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ESL pushes ahead with fleet expansion as record profit fuels 200 billion birr capital plan

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ESL pushes ahead with fleet expansion as record profit fuels 200 billion birr capital plan

Ethiopian Shipping and Logistics (ESL) is forging ahead with an ambitious expansion plan to acquire six new vessels and increase its capital tenfold to 200 billion birr. This move is buoyed by record profits, despite a year marked by regional conflict, higher operating costs, and disruptions to global shipping.

The state-owned logistics company is boosting its capital from 20 billion birr to 200 billion birr while simultaneously advancing a procurement program designed to strengthen Ethiopia’s maritime transport capacity.

During the company’s annual performance briefing on Thursday, CEO Abdulber Shemsu stated that both the capital increase and vessel acquisition are progressing concurrently, although the procurement process has taken longer than initially anticipated.

“Vessel procurement follows public procurement procedures, so it has its own timeline,” Abdulber explained. “There have been some delays, but the process is progressing.”

The decision to significantly increase the company’s capital stems from Ethiopia’s shift to a market-based foreign exchange system, which substantially boosted the birr value of ESL’s foreign currency assets. Industry experts informed Capital that the sharp depreciation of the birr over the past year significantly expanded the company’s balance sheet, prompting management to revise its initial capital plan.

This foreign exchange reform has also yielded substantial accounting gains. ESL earned approximately 14 billion birr in non-operating income from its foreign currency assets during the first year of the reform in 2024/25. In the fiscal year that concluded earlier this month, the company generated an additional 2.7 billion birr from similar foreign exchange-related gains.

Concurrently, the company is accelerating its fleet expansion plans. Earlier this month, a technical delegation led by Abdulber traveled to China to negotiate the purchase of second-hand vessels and contracts for newly built ships.

“The discussions covered both used vessels and the construction of new ones,” he told Capital.

ESL currently operates 10 ocean-going vessels, including nine multipurpose handysize ships. Under its expansion strategy, the fleet is projected to grow to 16 vessels by 2030.

The procurement plan includes one second-hand container ship with a capacity of 3,000 to 5,000 TEUs, three second-hand Ultramax bulk carriers with carrying capacities of 60,000 to 65,000 deadweight tons, and two newly built heavy-lift Ultramax multipurpose vessels of similar capacity. While the second-hand vessels are expected to join the fleet once suitable ships are identified, the newly built vessels are likely to take at least two years to complete after contracts are signed.

The expansion follows one of ESL’s strongest financial performances in company history.

According to its unaudited annual report, ESL generated 157.2 billion birr in revenue during the 2025/26 fiscal year, transporting over seven million metric tons of cargo and exceeding its annual target by eight percent.

Net profit reached 25.4 billion birr, a 33.7 percent increase over the company’s target and approximately 45 percent higher than the previous fiscal year. Foreign currency earnings also rose to USD 551 million, roughly USD 50 million more than the previous year.

Abdulber attributed the improved performance to a strategic shift, with the company prioritizing higher-value cargo over simply increasing cargo volumes.

“We are giving priority to high-value cargo such as construction equipment and industrial machinery,” he stated.

These results were achieved despite one of the most challenging operating environments the company has faced recently.

One ESL vessel was stranded in the United Arab Emirates for over four months due to disruptions linked to tensions around the Strait of Hormuz. Fuel shortages, volatile fuel prices, rising insurance costs, and severe congestion at Djibouti’s ports further strained operations as more ships diverted from Gulf ports due to regional instability.

Consequently, the company’s operating expenses climbed to 124 billion birr, nearly 10 percent higher than the 113 billion birr originally budgeted for the year.

ESL is also closely monitoring the deteriorating security situation in the Red Sea and wider Middle East, where attacks on commercial vessels continue to pose risks to international shipping.

Abdulber noted that the company is evaluating whether to introduce feeder services in the region or reroute vessels on longer voyages, depending on the evolving security situation.

“Our priority is to ensure Ethiopian cargo continues moving without interruption,” he emphasized.

He added that Ethiopian-flagged vessels have continued operations even during previous periods of heightened regional tension, including regular calls at Khor Fakkan Port in the United Arab Emirates.

Looking ahead, ESL has set ambitious targets for 2030, planning to generate 350 billion birr in annual revenue and USD 2 billion in foreign currency earnings, while increasing annual cargo throughput to 18.4 million metric tons. The strategy also includes expanding its container fleet to 100,000 units, reinforcing the company’s role as Ethiopia’s main maritime gateway.

Ethiopia should expand the tax base, not squeeze the same taxpayers harder

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Ethiopia should expand the tax base, not squeeze the same taxpayers harder

Ethiopia’s fiscal debate has become dangerously familiar: whenever revenue falls short, the easiest answer is to ask the same formal businesses and salaried workers to pay more. That approach may deliver a short-term boost, but it is not a strategy for a growing economy. If Ethiopia wants a fairer and more durable tax system, it must broaden the tax base rather than keep squeezing the few taxpayers already in the system.

