Postal Giants New Venture Pressures Street-Level Drafters to Fold

May 7 , 2025.

Ethiopost, the state-owned postal service provider, plans to launch document drafting services in partnership with the federal Documents Authentication & Registration Service (DARS), alarming small business owners who provide these services. Internet cafes and stationery shops near DARS branches fear losing their livelihoods as federal authorities move to streamline and standardise document preparation processes through Ethiopost.

Rebranded in 2019 to Ethiopost, it offers postal services, including mailbox rentals and mail and parcel delivery for various public and private agencies. It is one of the oldest federal institutions, first formed in 1894 under the reign of Emperor Menelik II, and currently employs nearly 2,300 people.

The federal postal operator squeezed out a modest profit last year, posting net income of 138.9 million Br for the fiscal year ended July7, 2024, a 2.7pc drop  from the previous year. Revenue jumped almost 25pc to 1.46billion Br as more Ethiopians shopped online and small businesses leaned on courier services to reach customers. However, gross margin slid to 58.5pc from 62.6pc as direct costs soared 38.4pc to 606.96 million Br. Operating expenses rose 17.8pc to 681.99 million Br, leaving earnings before interest, taxes, depreciation and amortisation stuck at 221.7 million Br, essentially flat from a year earlier.

Nimble private couriers, higher fuel and labour bills, and rapid shifts toward digital payments favouring techsavvy newcomers have affected Ethiopost's profitability. Management has tried to keep pace by joining public private delivery networks and partnering with fintech firms to extend service into hard to reach rural areas.

Recently, it expanded its role into handling passports for the Immigration & Citizenship Service and supporting the Fayda National ID Programme. Its latest venture, formalised in an agreement signed with DARS on April 24, 2025, involves providing official document preparation services, a market traditionally dominated by small private businesses near DARS' 17 branches, including one in Dire Dawa.

DARS, a federal agency tasked with authenticating and registering legal documents such as loan contracts, inheritance deeds, powers of attorney, and sales agreements, offered in-house document drafting. Fees varied widely, ranging from 250 Br for power of attorney documents to 1,500 Br for condominium sales. Power of attorney documents in English would cost 400 Br. However, this arrangement strained DARS resources, prompting a policy shift toward customers filling out forms themselves, leaving DARS to handle only authentications.

The policy shift unexpectedly spurred the growth of small businesses drafting documents. Internet cafes and stationery shops near DARS branches seized the opportunity, offering services directly to customers. Yet, the government's recent decision to transfer drafting responsibilities exclusively to Ethiopost has these small businesses worried.

Under the new arrangement, individuals seeking document drafting services will no longer need to visit DARS branches. Ethiopost plans to offer these services directly at local post offices.

According to Belayneh Mamush, Ethiopost's director of Marketing & Communications, the goal is "fair and uniform" pricing nationwide, addressing inconsistencies among private providers whose fees vary depending on their location. He also stated the importance of reducing fraud by ensuring better tracking and accountability for drafted documents. He disclosed that Ethiopost would hire new employees to handle these services and expressed openness toward partnering with existing drafting providers, provided they adapt to Ethiopost's new requirements.

"Those who meet these standards could receive training and potentially continue working under us," Belayeneh told Fortune.

Despite Ethiopost’s assurances, anxiety runs deep among small business owners whose livelihoods depend on these services. Many affected are women supporting families, struggling to pay rent and school fees.

Meseret Legesse, who has provided drafting services near a DARS branch in Ayer Tena for several years, could not conceal her dismay at the decision. She blamed DARS for not consulting existing businesses about fee structures or operational improvements before handing the entire service to Ethiopost.

Another affected woman, Alem Meseret, who has worked near a DARS office in Megenagna for over nine years, argued that the fees charged by small businesses are reasonable considering high operational costs such as rent and taxes. According to her, DARS, rather than the drafting businesses, is responsible for rejecting fraudulent documents, stating that her business and others like it have been unfairly targeted.

Other drafting providers echoed these sentiments.

Jemanesh Shiferaw from Addis Abeba’s Sidist Kilo area questioned the fairness of the decision, noting it favours Ethiopost while ignoring the loss inflicted on their businesses. She urged DARS officials to reconsider the new policy, adopting a hybrid system allowing existing providers to continue alongside Ethiopost.

Mustofa Abdella, an economist and a business consultant at Zafer Plus Business & Investment Consultancy Services, concurred. He urged the authorities to ensure gradual transitions, training, and support measures to ease the impact on the small enterprises. He criticised DARS' officials for not adequately consulting the affected small businesses before announcing the change. He warned of potential disruptions, particularly for family-operated shops heavily dependent on document drafting services.

DARS Director General Hamid Kinisso defended the decision. He cited public complaints over inconsistent fees and inefficiencies in the existing system. According to Hamid, partnering with Ethiopost seeks to improve accessibility, affordability, and transparency. He argued that the shift toward online document drafting services would eventually render the existing model unsustainable, advising drafting providers to adapt proactively to forthcoming changes.

Hamid reassured that Ethiopost is prepared to incorporate current drafting providers who fulfil the necessary criteria. He noted that these businesses could continue as either Ethiopost employees or authorised agents.

Customers expressed mixed views about the new arrangement.

Endalk Damtew, who frequently uses drafting services, praised the speed and convenience of local internet cafes but remained hopeful that Ethiopost could provide comparable quality at lower fees. Azeb Damtew, another customer, found current fees reasonable and questioned whether Ethiopost would deliver the same quality of service at reduced fees.

Commercial law expert Alebel Ashagrie, also a principal attorney at Alebel Ashagrie & Associates, noted that the government is legally justified in changing the service delivery model due to the absence of formal contracts between DARS and drafting businesses. However, he acknowledged the economic consequences facing long-established drafting providers and advised the officials to pursue an equitable transition strategy.

"Drafting businesses could seek administrative remedies if the process fails to address their legitimate concerns fairly," he said.

PUBLISHED ON May 07,2025 [ VOL 26 , NO 1306]

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