But losing the coastline has not scuppered Ethiopia’s merchant fleet. The state-owned Ethiopian Shipping Lines (ESL) has eight ships afloat and nine under construction in China. That is modest compared with the armadas of the biggest shipping firms. But having any sort of ocean-going capability is good for national pride. At ESL’s Addis headquarters, complete with portholes and model ships, the outgoing boss, Ambachew Abraha, remembers proudly his days as an engineer aboard the freighter Queen of Sheba. “She was a real beauty,” he says. “With her I sailed to Rotterdam, Hull, Middlesborough.”

Mr Abraha was recently replaced as part of a shake-up of the company, which has seen a portfolio of state-owned transit and warehousing facilities added to it. The aim is to offset the high freight costs Ethiopian businesses pay by streamlining the entire transport process. A new railway is planned from Djibouti to Addis, and dry ports inside Ethiopia will allow goods to pass more quickly out of Djibouti, cutting the price of storage and customs.

Last year ESL made a profit of $40m. The new umbrella company looks likely to do even better. But a lot depends on Ethiopia getting more access to blue water. Its trade officials plan to do more business via the port of Berbera in Somaliland, a mostly unrecognised breakaway from Somalia, and with Port Sudan in Sudan. They are also cheered by a Kenyan plan to build a “super-port” at Lamu, a Swahili fishing-town near Kenya’s border with Somalia. A new road and railway would connect Lamu with Ethiopia and head on to South Sudan and possibly Uganda.

It might also reduce the risk of Ethiopian vessels being captured by Somali pirates. They have so far escaped that fate, perhaps because the pirates fear that the Ethiopians would launch a swift and bloody reprisal. But for all shippers, the threat of Somali piracy has nonetheless pushed up insurance costs and forced vessels to make expensive detours.

ESL handles 45% of Ethiopia’s shipping. Most of this is on the company’s own vessels, but some space is bought from other shipping lines. China is financing ESL’s new vessels, which will have improved cranes and holds for handling more complex cargoes, such as the colossal turbines needed to build Ethiopia’s new hydroelectric dams. Many of ESL’s ships leave Africa emptier than when they arrived, but that is changing. The shipping company hopes to increase its exports of coffee, grain, minerals, leather and textiles.

Ethiopia’s maritime ambitions are not limited to ESL. A school for sailors has been set up at a university in the lakeside town of Bahir Dar. It has ambitions to train 5,000 ship’s engineers and other officers for the world’s fleets within the next decade—providing low-cost competition for Sri Lankan and Filipino sailors. The government reckons these sailors could send home $250m a year in salaries. They would also return, as Mr Abraha has, with valuable skills and a hankering for the briny unusual in a landlocked country.

source: http://www.economist.com/node/21553050

NAIROBI, March 14 (Reuters) – Djibouti’s port authority is close to securing $4.4 billion from international banks to finance the building of five new ports in the next four years to meet growing demand for trade boosted by South Sudan’s gaining of independence.

The horn of Africa nation’s main port primarily serves its landlocked neighbour Ethiopia, which accounts for about 70 percent of traffic, but began handling landlocked South Sudan’s trade after the country seceded from Sudan in July.

Traffic through the port, run by Dubai’s DP World , the world’s third-largest port operator, is seen as a key economic indicator for the region as a whole. DP World also runs the Doraleh Container Terminal, with an annual handling capacity of 1.2 million TEUs (20-foot equivalent units).

“Our total investment in the port and marine services related business is $4.4 billion for the five ports and dry dock development and free zones,” Aboubaker Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority told Reuters.

“We have secured up to 85 percent. We are discussing with our traditional lenders. We are hoping to conclude and finalise the issue of financing in the coming weeks,” he said, speaking on the sidelines of an infrastructure conference in Kenya’s capital, Nairobi.

Hadi said that besides loans from China, Brazil and the Africa Development Bank (AfDB), the port would be financed up to 35 percent from internal revenues.

Some of the new ports will include Tadjourah, located on the north coast of Djibouti is expected to handle 4 million tonnes of potash exports a year and Port of Goubet will have a capacity of 4.5 million tonnes a year of salt exports both by end of 2013.

Funds for another, the Damerjog livestock port, and phase II of Tadjourah are yet to be secured, Hadi said.

BE LIKE TANGIER, DURBAN PORTS

Djibouti’s container port handled 705,000 TEUs in the whole of 2011 and that will rise further this year.