The problem is not that Ethiopians do not pay taxes. The problem is that too few people and firms are actually in the net. A small formal sector carries a burden that should be shared more widely across the economy. Registered companies, payroll employees, importers and compliant professionals are relatively easy to monitor, so they become the default source of revenue. Meanwhile, a huge informal economy, under-declared income, weak property taxation and limited enforcement allow large parts of economic activity to remain untaxed or lightly taxed.

That imbalance is not just unfair. It is economically harmful. When the same taxpayers are repeatedly targeted, compliance becomes harder, investment slows and trust in the system erodes. Businesses begin to feel that honesty is punished and informality is rewarded. Over time, the state risks creating a tax culture based on resentment rather than citizenship.

The first step toward reform is to accept a simple truth: revenue growth must come from inclusion, not only from higher rates. Ethiopia has room to bring more people and activities into the tax system. The informal sector is large. Urban property remains under-taxed. Digital commerce is expanding faster than the tax administration can track it. Agriculture, where many households generate income, is still poorly integrated into the tax net. These are not minor gaps; they are the heart of the problem.

Expanding the tax base does not mean punishing the poor or taxing subsistence livelihoods into distress. It means identifying where genuine commercial activity is happening and designing sensible, phased taxation that is practical to collect. Small traders, transport operators, professionals, service providers, landlords, and growing enterprises should gradually be drawn into the formal system through simpler rules, lower entry barriers, and better administration. The goal should be to make tax participation normal, not extraordinary.

One of the most effective ways to broaden the base is through formalization. When businesses register, they become visible. When they use digital payments, they leave a trail. When they access credit, public procurement or licenses, compliance can be linked to those benefits. Ethiopia should use this leverage more intelligently. Rather than relying only on penalties, the government should connect tax registration to concrete advantages: easier access to finance, faster licensing, better legal protection and eligibility for public contracts.

Property taxation is another major opportunity. Cities are growing, land values are rising, and urban expansion is creating wealth that often escapes effective taxation. A serious property tax system would be far more sustainable than repeatedly increasing pressure on the same payroll taxpayers. It would also help local governments fund services more fairly, especially in rapidly urbanizing areas.

The digital economy also needs to be brought into the fold. As more transactions move online, tax authorities should improve data matching and electronic invoicing. This is not about surveillance for its own sake. It is about making tax collection match the way the economy actually works. If businesses can sell digitally, they can report digitally. If payments are traceable, taxes should be too.

At the same time, Ethiopia must simplify its tax system. A complex tax code often helps only the well-resourced, who can hire experts to navigate it, while discouraging small firms from entering the formal economy. A simpler structure with clear thresholds, predictable obligations and fewer loopholes would improve compliance. Tax policy should be understandable to the ordinary entrepreneur, not only to accountants and lawyers.

Equally important is trust. Many citizens and businesses resist taxes not only because of cost, but because they doubt the value they receive in return. If taxpayers see visible improvements in roads, electricity, security, schools and public services, compliance becomes easier to justify. The state must therefore pair tax reform with better service delivery and greater transparency on how revenue is spent.

Enforcement still matters, of course. A broadened tax base cannot rely on goodwill alone. High-earning individuals, large informal businesses and those hiding income should face real consequences. But enforcement should be targeted and intelligent, not blunt and politically easy. It is far more productive to catch big evaders than to keep revisiting the same formal taxpayers with new levies.

Ethiopia’s economic future depends on moving from a narrow tax culture to a broad fiscal compact. That means more taxpayers, not just heavier taxes. It means fairness, not fatigue. It means treating tax reform as a nation-building project rather than an emergency revenue raid.

If the government keeps squeezing the existing base, it will eventually weaken the very sector it depends on for growth. But if it expands the base, formalizes more of the economy and builds trust in the system, it can create a stronger state and a healthier private sector at the same time.

The choice is clear: Ethiopia should tax more people a little, not the same people to death.

Africa’s youth are more hopeful, but demand jobs and accountability

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Young Africans are more optimistic about their future than at any point since the Covid-19 pandemic, but they are also making clear that hope alone is not enough. A new continental survey shows a generation that believes in Africa’s potential while demanding jobs, cleaner government, safer communities and a political system that reflects African realities.

The 2026 African Youth Survey, released on 29 July in Johannesburg, found that 47 percent of young Africans now say their country is moving in the right direction, up from 30 percent in 2024. Confidence in national economies has also improved sharply, with 45 percent saying their economy is on the right path, compared with 26 percent two years ago. Across the countries tracked in every wave of the survey, 43 percent now say Africa is moving in the right direction, up from 37 percent in 2024.

