Following repeated attempts to address the distribution challenges of commodities in the city, the Addis Ababa Trade Bureau is adopting a digital system developed by Makiba General Trading Plc.

The system, dubbed Agelgil Delivery, was incepted three years ago with an investment of 5.5 million Br. It aims to deliver government-subsidised consumable goods such as sugar and edible oil directly to consumers, bypassing Consumer Associations.

The company sought permission from the Addis Ababa Trade Bureau to digitise coupons used to streamline commodities, and the request was granted. A pilot program was launched in Kolfe Keranio District Wereda 08 in July 2022, delivering sugar from the Consumers Association.

After the officials observed improved distribution, the service was expanded to Weredas 1, 6, 9, and 10 in July 2022.

The decision was met with apprehension from Consumer Associations, who were dismayed by the shift, which prompted Agelgil to suspend delivery services for a year.

According to General Manager Awash Mohammed, the company lost over 3.2 million Br during that period.

Makiba Trading, which previously distributed goods from factories and wholesalers to shops, was founded five years ago with a capital of 16,000 Br. Its flagship service, Agelgil, came into effect during the COVID-19 pandemic.

Agelgil has registered over 100,000 customers in the 10 Weredas of Kolfe Keranio District. According to Awash, it has monthly expenses of around 850,000 Br, 10-15 employees per Wereda, and a profit margin of 0.80-1.25 Br.

"Our goal here is to deliver, not to squabble," Awash told Fortune.

The company was not initially interested in purchasing and selling sugar, as it would require significant resources and capital. However, because the Bureau wants it that way, they are demanding to be supplied with sugar on credit and to pay after delivery.

Ethiopia's local sugar consumption demand was estimated at 1.2 million tonnes in 2020/2021, compared to 340,000tn of local production. As of June 2022, the Ethiopian Sugar Industry Group (ESIG) has procured 100,000tn of sugar, with an annual production capacity of 450,000tn.

Addis Abeba City Administration subsidised eight billion Birr for commodities such as sugar and petroleum and distributed half of the planned one million quintals of sugar in the last fiscal year due to a supply shortage.

The Addis Abeba Trade Bureau has had difficulty monitoring the distribution channel and frequently clashes with Consumer Associations over a lack of transparency. According to the Bureau's annual report, 82.9qtl of illicitly distributed sugar was seized last year.

Sewnet Ayele, a communications officer for the Bureau, claims that the Associations frequently fail to match the amount of sugar delivered with the number of people in the area. He stated that a one-month trial with the digital delivery system has earned them an extra 60qtl from one district, with plans to implement it across the city.

"It is a good relief," said Sewnet.

However, consumer associations are having trouble adjusting to the system.