“We are going to end this year with 900,000 TEUs, so we hope by mid-2013 Djibouti will be the third African port to cross the 1 million TEUs, after Durban and Tangier in Morocco,” Hadi said.

The tiny red sea nation also plans to handle cargo from other landlocked countries in the east African region as well as parts of southern Africa, taking advantage of congestion at Kenya’s main port, Mombasa.

“What we are expecting in terms of (total) throughput in South Sudan volume currently, is 6.5 million tonnes,” Hadi said, referring to the potential trade of South Sudan.

“Out of the 6.5 million tonnes, we are planning to move through Djibouti, 70 percent. This would be 15-20 percent of the total volume of Djibouti port,” he said, adding it would be achieved in the next 12 months.

South Sudan, building from scratch after years of civil war with the north, raised its shipment volumes through Kenya’s port in 2011 by 87 percent, becoming the second biggest user of the Mombasa port after Uganda.

Djibouti, located on one of the world’s busiest maritime sea routes, hosts France’s largest military base in Africa plus a major U.S. base, and the port is used by foreign navies patrolling busy shipping lanes off the coast of Somalia to fight piracy.

The country also plans to double its main port’s container capacity to 3 million TEUs in the next two years, after a $330 million expansion.

“We are on the feasibility study … and it will be completed by May this year, after that we will decide when we are going to start construction,” said Hadi. (Editing by George Obulutsa/Patrick Graham)

A multimodal transport system (MTS) is an arrangement where the transportation of goods is handled under a single contract but performed with two different means of transportation. This avoids entering different contractual agreements with agents and forwarders for the delivery of imported goods as the carrier is responsible for the entire journey, including the shipment’s delivery at the final destination.

The government has been paving the way for the system by building two dry port facilities at a cost of around 20 million Br. One of them, located in Modjo Town, 73km southeast of Addis Abeba in Oromia Regional State, covers 61ht, and the second, located in Semera Town, 550km northeast of the capital, covers 163ht.

The system was originally meant for imports of government agencies. A couple of weeks ago, however, the MoT instructed all importers who open letters of credit (LC) in local banks to ship their cargoes through the ESLSE’s multimodal service. This left the whole market to the ESLSE, which has 40 agents internationally, as it is the only multimodal transport operator to date.

To the surprise of forwarders, this directive was issued at a time when they were waiting for the Council of Ministers to approve a draft regulation that would allow private companies to be involved in multimodal operations. The 20 million Br capital requirement proposed in the first draft was reduced to five million Birr in the final draft, after discussions between the companies and the MoT.

Those interested in engaging in multimodal operations are also expected to provide a performance bond and have a branch outside of Ethiopia.

Along with the delay in the regulation and the ESLSE’s monopoly, forwarders, whose market has dried up, voiced their grievances to the MoT through their Association in a letter written to Transport Minister Diriba Kuma.

Cargoes whose LCs were opened in February will start arriving this month, and the 78 forwarders in the business will start to feel the heat. Although the recent directive still leaves some room for forwarders to provide service to those institutions, such as nongovernmental organisations (NGO) and embassies, that have non-LC cargo, it does not help much, as such cargo does not constitute the majority of imports, according to one of the 45 members of the Association.

Nonetheless, two weeks have already passed without a response from Diriba’s office.

“Even though we have tried to contact the minister to discuss the issue, his office is not responsive,” the member told Fortune.

This has forced them to present their case to the prime minister who is to approve the regulation for ratification in two weeks’ time.

“We will ask for an urgent ratification of the regulation,” senior manager of the Association said.

That, the Association hopes, is the quickest way to undercut the monopoly exercised by the ESLSE.

source:addisfortune.com

The system is designed to combat the pilfering of goods, locally known as kisheba, which is a practice prevalent on the corridor, where criminals take goods off of trucks on their way to or from Djibouti but with a volume hardly noticeable. However, losses due to theft and robbery were estimated to be 1.4pc of the 1.1 million tonnes of export commodities exported in 2010/11, according to the International Cargo Securities Council.

“Such acts have distorted the image of export commodities from the country in the international market,” said Belay Desta, head of the border directorate at the ERCA.

Customs officers at the Authority currently attempt to control the crime by standing at check points to inspect each truck, employing police officers who also check trucks suspected of committing the crimes.

“The crimes are getting sophisticated,” Belay told Fortune. “It cannot be controlled by human intervention [alone] anymore.”

