enterprise had been distributing 640,000 quintals of wheat every month to trade bureaus, universities, and prison administrations.
Under normal circumstances Oromia received 125,305 quintals per month while Amhara, and Tigray received 72,550 quintals, 66,417 quintals respectively.
Ethiopian Somali received 21,716 quintals while Afar and Gambela, Beneshangul received 20,875 quintals 20,700 and 20,001 quintals of sugar per month respectively.
The supply in all regions has been cut by more than 50 percent.
Recently Capital reported that the Addis Ababa Trade Bureau in response to complaints from bakeries regarding the price of bread made a study and brought it to the Trade and Industry Minister to adjust the price slightly.
The study which took into consideration the current inflation, the recent devaluation the birr, the price of input materials and the cost of labor and transport recommended increasing prices up to 80 cents. This would mean that 100 grams of bread which is currently sold at 1.30 birr will be sold at 1.50 birr while 200 grams will go for 2.50birr and 300 grams will be sold for 3.80 birr.
More palm oil importers approved
The Minister of Trade and Industry is selecting additional palm oil importers through the respective regional trade and industry office and the two City Administrations.
The new directive has been sent to the respective trade and industry offices to select the potential importers based on strict criteria.
“The Ministry gave the mandate to select capable importers and send them to the Trade Office in the name of transparency,” Wendemu Flate Communication Director of the Ministry told Capital.
Some of Trade and industry offices already began selecting importers based on the given criteria.
Currently five private companies are importing palm oil; AHFA PLC, Biftu Adugna Business S.C., Al-Sam International, Belayneh Kindie Import & Export (BKIE), and Hameressa Edible Oil S.C.
Moreover, the so called endowments such as Wendo Trading & Investment Plc, Guna Trading House Plc and Ambassel Trading House Plc, will also join the business. Alle Bejimla, the state-owned wholesaler, will also take part in the import.
“The assumption behind choosing those importers is on the consensus to build an edible oil factory and substitute imports,” Wemdimu said.
However no effort has been made so far to build factories in any of those endowments even though little progress has been witnessed in some of the private companies.
Ethiopia mainly relies on imported palm oil from countries like Indonesia, Malaysia and Singapore in order to satisfy its edible oil consumption.
Palm oil covers 96 percent of the total consumption while only four percent of it is covered by a few domestic manufactures with low level of production capacity and other importers.
Last fiscal year, Ethiopia imported 73,434 liters of palm oil according to the data from Minister of Trade and Industry.
