National Bank of Ethiopia Implements New Gold Pricing Directive to Boost Foreign Currency Earnings

National Bank of Ethiopia Implements New Gold Pricing Directive to Boost Foreign Currency Earnings Addis Ababa, August 21, 2016 – The National Bank of Ethiopia (NBE) has introduced an amended directive, effective today, aimed at revising the pricing mechanism for gold purchased through its central and regional procurement branches. The new guidelines, detailed in Guideline No. Mada 2/2016, are designed to enhance the sustainability of gold supplies and maximize the country’s foreign currency earnings from the traditional gold production sector. Key Changes in the Gold Pricing System Under the revised directive, the purchase price of gold will now be directly linked to the daily selling rate of foreign currency, as published on the NBE’s official website. This move is expected to align gold transactions more closely with real-time market conditions, offering a more transparent and competitive environment for gold suppliers. In a bid to incentivize gold supplier associations and individual merchants, the NBE has introduced a new payment structure. The key provisions of the directive are as follows: a) The gold purchase price will be determined based on the daily foreign currency selling rate stated on the NBE’s website. This ensures that the prices reflect current market conditions and provide suppliers with fair compensation. b) Suppliers will receive 95% of the value of their gold upfront, with the remaining 5% reserved. If the 30th day falls on a holiday or weekend, the supplier may select the price on the next working day. However, if the supplier does not return within 30 days, the bank will purchase the gold at the price set on the 31st day. This provision offers a level of flexibility while ensuring suppliers are compensated promptly. c) Large producers and companies will receive 50% of their gold sale proceeds in foreign currency for their own use, with the remaining 50% paid at the daily selling exchange rate. The foreign currency obtained in this manner must be used within one month, but to encourage gold-producing companies, the NBE has extended the usage period to three months. The gold supplied in this manner will be transported and refined through the bank according to a contract between the NBE and the gold-producing companies. d) Incentive payments will be made to gold suppliers who provide between 250.01 grams and 25 kilograms of gold at a time, to help them cover their costs, as per the bank’s internal operating instructions. This incentive is aimed at ensuring the sustainability of gold supplies from small to medium-scale miners. e) Aggregators, who collect and supply more than 25.01 kilograms of gold at a time, will receive higher incentives to cover their costs and generate income. This recognizes the significant role they play in the supply chain and encourages larger-scale gold collection. f) The incentives mentioned in sections (b), (d), and (e) do not apply to large manufacturing companies covered in section (c). This differentiation ensures that while smaller suppliers and aggregators are encouraged with incentives, large manufacturers continue to follow specific guidelines. Implications for the Gold Market The NBE’s latest directive marks a significant shift in Ethiopia’s approach to managing its gold resources, reflecting the broader economic reforms taking place in the country’s foreign exchange market. By providing clearer pricing mechanisms and targeted incentives, the NBE aims to increase the volume of gold supplied through official channels, thereby boosting the country’s foreign currency reserves. Analysts suggest that these changes could lead to increased participation from both small-scale miners and large producers, ultimately driving more of Ethiopia’s gold output into the formal economy. This, in turn, could help stabilize the country’s foreign exchange market and contribute to overall economic growth. As the directive takes effect today, stakeholders across the gold supply chain will be closely monitoring its impact on gold trading volumes and foreign currency earnings. The NBE’s commitment to ongoing reform is expected to play a pivotal role in shaping the future of Ethiopia’s gold market and its contribution to the national economy.

Boeing Announces Launch of African Office in Addis Ababa, Set to Begin Operations in October