The electronic tracking system is developed by US-based HI-G-TEK Company, at a cost of 2.5 million dollars.

The company inked the deal in January 2011.

It will keep authorities well-informed of every activity of each trucks moving on the corridor, they hope, from its departure to destination. Using radio frequency identification (RFID), the HI-G-TEK system will inform the Authority of events such as trip initiations, container seal tampers, and trip terminations.

The ERCA has identified a total of eight stations for the system, which are to be installed with the main software developed by the US provider of wireless solutions. The stations are Addis Abeba Commercial Goods, Addis Abeba Export & Government Goods, Modjo Dry Port, Adama Customs Station, Mille Checkpoint, Galafi Entry Station, Awash Station, and ports in Djibouti.

For the system to function properly, all containers and bulk cargo trucks must be fitted with electronic tracking devices, including seals and locks, compact readers that read the seals and locks, as well as a GPRS modem to identify the location of the cargo. Officers at any of the stations can lock the trucks, put the alert system on, and notify other stations upon arrival.

Transport companies and truck owners providing services on the corridor are required to buy and install the electronic devices from an authorised supplier, at an estimated cost of 20,000 Br a truck.

As much as they are happy with the system making the route safer than it is now, transport companies are highly concerned about the huge capital that the project requires.

“Our company is to spend around 2.5 million dollars installing devises at 1,000 dollars a truck,” a manger of a transport company that has a total of 1,001 trucks using the networked route, who wishes to remain anonymous, told Fortune. “This might force us to increase the transport price for clients to balance our costs.”

But, the job of installing and servicing the devices should be left to local companies, after they obtain certifications from the ERCA, according to members of a board established to oversee the project implementation. The board comprises of representatives from the Ministry of Transport (MoT), the Ethiopian Quality & Standards Agency (QSA), Ethiopian Transporters Association, and the ERCA.

GCS Tracking Plc, Global Tracking, and FC Tracking have submitted their applications, following the ERCA’s invitation to hire domestic companies for the job. GCS has already imported 500 units of these devices, bought from HI-G-TEK, but has been held up at airport customs, for the board has yet to grant permission to let the devices into the country.

A company is required to have a 20 million Br registered capital, present a two million Birr performance bond, and have a minimum of a five-year contract with its major supplier in order to be eligible, according to the directive of the ERCA. However, it seems that fulfilling the requirements is not an easy task for the companies, as none of their applications have been accepted, hence, resulting in a series of complaints about the directive that the ERCA issued.

“The requirements of the new directive do not consider the capacity of local IT companies,” reads a letter of complaint lodged at the Prime Minister’s Office by four IT companies, including Global Tracking, GSC Tracking, Ramsea Industrial Solution Plc, and Admiral Engineering Technology Plc.

The performance bond should be 10pc of the project, based on contracts with transporters, they argued.

There are around 10,000 trucks with varying carrying capacities, of which half are fuel transporting vehicles, according to the Ethiopian Road Transport Authority (RTA). Of these, close to 600 trucks and trailers are driven daily on the Addis-Djibouti corridor.

Their managers also question the motive behind requiring such a high capital in a country where IT companies are nascent and whether it is an intentional plan to exclude local companies by employing legal instruments.

“A company should not be excluded from the market, simply because it does not have 20 million Br capital,” Zelalem Dagna, managing director of Global Tracking, told Fortune. “It can secure loans from banks.”

Belay of the ERCA rebuffs the fear of IT company managers.

The intention behind the requirement is only to make sure that companies are capable of supplying the devices without defaulting, according to Belay. It costs around 1,000 dollars to import devices for a single truck, and it is difficult to certify a company that does not have enough capital.

They cannot presume that a company with less than 20 million Br in capital could supply the devices and manage the business, officials at the Authority argue.

Belay has a bit of information that may comfort managers of domestic IT companies.

“Though any decision has yet to be made, we are also considering amending the directive,” Belay confirmed to Fortune.

Should a company be accepted, its devices ought to first pass inspection by the Information Networking & Security Agency (INSA) to see whether the device is compatible with HI-G-TEK system and for security clearance.

The system developed by HI-G-TEK has relevant, real-time tools to monitor cargo in transit, of which the former is used when network coverage is not available. As far as being real-time, every movement of the cargo during transportation is reported to the data centre and mapped, available to officers at each of the stations. The readers will also report alerts to the stations in the event that the seal is opened at an unauthorised location or tampered with or if the truck deviates from the designated route.

