This archive report was first published on 30 June 2019.
On June 30, 2019, Foreign Affairs Chief Administrative Secretary Ababu Namwamba highlighted the challenges facing trade between Kenya and Ethiopia during the commemoration of their 55-year relationship in Nairobi.
Despite signing several bilateral agreements and implementing trade-friendly measures, the two countries are still struggling to conduct robust trade between them.
According to Mr. Namwamba, non-tariff barriers, including long bureaucratic procedures, bans, and sanctions, are major hindrances to bilateral trade.
Another challenge cited is the strict foreign currency regulatory regime by the National Bank of Ethiopia, which affects all foreign nationals, including those running small enterprises.
Kenya and Ethiopia have established the Joint Ministerial Commission (JMC) to drive bilateral ties and have signed over 30 agreements and MoUs covering various economic, social, and political spheres.
However, Mr. Namwamba noted that despite these agreements, the bilateral trade between the two countries remains low.
“Despite all these very impressive agreements and JMC, regrettably the bilateral trade between our two countries remains quite low,” said Mr. Namwamba.
Ethiopian Ambassador to Kenya Meles Alem emphasized the importance of strengthening economic ties between the two countries, stating that they complement each other.
“Ethiopia and Kenya complement each other. As we celebrate 55 years of strategic partnership, this is the beginning of more to come. We are not rivals. Maybe the only thing we compete each other on is athletics,” he said.
Mr. Alem also highlighted the need to improve social relationships between Kenyans and Ethiopians, as well as boost the relationship between Kenya’s institutions of higher learning with their Ethiopian counterparts.
The recent entry of Equity Bank into the Ethiopian market is seen as a boost for Kenyans intending to venture into the Ethiopian market.
Current reforms and liberalisation in Ethiopia, and Kenya’s adoption of an open-door policy for Africans, are also expected to further enhance the relationship.
Kenya, Ethiopia, and South Sudan are jointly implementing the Lamu Port South Sudan Ethiopia Transport corridor project launched in 2012, which aims to link the three countries through infrastructure.
“Plans are underway to launch operations of the Port of Lamu during the next visit by Prime Minister Abiy Ahmed in Kenya in the next few months,” said Mr. Namwamba.