Boeing Announces Launch of African Office in Addis Ababa, Set to Begin Operations in October Boeing Announces African Office to Begin Operations in October Addis Ababa, August 20, 2016 (FBC) – Boeing has announced that its African office, headquartered in Addis Ababa, will commence operations in October. The head of the office, Henok Tefera, made the announcement, emphasizing Boeing’s commitment to strengthening its presence in Africa. Henok Tefera highlighted that Boeing’s decision to establish its African headquarters in Addis Ababa was driven by Ethiopia’s remarkable progress and success in the aviation sector. The country has positioned itself as a leader in the region, with Ethiopian Airlines at the forefront of this achievement. “The opening of Boeing’s African office in Addis Ababa marks a significant milestone in our efforts to deepen our engagement in Africa. This office will not only serve as a hub for Boeing’s operations on the continent but also provide Ethiopia with greater opportunities to solidify and enhance its status as Africa’s aviation center,” Tefera stated. He further explained that Boeing is committed to fostering a strong partnership with Ethiopian Airlines. A key focus of this cooperation will be on the joint production of aircraft parts, which will contribute to the development of the aviation industry in Ethiopia and across Africa. Tefera also underscored that the presence of Boeing in Addis Ababa is expected to bring about positive economic impacts, including job creation and technology transfer. “Our goal is to support the growth of the aviation sector in Africa by working closely with local partners and stakeholders,” he added. As the October launch date approaches, Boeing is preparing to kick off its operations by engaging with various African countries and aviation authorities. The company’s long-term vision includes expanding its services and solutions across the continent, ensuring that Africa remains an integral part of the global aviation network. With the establishment of the African office, Boeing aims to build on the success of Ethiopian Airlines and contribute to the growth of Africa’s aviation industry, further cementing its commitment to the continent’s development.

Alibaba AliExpress Enters Ethiopian Market: MKTY Appointed as Official Business Partner and Launches Africa’s First AliExpress Showroom

Alibaba AliExpress Enters Ethiopian Market: MKTY Appointed as Official Business Partner and Launches Africa’s First AliExpress Showroom Alibaba Group’s AliExpress has made a significant entry into the Ethiopian market, signaling a major step forward in the region’s e-commerce development. The global e-commerce platform has appointed MKTY as its Official Business Partner in Ethiopia, a move that highlights the strategic importance of Ethiopia as a gateway to broader African markets. This partnership is poised to transform the digital retail landscape in the country, offering new opportunities for both consumers and local businesses. First AliExpress Showroom in Africa In collaboration with AliExpress, MKTY has established the first AliExpress Showroom on the African continent, situated in the heart of Addis Ababa. This state-of-the-art facility is designed to serve as a physical touchpoint for Ethiopian consumers and businesses alike. Visitors to the showroom can explore an extensive array of products sourced from around the globe, spanning electronics, fashion, home goods, and more. The showroom also provides an immersive experience for customers to engage with the AliExpress brand, offering personalized assistance and demonstrations on how to make the most of the platform’s e-commerce services. For local businesses, the showroom acts as a hub of innovation and support, providing expert guidance on how to leverage AliExpress’s global network to expand their reach beyond Ethiopian borders. This initiative is expected to empower small and medium-sized enterprises (SMEs) by offering them direct access to international markets, thus boosting their potential for growth and profitability. Exclusive Ethiopian Portal and Launch Offers To further enhance its entry into the Ethiopian market, AliExpress has rolled out a dedicated Ethiopian portal that caters specifically to the needs of local consumers and businesses. This portal offers a range of exclusive benefits designed to attract and retain customers, including: Up to $100 Cashback: New users on the Ethiopian portal can benefit from a generous cashback offer, encouraging more people to explore and shop through AliExpress. 3% Discount on Purchases: To celebrate the launch, all purchases made through the Ethiopian portal are eligible for a 3% discount, providing added value for consumers. Simplified Business Registration Process: For local entrepreneurs and businesses looking to join the AliExpress ecosystem, the portal offers a streamlined registration process, making it easier to set up and manage their online stores. These launch offers are available for a limited time, emphasizing the urgency for consumers and businesses to take advantage of these benefits as they explore the new portal. Impact on Ethiopia’s Digital Economy The entry of AliExpress into Ethiopia is expected to have a profound impact on the country’s digital economy. By providing a platform for Ethiopian businesses to connect with global markets, AliExpress is helping to bridge the gap between local SMEs and international consumers. This can potentially lead to increased export opportunities, higher revenues, and a more competitive business environment within Ethiopia. Moreover, the presence of a physical showroom in Addis Ababa serves as a tangible demonstration of Alibaba’s commitment to fostering e-commerce in Africa. It also provides an opportunity for Ethiopian consumers to experience e-commerce in a more interactive and engaging way, which could accelerate the adoption of online shopping in the country. Looking Ahead: A New Era for E-Commerce in Ethiopia The collaboration between AliExpress and MKTY marks the beginning of a new era for e-commerce in Ethiopia. By combining AliExpress’s global reach and technological expertise with MKTY’s deep understanding of the Ethiopian market, this partnership is well-positioned to drive significant advancements in the country’s retail and digital sectors. As Ethiopia continues to embrace digital transformation, the AliExpress Showroom and Ethiopian portal are expected to play a central role in shaping the future of commerce in the country. Local businesses now have unprecedented opportunities to scale up, while consumers gain access to a wider variety of affordable and high-quality products from around the world. Tags alibaba aliexpress mkty

