Kenya and Ethiopia sign MoU to boost cross-border trade

Kenya and Ethiopia have formalized a Memorandum of Understanding (MoU) to facilitate cross-border trade along the Moyale border, within the African Continental Free Trade Area (AfCFTA) framework. This agreement, reached after two years of negotiations, aims to streamline customs procedures and enhance economic integration between the two nations.

The MoU, concluded in Mombasa, sets a $1,000 threshold for goods and establishes designated trade zones—100 kilometers on the Kenyan side and 50 kilometers on the Ethiopian side. Traders are permitted transactions worth up to $1,000 per trip, with a limit of four trips per month, focusing on a mutually agreed list of goods.

Kenya's Cabinet Secretary for Investments, Trade, and Industry, Lee Kinyanjui, stated, "We are emphasizing that Kenya and Ethiopia will look for ways to implement free trade. This will allow goods from either country to move easily and enable people to work freely across borders."

Ethiopia's Minister of Trade and Regional Integration, Kassahun Gofe, noted, "Details of the deliberations are contained in the agreed minutes matrix. Both parties have committed to collaborating on the implementation of the African Continental Free Trade Area."

Data from the International Trade Centre indicates that Kenya's exports to Ethiopia reached US$86.2 million in 2023, predominantly involving vegetables, mineral fuels, and manufactured goods. Conversely, Ethiopia's exports to Kenya amounted to US$36.7 million, primarily coffee and livestock. The agreement is anticipated to increase formal trade volumes and mitigate informal trade challenges.

Source: Fresh Plaza