Information about the movement of cargo can be made available when they arrive at any one of the checkpoints, using the detectors and readers installed at each. If the cargo has encountered any unauthorised act, the alarm sounds when the truck enters the station for inspection.

“All cargo transporters are to be monitored in real-time, except when the network is slow,” Belay told Fortune.

An armed patrol department has also been established to arrive on location, when an alarm is reported in case of an intrusion of goods, theft, or other criminal act on goods in transit for inspection.

“Because the system will make the route safe, imports and exports will be facilitated, and the goods will arrive without intrusions,” Belay said.

The ERCA has plans to extend the system of electronic tracking system on other highways of the nation, including the Kombolcha to Djibouti corridor. This will be followed by the Addis Abeba to Sudan corridor, where 80pc of the nation’s 1.7 million tonnes of annual oil imports originates.

source: addisfortune

These companies, which have a firm grip on importing goods into the country, made the discount from February 9, 2012, until March 9, 2012, after the board approved it at the beginning of the month.

The new discount from the newly formed amalgamation comes out of the coordination between the firms under the state’s domain, which used to operate separately, an official, who is not authorised to speak to the media, told Fortune.

The oldest of the three companies, ESL was formed in 1964 with a capital of 50,000 Br, while MTSE was established in 1968 at a capital of half a million Birr and DPSE established in 2007 with a capital of half a billion Br.

The newly amalgamated enterprise is the sole company involved in sea fright and multimodal transport operations (MTO). DPSE is in charge of dry ports in Modjo Town, 73km east of Addis Abeba and Semera, 550km northeast of the capital, while MTSE operates in clearing and forwarding.

Due to the discount, a chemical importer who imports detergents used in producing soap and dye textiles is happy of about the discount, despite its being introduced for a short period of time.

His chemical shipments from Xingang Port, China, used to cost him 1,775 dollars, but he paid 1,500 dollars for a similar amount from the same port with a significant discount of 15.5pc. A similar chemical shipment from Gdynia Port, Poland saw a significant, 10.8pc discount from 1,625 dollars to 1,450 dollars.

Although most importers found out about the discount on their own by questioning the decline in prices of repeated shipments, the ESLE, which did not send an official letter announcing the discounts, preferred to keep silent, declining to comment on the issue.

However, this will only bring a short-term impact on imports, lowering prices of commodities, which are managed to be shipped during the discount period, economists opine.

This is a major move by the ESLE, which is still undergoing the process of bringing the three firms’ staffs under one roof and compensating importers who claimed to have been affected by the high sea fright costs charged by the Enterprise, according to industry operators.

It was instigated by a directive signed by Kassu Ilala (PhD) when he was a deputy prime minister back in 2000, instructing all banks not to open letters of credit (LCs) for importers without bills of lading issued by the former ESL or waivers from the transporter.

This was introduced after the government bailed out the Enterprise from its unprecedented losses of close to 20 million Br a decade ago.

This action sheltered the then-ESL from foreign competition, enabling the national flag carrier to register staggering profits over the past nine years.

During the last fiscal year alone, the former ESL made a profit of 661.5 million Br, exceeding its projection by nine per cent.

The policy of forcing importers to transport through the ESLE was implanted, despite strong criticism from importers who complained that the state Enterprise’s interest is protected at the expense of local consumers.

Subsequent to this, it also introduced payment in dollars in July 2010.

It operates nine vessels with a combined carrier capacity of 150,000tn, transporting 44pc of the shipments of the county’s total 1.7 million tonnes of imported goods and 468,091 million tonnes of exported goods, during the 2010/11 fiscal year.

It has also made a 293.5 million-dollar order to bring nine additional vessels from China which financed 80pc of the cost, with delivery to the ESLE scheduled for next year.

The ESLE also largely uses slot charters, leasing space from foreign operated vessels.

source: addisfortune

With financing from the Arab Fund for Economic and Social Development and the Saudi Fund for Development, the Djibouti government-owned Port Authority will build and operate marine civil facilities and common services – to be constructed with an initial 30-hectare yeard and a 435 metre quay, the company said.

Allana said it will continue to work with the Djibouti authorities to integrate the required potash storage and handling facilities into the new port plans.

With a recently-completed, positive preliminary economic assessment (PEA) under its belt for its Dallol potash project in Ethiopia, Allana Potash is expecting a host of developments in 2012, including a feasibility study later this year.