Reform and Risk: How Ethiopia’s Currency Shift Is Reshaping Everyday Life

Reform and Risk: How Ethiopia’s Currency Shift Is Reshaping Everyday Life Introduction: Shifting from a Fixed to a Market-Based Exchange Rate For over a decade, Ethiopia’s economy has been guided by a fixed exchange rate, but now, the National Bank’s bold move to a market-based system is stirring up excitement and uncertainty. As this new chapter begins, the ripple effects on pricing, especially for everyday essentials like food, are set to reshape the way people live and work. With the whole economy on the edge of change, the impact of this reform on wallets and businesses is a pressing question. The IMF predicts that rising prices for food and essential goods will be especially burdensome for the urban poor. Addis Insight will explore how this historic shift is set to transform agriculture and product pricing. The Vital Role of Agriculture in Ethiopia’s Economy Ethiopian agriculture is vital to the nation’s economy, providing livelihoods and contributing significantly to GDP. It is the main food source for both urban and rural areas. To reduce imports, Prime Minister Abiy Ahmed’s reforms included a planting campaign. The 2022 irrigation-based summer cultivation produced 25 million quintals of wheat, leading to a halt in imports. Wheat exports now enhance foreign exchange earnings, provide farmers with extra income, diversify the export base, and support rural development. However, despite ongoing instability and climate impacts, the sector has received little attention. Food inflation has only decreased by 5.3% this July, and there are concerns that the National Bank of Ethiopia’s recent interest-rate policy may deter investment in agriculture and technology. The shift to a market-based exchange rate brings uncertainty, with questions about whether it will worsen existing issues or promote growth. The IMF predicts that inflation could rise to 30–35% by early 2025. Technology and Smallholder Farming: Challenges and Opportunities “Agricultural productivity is closely linked to the adoption of technology, but the recent shift to a market-based foreign exchange rate is likely to worsen issues related to importing machinery, pesticides, and fertilizers,” explains Atlaw Alemu (PhD), renowned economist. He notes that with the ongoing devaluation of our currency, foreign currency has become both expensive and scarce. It remains uncertain when a stable supply of foreign currency might be restored. Although the government has promised subsidies for fertilizers and pesticides, providing support for machinery will pose a greater challenge. Impacts on the Agriculture Sector and the Broader Economy He added that our agriculture is primarily smallholder-based, with most farmers engaged in subsistence rather than commercial farming. Many of these farmers work with only small plots of land, which restricts their productivity and yield. To overcome this challenge and provide their product to the market, they need support through technologies like mini tractors to boost yields on their limited land. Increasing output would allow them to sell for profit and transition to commercial farming. Additionally, supporting and incentivizing the local production of fertilizers and pesticides could improve agricultural productivity while reducing costs and conserving foreign currency. Currency Volatility and Its Impact on Imports In the short term, transitioning to a market-based exchange rate often increases volatility and currency fluctuations, leading to higher import costs and inflation if the currency depreciates, as seen in early 2000s Turkey. However, a weaker currency can enhance export competitiveness, as Japan experienced. Central banks may need to adjust policies to manage these effects. In Ethiopia, the recent macroeconomic reform has caused significant price increases, a 20-liter bottle of oil rose by 1,000 ETB, a 5-liter bottle by 200 ETB, and sugar by 10 ETB per KG. The Initial Economic Impact: Inflation and Speculation “Every initial stage of any policy impacts the economy,” noted Tilahun Girma, Finance Consultant and Associate Director at Feyssel and Associates. He highlighted that the recent policy reform caused a temporary inflation spike, with expected stabilization over time. Although the IMF generally opposes subsidies, their press release suggested selectively subsidizing essentials like food, fertilizer, and fuel to shield vulnerable groups from the reform’s impact, which shows its significant inflationary effect. Farmers and suppliers are holding back products in anticipation of price increases. Unlike countries with inventory tracking, our traditional market allows local merchants to adjust prices freely. Currently, exporters face shortages due to this speculation, and substantial inventories are held at various ports. Government intervention is crucial to regulate practices, ensure supply, and provide necessary subsidies. Addressing the supply chain from farmers to consumers and incentivizing the official market over the parallel market are essential for economic and currency stability. Uncertainty for Fixed Income Earners and the Inflationary Future Atlaw Alemu (PhD), renowned economist and Dean of the Department of Economics at Addis Ababa University notes, the shift to a market-based exchange rate will inevitably increase prices, though the duration and extent remain uncertain. Those on fixed salaries and with minimal incomes are particularly vulnerable to the inflationary effects of this reform. The market’s stabilization timeline is unclear, potentially extending into next year or beyond. I estimate that inflation will rise as foreign currency prices and the cost of imported goods increase. While some argue that goods previously imported using parallel market rates are now priced according to the official rate, this approach seems impractical due to our insufficient foreign currency reserves to support importers. Consequently, the parallel market rate is likely to rise due to a shortage of foreign exchange, exacerbating the issue as our economy does not generate enough foreign currency. Differing Views on the Liberalization of the Currency Market Conversely, Million Kibret, Managing Partner of BDO Ethiopia, argues that the liberalization of the currency market has a significant impact on import pricing. Prior to the liberalization, traders relied heavily on the parallel market, where the exchange rate fluctuated around ETB 110-120 per dollar. which is now closer to the official