Hefty Deposit Thresholds Threaten Maritime Labour Export Ambitions

Jun 21 , 2025. By RUTH BERHANU ( FORTUNE STAFF WRITER )

Mufariat Kamil, minister of Labour & Skills (MoLS), is rewriting the rules on overseas work, hoping to export skilled labour rather than being limited to housemaid services.

A bill her experts have circulated would let fully foreign-owned outsourcing agencies operate in the country and launch in the maritime trade, where her officials want Ethiopia, though landlocked, to supply crews to world shipping lines. The Ethiopian Maritime Training Institute S.C. (EMTI), in partnership with Bahir-Dar University, graduates more than 500 marine engineering and electro-technical officers each year. Its executives want to see this figure doubled.

The Ethiopian Manning Agency GmbH places graduates with established carriers, transforming classrooms in the Amhara Regional State into a talent pool for vessels thousands of miles away.

The bill encourages foreign agencies that can train workers and secure placements, a step Mufariat and her officials believe is needed, as experienced local agents are scarce. The measure also shifts labour-export policy toward jobs that require credentials, starting with seafarers but designed to extend later to other skilled occupations.

The existing law, written mainly for housemaids bound for the Gulf countries, left professionals such as officers and engineers out in the cold. When the Ministry assumed the mandate of overseas employment, it began drafting a replacement, hoping to curb illegal brokerage and murky fees through a central labour market information system and stricter oversight. Close to 92pc of the 521,000 workers sent since 2023 have passed through this system.

“The draft law introduces major changes to the outsourcing of Ethiopian workers,” said Sitina Mengistu, a legal adviser at the Ministry.

Under existing rules, agencies cannot send workers abroad unless Ethiopia has a bilateral deal with the destination country. The bill would permit outsourcing through Ethiopian consulates, even in the absence of a bilateral agreement. It also lets the Ministry work with foreign companies to train and certify labour that could later be hired overseas.

“We'll work out the details during implementation to ensure it complies with conflict-of-interest rules and allows qualified foreign maritime agencies to operate here," she told Fortune.

Money is where the draft bites. Employers should pay for contract authentication, but workers still bear the costs of passports, police clearances, birth certificates, and training. Agencies would need capital of five million Birr to 20 million Br and are required to park bonds of 50,000 to 250,000 dollars in blocked accounts, thresholds that rise with the license class. Those funds cannot be drawn down for day-to-day expenses, removing an incentive that agencies previously leveraged to secure credit or earn interest.

However, the deposit required unsettles smaller outfits such as Bereka, an Addis Abeba-based agency that mainly places housemaids, drivers and occasional hairdressers. Its managers say they lack the cash for a lump-sum deposit.

“We want to send skilled labour to foreign employment," said Mohammed Awel, a founding shareholder. "If the Ministry makes things possible, we want to be part of it.”

However, he feared that the blocked-account rule was a burden the firm could not overcome.

Resistance is spreading inside the Ethiopian Overseas Employment Agencies Federation. Its members have discussed the issue twice.

"Most agencies opposed its core ideas,” said Seid Ahmed, the group’s public-relations head and a board member.

Seid faults the bill for omitting crisis-management plans for natural disasters or diplomatic rifts and questions whether many companies can afford the annual renewal fees or the value lost on the deposit that earns no interest.

“This could severely damage the sector," he said, warning that up to 80pc of agencies could close if the thresholds stand. "We play a crucial role in generating foreign currency income.”

According to Aseged Getachew, an economist by training and former state minister for Labour, local firms rarely recruit directly. Instead, they sign deals with foreign partners and earn commissions of about 900 dollars a worker, an amount that often drops to 500 or 600 dollars when they chase volume.

“It's a volume game," he told Fortune. "Sometimes, you've got to compromise to stay in the business.”

Aseged sees upside in letting established maritime agencies to run operations in Ethiopia, arguing that trained officers could boost foreign-currency earnings.

“We've the workforce, and with the right channels, we can become a key player in the global maritime labour market,” he said.

Still, he finds gaps. The bill does not say which local agencies may focus on skilled labour, and none now do. He also fears the quarter of a million dollars in deposits will deter most players and leave the field to a few well-funded firms. Without clearer tiers, he warned, larger companies might encroach on roles intended for smaller ones.

“Unless these barriers are reconsidered, we risk locking out the very actors who’ve kept this sector alive,” he warned.

Officials say they will listen, and the bill remains open for comment. Federation members are drafting counterproposals that lower bond levels, stagger renewal fees, and outline how to rescue workers in the event of a war or pandemic. Employers, meanwhile, are crunching numbers to see whether higher service charges can offset the tougher rules.

PUBLISHED ON Jun 21,2025 [ VOL 26 , NO 1312]