Based on the PEA plan, transportation of the product to Djibouti would be completed through a company-owned fleet of trucks, with port costs based on Allana constructing its own port terminal in Djibouti, including product unloading and storage, shipping facilities and supporting infrastructure.

With regards to infrastructure developments for the project, Allana said again today that highway construction by Ethiopian government contractors was “actively proceeding” to connect the project area with paved roads both to the company’s project development staging facilities in Mekele, and to the southern highway access to ports in Djibouti.

The company also said that discussions were progressing with government departments and private sector operators regarding regarding rail facilities linking road and port infrastructure. Allana continues to expect that the infrastructure required for the company’s Dallol potash project to reach full operation will be in place at the same time as, or in advance of its projected construction period, it said.

The company is planning to start production at Dallol with one million tonnes at the initial stage by 2015, to reach peak production by year 2017. Start of construction at the project is anticipated as early as late 2012, with minimal output expected by the end of 2014.

President and CEO of Allana, Farhad Abasov, said in a statement Wednesday: “Allana is encouraged by the admirable progress made by the Djibouti Government in the ongoing development of the country’s transportation infrastructure.

“Allana understands that both the Djibouti and Ethiopian Governments are looking to the strategic Danakhil potash resource as one of the catalysts for the development of road, port and rail facilities critical to the continued economic growth within the region and we are pleased to have the opportunity to participate in supporting these developments.”

Last November, the company announced the results of the PEA for its Dallol potash project for production of one million tonnes, with the potential to expand output at the site to two million tonnes of muriate of potash (MOP) product per year at a later stage

The economic study, conducted by Ercosplan and based on solution mining with a solar evaporation method, yielded, on an after-tax basis, an internal rate of return (IRR) of 36.8 percent and a net present value (NPV) of US$1.85 billion, based on a 12 percent discount rate.

The results exceeded management’s expectations, said Abasov, with the project having “one of the lowest capex and opex in the world” in the potash industry, especially when compared to Saskatchewan players in Canada.

Solar evaporation of the saturated brine solution is possible at the Dallol project due to the year-round hot temperatures and very little rainfall, in contrast to Saskatchewan. Salts harvested from the ponds at Dallol will be processed by standard flotation to create an MOP product.

The Ethiopia project also hosts shallower deposits, which means the company is not required to drill that deep, allowing for cost savings, Abasov told Proactiveinvestors in December.

The ongoing feasibility study, which will consider additional MOP and sulphate of potash (SOP) output, is due out in the third quarter of 2012.

Meanwhile, pilot evaporation pond test work, hydro geological studies and solution mining test work are underway as the company’s feasibility study advances. Heavy machinery to construct the ponds is on site, and engineering work and earthworks are in progress, Allana added.

An update to the NI 43-101 compliant technical report is also expected by the end of the first quarter of 2012, with Abasov expecting substantial additions to resources on the eastern side, and an upgrade to the measured and indicated category on the western side.

Exploration drilling has now shifted to the far eastern part of the property as part of the program designed to add mineral resources.

Allana Potash already has financial support from two strategic investors, IFC, a member of the World Bank Group, and Liberty Metals and Mining, and recently announced the closing of a $20 million private placement financing.

Total measured and indicated resources now stand at 673 million tonnes, with an average grade of 18.65% KCI, with total inferred mineral resources of 596 million tonnes at a grade of 19.96% KCI.

Source, Pro Active News

All imported goods to Ethiopia are subjected to customs duties and taxes, unless exempted by law. Taxes applicable on imported goods are; Excise Tax, Value Added Tax, Sur Tax and withholding tax. The rates differ according to the type of the good.

Duty is tariff collected on the value of the good calculated on the basis of its actual total costs. It is levied in accordance with the rules of the international convention on the harmonized customs description and coding system. Sur-tax applies on all imported goods, except those exempted by the Council of Ministers Regulation No. 133/2007 at 10 percent rate. Excise tax is paid on imported goods with a percentage rate ranging from 0 to as high as 100. VAT on imported goods is a flat rate of 15 %. A 3 percent withholding tax applies also on imported goods. These taxes are calculated based on the cost and freight rate. But the Ethiopian Revenues and Customs Authority provides its own CD with details on prices on various goods. The rate is usually calculated as per the price on the CD.This CD is to be updated every three months.

Some imported goods are restricted and require the importer to secure permission from the competent authority.