bank selling rate. Therefore, unless traders seek to increase their profit margins, imported goods should not experience a price increase. Furthermore, Kibret posits that increased availability of dollars to importers in a transparent manner would stimulate competition among traders. This competition, in turn, would drive down prices. He also points out that the recent permission for franco valuta imports would boost supply volume, further contributing to a potential price decline. Volatility and Opportunities in the New Economic Environment Samson Tizazu, Co-founder and Deputy General Manager Business Valuation and Export Import Consulting Firm called Proma Partners, anticipates that a market-based exchange rate will increase volatility, posing challenges for importers who must navigate uncertainty and potentially rely on black market rates. He suggests that government support and diaspora involvement could alleviate some volatility, aiding financial planning. Tizazu also notes that this new environment offers opportunities: importers with strong financial management and hedging strategies could remain competitive with attractive pricing despite fluctuating costs. Increased import expenses might encourage local production, reducing reliance on foreign products and bolstering local industries. However, he warns that rising costs and volatility could strain cash flow, disrupt supply chains, and complicate foreign currency acquisition, potentially affecting operational efficiency for Ethiopian importers. Government Measures to Support Citizens and Stabilize the Economy To cushion these effects of the historic macroeconomic reforms and stabilize the economy, the government has rolled out promising measures to support citizens. To alleviate the impact on vulnerable populations and ensure economic stability, officials have pledged to subsidize fuel prices and increase civil servant salaries. These steps aim to ease the transition for the public and help people adapt to the sweeping changes. Addressing Food Inflation and Enhancing Agricultural Productivity Kebede Lakew, Public Relations and Communication Manager of the Ministry of Agriculture, states, “To address food inflation, the Ministry is set to boost productivity this summer by enhancing 20.4 million hectares to achieve a yield of 615 million quintals.” He added that the Ministry will employ effective fertilizer distribution, high-quality seeds, mechanization, and cluster farming technology to improve smallholder productivity. Measures to reduce harvest losses include using drones and small machines to protect crops from weeds and pests, and treating soil acidity with limestone. With substantial rice production across Ethiopia, these efforts aim to enhance productivity and yields. He emphasized that macroeconomic reforms focus on increasing the productivity of exportable goods to ensure macroeconomic stability. The Ministry of Trade’s Role in Facilitating Essential Goods Distribution To tackle the price surge caused by recent macroeconomic reforms, the Ministry of Trade and Regional Integration has facilitated the distribution of essential goods. Between July 27 and 29, 2024, 752 of the 1,649 heavy vehicles carrying sugar, oil, rice, and other basic food items began distributing products in various parts of the country. Minister of Trade and Regional Relations Dr. Kasahun Goffe stated on the ministry page that the remaining vehicles are expected to complete their deliveries by August 1, 2024, ensuring that these essential goods reach the market promptly. Short-Term Subsidies and Long-Term Growth Prospects Kibret advocates for short-term subsidies to soften the blow of currency liberalization, but sees a long-term path to growth built on an open environment for foreign investment. He believes attracting foreign investors, with their financial muscle and institutional expertise, will boost production and economies of scale, ultimately driving down prices for consumers. He further emphasizes the importance of capital markets, not just for encouraging savings and channeling funds productively, but also for fostering peace and stability. He argues that widespread participation in capital markets instills a desire for a peaceful and stable environment, critical for business success. He also stresses the need for a proactive monetary policy based on interest rates. This allows the central bank to closely monitor the economy and adjust rates to control inflation or stimulate growth. Looking toward the future, he suggests, even with potential constitutional amendments, allowing the purchase and sale of agricultural land could pave the way for large-scale farms, potentially transforming the agricultural sector. Balancing Inflation, Prices, and Economic Stability Tizazu noted that the shift to a market-based exchange rate is likely to drive up prices for essential goods, as many of these rely on imports and importers may pass on higher costs to consumers. However, government subsidies and efforts to attract diaspora investment could help stabilize prices and mitigate the impact on consumers. The effectiveness of these measures in maintaining affordability will become clear over time. Influence of Government Policies and Foreign Investment He also highlighted that the government’s recent subsidies and price control measures, combined with the National Bank of Ethiopia’s monetary policy adjustments and a favorable approach towards foreign investors like Alibaba, will significantly influence the long-term stability and cost trends of imported goods. Imported goods may remain expensive unless the local currency appreciates, but foreign investments and subsidies could ease the transition to price stability. The government’s focus on managing inflation will be crucial for preserving consumer purchasing power and ensuring an economy that effectively adapts to market fluctuations. A Future of Economic Transformation and Global Competitiveness As challenging as this transition is, it sets the stage for Ethiopia to achieve macroeconomic stability, drive high and stable economic growth, control inflation, and develop a globally competitive economic system. However, it will be crucial to closely monitor the application of these reforms and their impact on the economy, learning from both the successes and setbacks experienced by other countries. This period of transformation could redefine Ethiopia’s economic landscape, offering a chance to overcome past hurdles and seize new opportunities for prosperity on the global stage.

