### **Expanded Funding Request & Use of Funds Breakdown**
Boaz Trading PLC seeks **ETB 22 million** ($400,000 USD equivalent) to execute its Russian Oil Deal. Below is a detailed allocation of funds, risk-mitigation strategies, and alignment with business objectives:
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#### **1. Oil Imports (60%: ETB 13.2M)**
**Breakdown**:
- **Product Procurement (80%)**:
- **Cost**: $75/barrel for Russian diesel (vs. global benchmark of $90/barrel).
- **Volume**: 15,000 barrels (≈2 million liters) at $75/barrel = **$1.125M (ETB 10.56M)**.
- **Shipping & Insurance (15%)**:
- Freight from Novorossiysk to Djibouti Port: $15/barrel → **$225,000 (ETB 2.11M)**.
- **Import Duties & Taxes (5%)**:
- Ethiopian import tariffs (7%) + VAT (15%) → **ETB 0.53M**.
**Risk Mitigation**:
- **Supplier Diversification**: Allocate 20% of import funds (ETB 2.64M) to secure backup contracts with UAE’s ADNOC.
- **Currency Hedging**: Lock in ETB/USD rates for 70% of import costs via 6-month forward contracts.
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#### **2. Marketing (25%: ETB 5.5M)**
**Breakdown**:
- **African Photo Safari Campaign (ETB 4.5M)**:
- **Photography/Videography**: ETB 2.5M (crew, drones, permits).
- **Launch Event**: ETB 1.2M (venue, catering, influencer fees).
- **Media Buys**: ETB 0.8M (TV ads on Fana Broadcasting, LinkedIn/Facebook campaigns).
- **Local Promotions (ETB 1M)**:
- Fuel vouchers for ride-hailing drivers (ETB 0.5M).
- Rural LPG awareness campaigns (ETB 0.5M).
**Alignment with Goals**:
- **Brand Positioning**: The safari campaign ties Russian oil to Ethiopia’s growth narrative, attracting investors and consumers.
- **ROI**: Target 50+ high-net-worth investor leads and 10% market awareness in Addis Ababa.
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#### **3. Logistics (15%: ETB 3.3M)**
**Breakdown**:
- **Djibouti Port Operations (40%)**:
- Priority berthing fees: $50,000/year (ETB 0.47M).
- Buffer storage lease: 10,000 cubic meters → ETB 0.85M.
- **Inland Transport (50%)**:
- Ethio-Djibouti Railway: ETB 1.2M for 12 dedicated shipments.
- Last-mile trucking partnerships: ETB 0.45M (advance payments to Shegole Transport).
- **Warehouse Security & Tech (10%)**:
- IoT sensors and fire suppression systems: ETB 0.33M.
**Risk Mitigation**:
- **Buffer Stock**: Reserve ETB 0.5M for emergency truck rentals during rail delays.
- **Redundant Storage**: Pre-negotiate warehouse space in Dire Dawa (ETB 0.2M).
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#### **4. Financial Justification**
| **Category** | **Cost (ETB)** | **Revenue Link** |
|-------------------|----------------|------------------------------------------|
| Oil Imports | 13.2M | Direct sales to B2B/B2C (ETB 33M Year 1).|
| Marketing | 5.5M | Brand equity → 10% market share in Addis.|
| Logistics | 3.3M | Enables 72-hour delivery, customer retention.|
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#### **5. Risk Management**
- **Geopolitical Risks**: Allocate 10% of import funds (ETB 1.32M) to diversify suppliers.
- **Currency Volatility**: Hedge $300,000 via Ethiopian banks’ forward contracts.
- **Contingency Fund**: Reserve ETB 1M (4.5% of total) for unplanned regulatory/operational costs.
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### **Conclusion**
Boaz’s funding request is strategically allocated to secure discounted Russian oil, build brand equity through culturally resonant marketing, and establish a logistics network that outperforms competitors. By mitigating risks through diversification, hedging, and contingency reserves, the company ensures efficient capital deployment toward achieving **150% ROI by Year 2**.