Ethiopia: High-Level Delegation Dispatches to Djibouti Dilemma
By Mahlet Mesfin, 31 July 2012
The federal government dispatched a high-level delegation to Djibouti last
week, in an attempt to find a solution on the ground to the unprecedented
pileup of the nation's containerised imports.
This moves follows a series of meetings held over the past two weeks at the
Prime Minister's Office, on Lorenzo Te'ezaz Road, chaired by Muktar Kedir,
head of the Prime Minister's Office and Cabinet Affairs, sources disclosed.
The meetings were attended by senior government officials, including Mekuria
Haile, minister of Urban Development & Construction (MoUDC), who is also
board chairman of the newly amalgamated Ethiopian Shipping & Logistics
Services Enterprise (ESLSE).
Also in attendance was Diriba Kuma, minister of Transport (MoT), while Ahmed
Tusa, CEO of ESLSE, and Gebrewahd W. Giorgis, deputy director general of the
Ethiopian Revenues & Customs Authority (ERCA), took part in the meeting,
these sources disclosed.
It was during this meeting that Ahmed assumed responsibility for causing
"80pc of the problem" that has now nearly reached a crisis of national
proportions, sources told Fortune. This was a rare admission, for the
Enterprise's senior managers used to blame the pileup of containers at the
Port of Djibouti on a lack of trucks, which made many importers furious.
They also used to point their fingers at the ERCA for double sealing
containers. Indeed, the Authority has been sealing containers, even though
they are already sealed by Djibouti customs, which takes a day for each
container.
There are now close to 22,000 containers waiting at the Port of Djibouti to
be transported inland. The daily transport capacity is 300 units, which
would take more than two months to bring them all in to the dry ports. That
is if all new imports were suspended.
The problem began when two new initiatives collided all at the same time,
according to industry observers. The newly amalgamated firm, ESLSE,
incorporated three large state enterprises operating on the corridor under
unified management: Ethiopian Shipping Lines, Ethiopian Maritime Services
Enterprise, and Ethiopian Dry Ports Enterprise. It was also during this time
that the government instated a multimodal transportation system, which
allowed the vessel owner to be responsible for the entire journey of goods
from the port of lading to final inland destinations.
Although the multimodal system went operational in July 2010, it was only
applicable to goods imported for government agencies. However, it became
mandatory for private imports eight months ago, despite authorities' claim
that the private sector would be at its discretion to use the system.
This made the Enterprise the most chaotic state institution to date, as it
has become a place where furious importers whose containers are stranded at
the Port, argue with its officers and officials almost every day.
"The new entity did not harmonise its own internal structure, let alone
assume the rather huge responsibility of handling every import on its own,"
said an importer, whose cargo whereabouts remain unclear to him.
It has also affected the government revenue collection drive from duties.
The ERCA, which has managed to mobilise 70.4 billion Br from domestic
sources during the just ended fiscal year, could have collected six billion
Birr more had it not been for the goods stranded at the Port, according to
its officials.
The Enterprise's senior managers were summoned to testify before Parliament
two months ago, while a team of experts, led by Mekonnen Abera, director of
the Ethiopian Maritime Authority, was subsequently dispatched to Djibouti to
investigate last month. The result was a recommendation to exempt at least
eight categories of imports - mostly perishables, chemicals, and
manufacturing raw materials - from import through the multimodal system.
To the dismay of importers, little has changed, though.
It has triggered a new debate among senior government officials over whether
there is a need to return back to the uni-modal system where importers are
allowed to take charge of their cargoes at the Port of Djibouti. They then
select their choice of forwarding agent as well as transporter. However,
sharp divisions surfaced over this proposal, for the ministers stood their
grounds that the administration would not backpedal from its decision,
according to a senior government advisor who attended the meeting.
The decision was nonetheless made last week for the delegation to travel to
Djibouti late last week to find a solution on the ground, and stay there
until the problem is solved, sources disclosed. Ahmed and Gebrewahid were
accompanied by senior officials from the MoT, Fortune confirmed.
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Received on Tue Jul 31 2012 - 14:38:21 EDT