Here is Duty and taxes applicable on some of major import goods in Ethiopia:

Vehicles, Chemicals, Steel, Petroleum and its products

Vehicles

Vehicles with spark–ignition engine of cylinder capacity of 1000-1300cc

Unit of measurement: unit
Duty Rate: 35%
Excise Tax: 30%
VAT: 15%
Sur Tax: 10%
Withholding tax: 3%

Vehicles with spark–ignition engine of cylinder capacity of 1300-1800cc

Duty Rate: 35%
Excise Tax: 60%
VAT: 15%
Sur Tax: 10%
Withholding tax: 3%

Vehicles with spark–ignition engine of cylinder capacity greater than 3000cc

Duty Rate: 35%
Excise Tax: 100%
VAT: 15%
Sur Tax: 10%
Withholding tax: 3%

Diesel vehicles with cylinder capacity not exceeding 1300cc

Duty Rate: 35%
Excise Tax: 30%
VAT: 15%
Sur Tax: 10%
Withholding tax: 3%

Diesel vehicles with cylinder capacity of 1300-1500cc

Duty Rate: 35%
Excise Tax: 60%
VAT: 15%
Sur Tax: 10%
Withholding tax: 3%
Motor vehicles for the transport of goods

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding tax: 3%

Public transport type vehicles (diesel/semi-d) seat capacity greater than or equal to 15 passengers

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding tax: 3%

Chemicals

Chemical fertilizers of nitrogenous, phospatic, photassic, phosphates and chemical fertilizers with nitrogen, phosphorous and potassium are exempt from Duty, Excise Tax and Sur tax. But they are subject to 15% VAT and 3% withholding tax. Importation of chemical fertilizers require permission from Ministry of Agriculture and Quality & Standards Authority of Ethiopia

Chemical preparations for photographic use

Unit of measurement: Kg
Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Unbleached coniferous chemicals, wood pulp, soda or sulphate

Duty Rate: 0%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

Other chemical products and residuals

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

Steel (manufacturers get a better duty rate than importers and surtax on certain raw materials (Billets, Hot Rolled Coils, Wire Rod in coils) is 0%.

Unit of measurement: Kg

Flat/hot rolled iron/steel in coils, width >=600mm, with pattern in relief
Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Rolled iron/steel plated with chromium oxides, width >600mm

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Hot rolled iron/steel, on 4 faces, width >150mm but <600mm, >=4mm in thickness, not in coils.

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Hot rolled iron/steel bars/rods, rectangular (other than square, x-section)

Duty Rate: 20%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Hot rolled U, I or H sections of iron/steel, <80mm high

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Hot rolled Angles/shapes/sections of iron/steel not further worked

Duty Rate: 10%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Hot rolled stainless steel in coils >=600mm by >10mm

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Plates, sheets and strip of refined cooper in coils, >0.15mm thick

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Aluminium foil rolled not backed
Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Petroleum and its products

Petroleum oils and oils obtained from bituminous minerals, crude

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 10%
Withholding Tax: 3%

Other petroleum oils and oils obtained from bituminous minerals

Duty Rate: 0%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

Petroleum coke

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

Petroleum bitumen

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

Other residues of petroleum

Duty Rate: 5%
Excise Tax: 0%
VAT: 15%
Sur Tax: 0%
Withholding Tax: 3%

References
Customs Proclamation, No. 622/2009
Council of Ministers Regulation No. 133/2007
Ethiopian Revenue and Customs Authority Database.
Web: erca.gov.et

The Ethiopian government is set to reduce the transportation cost for the country’s foreign trade sector to enhance its competitiveness on the international market according to the document presented to transporters for discussion.

The final price of Ethiopian products on the international market owes a significant amount to trade logistic costs.

The price of transporting commodities through Port Djibouti, from Ethiopia, is notably higher at 6 US cents per ton/km as compared to 2.3 US cents in Pakistan and 4 US cents in Brazil according to the document.

Transport vehicles in Ethiopia cover just 60,000 km annually as opposed to 180,000km annually in other countries noted the document. The excessive down time of vehicles offering freight transport services via Port Djibouti is part of the reason behind the high rates according to the study conducted by the transport authority.

Operators will also need to reduce their current fuel consumption of an estimated 1000 liters by 10%.

Transport services will not lose profits because of these measures because an increase in the number of round trips and the decrease of down time and fuel consumption will offset the 27% cut on their rates.

Problems associated with custom clearance will need to be dealt with before transport operators can increase the number of trips and reduce down time according to representatives of the sector in meeting with the ministry.