Ethiopia to Begin Power Exports to Tanzania in September, Expanding Regional Energy Network

Ethiopia to Begin Power Exports to Tanzania in September, Expanding Regional Energy Network Ethiopia is set to commence electricity exports to Tanzania next month, according to Ethiopian Electric Power CEO, Engineer Ashebir Balcha. The power transmission is expected to begin by mid-September, following the completion of necessary preparations. This development is part of Ethiopia’s broader strategy to increase its electricity export revenue. So far this year, the country has earned over $140 million from energy exports, marking a 6% increase compared to the previous year. Ethiopia currently supplies power to Djibouti, Sudan, and Kenya, with Tanzania soon to join this network. The planned power exports to Tanzania are aligned with Ethiopia’s ongoing efforts to expand its regional energy connections. The country has plans to extend its power grid to other neighboring countries, including South Sudan and Somaliland. The existing power line between Ethiopia and Kenya is expected to facilitate these future connections. In addition to the upcoming electricity exports to Tanzania, Ethiopia is also working on the Kenya-Tanzania power line, which is projected to be completed by November 2025. This infrastructure project is anticipated to enhance the regional energy network, contributing to more integrated energy systems across East Africa. Ethiopia’s energy export strategy is supported by its substantial renewable energy resources, particularly from hydropower projects such as the Grand Ethiopian Renaissance Dam (GERD). Once fully operational, the GERD is expected to significantly boost Ethiopia’s electricity generation capacity, enabling the country to meet both domestic and regional energy demands. The initiation of electricity exports to Tanzania represents a significant step in Ethiopia’s efforts to strengthen its role in the East African energy market. As the country continues to expand its energy infrastructure and export capabilities, these developments are likely to have broader implications for regional energy cooperation and economic growth.