The survey, commissioned by the Ichikowitz Family Foundation and conducted by PSB Insights, interviewed 4,901 people aged 18 to 24 across 16 African countries in March 2026. It is the largest edition of the survey since it was launched in 2020 to capture the views of Africa’s younger generation.

Despite the improved mood, the cost of living remains the biggest concern. Respondents said rising living costs have had the greatest impact on Africa over the past five years, ahead of political instability, deaths from infectious disease and the technological revolution. When asked what Africa most needs to move forward, 27 percent said the priority is creating well-paying jobs, while 25 percent pointed to reducing corruption in government.

The survey also found that young Africans are still strongly attached to democracy, but they want a version that works in African conditions. Seventy-three percent said democracy is always preferable to any other form of government. At the same time, 56 percent said Western-style democracy is not suitable for Africa and that a new African model is needed.

The report showed a similar pragmatism in foreign policy attitudes. Seventy percent of young Africans said the world is becoming more divided and dangerous, and 55 percent said their countries should prioritize partnerships with countries that can deliver practical benefits such as trade and investment, regardless of political system. By contrast, 42 percent favored alliances based on shared values, even if those partners are less effective.

Ivor Ichikowitz, founder and commissioner of the survey, said the improved outlook should not be mistaken for satisfaction. He said young Africans still believe in the continent, but are no longer willing to accept endless speeches without delivery. He said they want jobs, clean government, safety, business opportunities and a real voice in power.

The findings suggest that youth are not rejecting democracy, but are demanding a more effective version of it. Among the priorities they identified for such a model were national unity and stability, regular free and fair elections, leaders who deliver jobs and services, and greater community participation in decision-making.

The report also found that young Africans see economic and social conditions as central to security. While 70 percent said they feel safe in their country today, unemployment and poverty were identified as the biggest threats to safety in local communities. Asked what governments should do to improve security, 56 percent chose youth job creation, ahead of military spending and anti-corruption measures.

The continental picture, however, remains uneven. Rwanda recorded the strongest confidence in national direction, with 91 percent saying the country is moving the right way. Somalia also emerged as a notable positive case, with 82 percent saying the country is on the right track and 79 percent saying the economy is moving in the right direction.

Ghana, Ethiopia and Zambia showed the largest rebounds in confidence since 2024. In Ethiopia, concern about employment fell sharply and positive sentiment about the country’s direction rose significantly. By contrast, youth in Kenya, South Africa, Mozambique, Chad and Nigeria were among the most pessimistic about national direction, the economy and the wider global outlook.

The survey also showed that young Africans are paying close attention to global power shifts. The United States and China remain the two most influential external powers in their eyes, but China is viewed more positively by those who see its influence. Young respondents also said they would prefer leaders who can work with major powers to deliver tangible gains, while remaining wary of external partners that do not respect Africa’s interests.

The results point to a generation that is hopeful, but impatient. It wants economic progress, clean governance and a more authentic democratic model. Above all, it wants leaders who can turn optimism into action.

NBE bars former Global Bank CEO Tesfaye Boru for five years

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NBE bars former Global Bank CEO Tesfaye Boru for five years

The National Bank of Ethiopia (NBE) has barred Tesfaye Boru, former Chief Executive Officer of Global Bank Ethiopia (GBE), from holding senior leadership roles in any financial institution for five years, citing repeated regulatory violations.

In a letter dated July 29, the central bank confirmed that Tesfaye was removed from his position following a special inspection of GBE. The review assessed the bank’s corporate governance, lending and credit administration practices, human resource management, foreign exchange operations, and overall financial management.

According to the NBE, the inspection revealed multiple deficiencies and breaches of both regulatory directives and the bank’s internal policies, which it said undermined the institution’s sound operations.

“The findings were subsequently discussed with the bank’s Board of Directors and senior management, where broad agreement was reached regarding the issues identified,” the central bank stated.

GBE later submitted a detailed response along with a corrective action plan addressing the identified shortcomings. However, the NBE said the severity of the findings, combined with Tesfaye’s prior regulatory record, warranted stronger enforcement action.

Citing earlier written warnings issued in May 2021 and November 2024, the central bank invoked Article 20(1) and (2) of the Banking Business Proclamation No. 1360/2025 and Article 10 of Directive No. SBB/89/2024 to justify its decision.

“Accordingly, based on the findings of the inspection, as well as the previous written warnings … you are removed from your position as Chief Executive Officer of GBE effective July 28, 2026,” the letter read.

In addition to his removal, Tesfaye has been prohibited from serving as a board member, chief executive officer, or senior executive in any financial institution operating in Ethiopia for five consecutive years, effective from July 28, 2026.

The regulatory action follows his dismissal by GBE’s Board of Directors last week.

Efforts to obtain comment from Tesfaye, GBE Board Chairman Yoseph Getachew, and Frezer Ayalew, Head of Banking Supervision at the NBE, were unsuccessful.

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