News / Ethiopian air cargo facility will kickstart Africa's e-commerce sector

Photo: Boeing

Ethiopian Airlines (ET) has invested $55m in a new e-commerce facility in response to rising demand in Africa and other global regions.

 The facility at Bole International Airport in Addis Ababa has capacity for 150,000 tonnes of goods a year and  ET claims it  represents a significant change in the way e-commerce will be facilitated .

At the unveiling last week, group CEO Mesfin Tasew said the facility was probably the first of its kind in Africa, and put the e-commerce industry in the continent on global trend.

“We are driven by a pan-African spirit and likewise, Ethiopian Cargo has been playing a critical role in transporting the most important items to and from Africa,” he said.

E-commerce is booming globally, but adoption in Africa has been slower than in other regions. But Mr Tasew reckons its just a matter of time until the continent sees e-commerce as a way of life, and as a way of doing business and trade.

He said: “It has to start somewhere, so we are taking a pioneering role in investing and building this facility. Gradually, we believe the portion of e-commerce logistics will grow in parallel with the conventional air cargo, so this is just the beginning.”

There were specific issues that needed to be tackled to smooth out e-commerce development on the continent, said Mr Tasew.

“If you are in Nigeria, for instance, and want to buy a book from Amazon, Amazon expects you to pay in dollars. So if you only have the local currency, the naira, it becomes problematic and, therefore, the banks have to be ready to manage such currency differences,” he said.

He also mentioned the need for better alignment of customs processes across the continent. But Mr Tasew insisted that the new facility was only the logistics side of e-commerce, and more collective efforts were required to make the sector run more smoothly.

ET plans to work closely with Chinese e-commerce giants, like Alibaba, and Amazon, which already transports e-commerce goods from China to other parts of the world under a strategic agreement with the two companies.

“So essentially, we can now bring the goods from these companies to Addis Ababa, sort it here and re-aggregate it, and then ship to our African destinations,” he added.

And Mr Tasew didn’t rule out opportunities to establish similar facilities in other African countries, like Nigeria, in the future.

According to Mr Tasew, the new facility lays the foundation for the realisation of major African economic initiatives, such as the African Union Agenda 2063, the blueprint for transforming the continent into a global powerhouse, and also the African Continental Free Trade Area programme.

“With this facility, we are establishing an essential trade link among African countries and between Africa and the rest of the world,” he said.