Grand Ethiopian Renaissance Dam Reaches New Milestone with Units 7-10 Fully Operational

Grand Ethiopian Renaissance Dam Reaches New Milestone with Units 7-10 Fully Operational Addis Ababa, Ethiopia – The Grand Ethiopian Renaissance Dam (GERD) has reached another significant milestone with the successful activation of Units #7, #8, #9, and #10, which are now fully operational. These developments are part of Ethiopia’s broader efforts to enhance its power generation capacity and secure energy independence. Unit #7 began generating power today, initially producing 25 MW and is expected to rapidly scale up to its full capacity of 400 MW. The activation of these units is crucial to the ongoing progress of GERD, which, once fully operational, is set to be the largest hydroelectric power plant in Africa. The GERD project, situated on the Blue Nile River in the Benishangul-Gumuz region, is designed with a total of 13 turbines. The dam’s overall installed capacity is 5,150 MW, derived from: Eleven turbines, each with a capacity of 400 MW, located in Units 4, 5, 6, 7, 8, 11, 12, 13, 14, 15, and 16. Two turbines, each with a capacity of 375 MW, situated in Units 9 and 10. This mix of turbine capacities brings GERD’s total installed capacity to: [\text{Total Capacity (P)} = (11 \times 400) + (2 \times 375) = 4,400 + 750 = 5,150 \text{ MW}] With the current units online, GERD is significantly boosting Ethiopia’s power generation capabilities, supporting both domestic energy needs and the country’s ambitions to export electricity to neighboring countries. The next stage of GERD’s development includes the planned activation of two additional turbines, which is expected to occur after the dam’s fifth filling, scheduled for September. This step will further enhance the dam’s generating capacity and solidify its role as a key asset in Ethiopia’s energy infrastructure. GERD, a flagship project for Ethiopia, is central to the country’s vision of economic development and energy security. The dam has been under construction since 2011 and, once fully completed, will not only provide a significant boost to Ethiopia’s power supply but also contribute to regional stability through energy trade. The project has been closely monitored both domestically and internationally, given its scale and the implications for water resource management in the Nile Basin. As the dam continues to progress, it remains a focal point in Ethiopia’s strategy to become a regional energy hub, leveraging its natural resources to drive sustainable development.

Addis Insight Unveils Advanced Ethiopia Birr Currency Exchange Platform

Addis Insight Unveils Advanced Ethiopia Birr Currency Exchange Platform Addis Ababa, Ethiopia – Addis Insight is excited to announce the launch of its innovative Ethiopia Birr (ETB) currency exchange platform, designed to provide users with accurate and real-time exchange rates against major global currencies. The platform features a powerful currency converter and delivers daily forex updates sourced from Ethiopia’s leading banks. The currency exchange service allows users to convert ETB to a wide range of currencies, including the US Dollar (USD), Euro (EUR), Japanese Yen (JPY), and many others. This tool is tailored to meet the needs of travelers, businesses, and investors who require reliable and up-to-date currency information. Daily forex updates are aggregated directly from top Ethiopian banks, including Abyssinia Bank, Dashen Bank, Commercial Bank of Ethiopia, Awash Bank, Amhara Bank, Oromia Bank, Hibret Bank, Ahadoo Bank, Zemen Bank, and the National Bank of Ethiopia. By consolidating data from these trusted institutions, Addis Insight ensures that users have access to the most accurate and current exchange rates available. The Addis Insight currency exchange platform is now live and accessible to users across the nation. For more information, visit [website link]. About Addis Insight:Addis Insight is a leading digital media platform in Ethiopia, offering insightful news, analysis, and tools that empower individuals and businesses to make informed decisions. Our mission is to bridge the information gap in Ethiopia by providing accurate, timely, and relevant content.

