Ethiopian Shipping and Logistics Settles Most Debts, But Sugar Group Remains a Sticky Issue

Ethiopia's state-owned logistics giant, Ethiopian Shipping and Logistics (ESL), addressed outstanding debts identified in a recent audit by the Office of the Federal Auditor General (OFAG). While ESL reports successfully collecting most payments from private and public organizations, the Ethiopian Sugar Industry Group (ESIG) remains a major holdout.

Sugar Group Presents Payment Challenge

Berisso Amallo, CEO of ESL, highlighted ESIG as the primary concern. “The sugar group has refused to settle the arrears for services rendered,” he stated.

Siraj Abdulahi, ESL’s Deputy CEO for Maritime Service, clarified the situation. “There’s a disagreement on the amount owed by ESIG,” he explained. “We filed a lawsuit with the Attorney General to resolve the matter, rather than resorting to the regular courts.”

While ESIG recently made a partial payment, “a significant sum” remains unsettled, according to Berisso. The audit report itself lists outstanding arrears of $323,000 USD and 48 million birr from ESIG.

Other Debts Under Negotiation

The audit also identified outstanding payments from the Ministry of Finance (MoF) on behalf of Ethio Engineering Group (EEG, formerly known as MetEC) and the National Disaster Risk Management Commission (NDRMC). Discussions with the MoF are reportedly underway to address these debts, which total $19.6 million USD and 757.1 million birr (EEG) and 148.8 million birr and $25.6 million USD (NDRMC).

ESL Embraces Reform and Modernization

ESL management assured the committee that most audit findings related to operational gaps over the past two years have been addressed. They also highlighted their commitment to continuous improvement.

“The audit findings served as valuable input for our reform program,” stated the CEO. “This reform plan has been submitted to the Ethiopian Investment Holding, our overseeing body.”

ESL is additionally implementing a digitalization framework to streamline operations. “The framework is nearing completion and will soon be fully operational,” the CEO added.

Positive Outlook from Auditor General

Meseret Damtie, Auditor General of OFAG, commended ESL’s efforts. “The audit identified numerous operational issues at ESL,” she acknowledged. “However, based on the management’s response, it appears they have been addressed according to the recommendations.”

“ESL’s focus on improving service delivery and debt collection adds significant value to the enterprise,” she concluded.

While some challenges remain, particularly with ESIG, ESL appears to be making strides towards financial stability and operational efficiency.

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