The authority expects to put the new changes into effect in the next fiscal year.

Source: The Reporter

Water depth, wind level and geographical protection are factors in determining where the shipyard will be erected, according to Aboubaker Omar Hadi, chairman of the Djibouti Ports & Free Zones Authority.

“Otherwise, you will have to build a very expensive facility for a water break,” he told Fortune.

With the desire to incorporate dry dock and lift system models, the ship maintenance yard will be the ninth on the continent and the second on the East African coast, next to the 70-year old African Marine & General Engineering Co Ltd of Kenya. However, Djibouti’s shipyard will have the capacity to repair ships with 50,000dwt (dead weight), while its contender in Mombassa handles only up to 12,000dwt.

“We have wanted to build this yard for the past five years,” Aboubaker told Fortune.

Djibouti is at the heart of the Europe-Far East sea route, the second of the three largest routes in the world, apart from the Pacific and North Atlantic routes. An average of 90 large and medium size vessels, operated by liners such as Maersk and MSE, sail on this route, carrying around six million units of containers a year. This is projected to grow by an annual rate of 10pc.

The country wants to claim 50pc of this annual traffic in transhipment container logistics, thus committing, in the next three years, a 1.54 billion-dollar investment in expanding its existing port facilities and building new ones, according to Aboubaker, who was here in Addis Abeba for two days late last week.

He came here to promote these projects, including the creation of a new free zone, Jaban-us Free Zone, on a 57ht plot, 12km west of Djibouti Town. It will cost an estimated 30 million dollars, Aboubaker disclosed.

The government of Djibouti has plans to launch the second phase of the Doraleh Port development at a cost of 330 million dollars and convert the old Djibouti Port to a general cargo facility, at a projected cost of 88.5 million dollars, while expanding the newly built oil terminal at the Port of Doraleh at a cost of 150 million dollars, upgrading the facility’s storage capacity by 30pc.

There are also three plans on the drawing board to build brand new ports, including a livestock port, handing two million head, annually, in the south of Djibouti at a projected cost of 50 million dollars; in Goubet (the central part of Djibouti) to support a 4.5 million-tonne salt export, which could cost 55 million dollars; and the Port of Tajourah, one of the closest sea gates to landlocked Ethiopia, to be built at a projected cost of 85 million dollars.

The Port of Tajourah is designed to facilitate a prospective annual export of 4.5 million tonnes of potash from Ethiopia. The Ethiopian government has granted a concession over a 481sqkm area in the Danakil Depression, Afar Regional State, to the Ethiopian Potash Corp, a Canadian firm based in Toronto, which began drilling in May 2011. This extreme north-eastern part of the country contains a reserve of 128 million tonnes of the resource at 21pc potash component, geologists believe.

Both governments have contracted out road building projects from the quarry to the port. The Ethiopian part is constructed by the Defence Construction Enterprise.

“We have mobilised close to 60pc of the financing to pay for all these projects,” Aboubaker told Fortune.

The financing to pay for the construction of the shipyard, which is still under development, comes partly from the Djiboutian government and half from private investors in Europe and India. Their identities, however, remain confidential, and Aboubaker declined to disclose them.

However, the final deal is due by February 2012, and the launching of construction after three months, according to Aboubaker. The design and feasibility studies to justify the project are developed by one of the partners, which is a European company.

source: addisfortune

Reporter has found from Sources in the Ministry of Transport and Communications (MOTAC) that the recruitement process is still underway meaning that Ambachew Abraha may still be appoined in days to come. On being asked regarding the chances of his appointment Ato Ambachew Abreha has indicated that he is presently attending to affairs in his previous office and declined to make further comment.

Alemu Ambaye Sebhatu has been appointed as the director of the enterprise. The chief engineer was in charge of fleet management at the now defunct Ethiopian Shipping Lines S.C. . Ewnetu Taye who was the acting general manager of the Ethiopian Dry Ports Enterprise from its inceptionis now the head of the Secretariat;  Eyasu Yimam who was Ethiopian Shipping Lines ‘s  Corporate Planning & IT Director is now heading the Dry Ports department. Ethiopian Maritime Transit Services previous head, Ahmed Yassin was selected to fill the deputy managing director post.

According to sources in MOTAC management,  the majority of staff who as yet have not been appointed to the immense enterprise have been temporarily hired and such continue to draw their previous salaries.

source: ethiopianreporter.com