Third-Party Insurance Premiums Surge by 500%: Major Coverage Boost Announced

Third-Party Insurance Premiums Surge by 500%: Major Coverage Boost Announced New Third-Party Insurance Policy Increases Coverage and Premiums A significant change has been made to third-party insurance in Ethiopia, with coverage limits and premium prices seeing substantial increases. The new policy, which takes effect today, raises the maximum coverage for third-party insurance from 500 birr to 3,000 birr. This adjustment is part of a broader initiative to enhance the protection offered by third-party insurance. As part of these changes, premium prices have surged by up to 500 percent. This increase aligns with the newly established third-party liability limits, reflecting the expanded coverage now available under the revised guidelines. According to the updated third-party liability guidelines, the amount allocated for emergency medical services has seen a significant rise. Previously capped at 2,000 birr, the new limit has been set at 15,000 birr, providing greater financial support in case of medical emergencies. Furthermore, compensation for fatal incidents and bodily injuries has been notably enhanced. The previous limit of 40,000 birr for death-related claims has now been increased to 250,000 birr. Similarly, the compensation for bodily injuries, which was also capped at 40,000 birr, has been raised to 250,000 birr. These changes aim to provide better protection and more substantial financial support for those affected by third-party incidents, ensuring that the insurance system is more responsive to the needs of policyholders.

Somalia Threatens to Suspend Ethiopian Airlines Over Sovereignty Violations

Somalia Threatens to Suspend Ethiopian Airlines Over Sovereignty Violations The Somali Civil Aviation Authority (SCAA) has raised significant concerns regarding Ethiopian Airlines and its flight operations within Somalia, particularly highlighting issues related to the violation of Somalia’s sovereignty. On August 14, 2024, the SCAA sent a formal letter to Ethiopian Airlines outlining their concerns about the airline’s approach to operating flights to Somali destinations. This letter was the result of ongoing discussions between SCAA officials and Ethiopian Airlines representatives in both Mogadishu and Addis Ababa, with the involvement of the Ministry of Transport and Civil Aviation. Rather than addressing the sovereignty issues directly, Ethiopian Airlines altered its flight information by removing the names of Somali destinations and replacing them with airport codes. While this might appear to be a minor adjustment, it has only intensified the original concerns. In addition, the SCAA has been receiving numerous complaints from Somali travelers about their experiences with Ethiopian Airlines. These complaints highlight a disconnect between the airline’s practices and the expectations of Somali passengers, particularly regarding respect for their national identity. The SCAA has issued a firm deadline to Ethiopian Airlines, stating that if the issues are not resolved by August 23, 2024, all Ethiopian Airlines flights to Somalia will be suspended indefinitely. The authority emphasized that this suspension would occur without any further notice. In a related development, the Civil Aviation Authority of Eritrea’s Ministry of Transport and Communications has also announced the suspension of Ethiopian Airlines flights. This suspension, effective from September 30, 2024, was announced today in the government newspaper “Hadas Eritrea” and later confirmed by Ethiopian Airlines. The Eritrean Civil Aviation Authority grounded the airline due to what it described as “organized and systematic” abuse of Eritrean passengers. The airline was accused of engaging in improper procedures, including the theft of passengers’ luggage, frequent flight and baggage delays, and a failure to compensate passengers. Additionally, the authority cited an unreasonable increase in ticket prices as another reason for the suspension. The Civil Aviation Authority of Eritrea stated, “Repeated reminders given to Ethiopian Airlines to resolve the above-mentioned problems did not yield results, and from September 30, 2024, Ethiopian Airlines flights to Eritrea have been suspended.”