This archive report was first published on 30 June 2019.
June 30, 2019
Kenya and Ethiopia have been struggling to boost trade between them, despite signing several bilateral agreements and implementing trade-friendly measures.
Foreign Affairs Chief Administrative Secretary Ababu Namwamba pointed out non-tariff barriers, including long bureaucratic procedures, bans, and sanctions, as major hindrances to the current subdued bilateral trade.
Another challenge cited is the strict foreign currency regulatory regime by the National Bank of Ethiopia, which affects all foreign nationals, particularly those running small enterprises.
Mr. Namwamba made these remarks during the commemoration of the 55-year relationship between Kenya and Ethiopia in Nairobi.
In 2012, the two countries signed an agreement for preferential access aimed at fostering economic cooperation, emphasizing trade, investment, infrastructure, food security, and sustainable livelihoods.
Kenya and Ethiopia have established the Joint Ministerial Commission (JMC) to drive bilateral ties, in addition to over 30 agreements and MoUs covering various economic, social, and political spheres, including security, defense, and trade.
“Despite these impressive agreements and the JMC, regrettably, the bilateral trade between our two countries remains quite low,” said Mr. Namwamba.
Meles Alem, Ethiopian Ambassador to Kenya, expressed optimism about the future of the relationship, stating, “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 emphasized the importance of deepening economic ties between the two countries, as well as strengthening social relationships and cooperation between institutions of higher learning.
The recent entry of Equity Bank into the Ethiopian market is seen as a positive development for Kenyans looking to venture into the Ethiopian market.
Current reforms and liberalization in Ethiopia, combined with Kenya’s open-door policy for Africans, are expected to further enhance the relationship, according to Mr. Namwamba.
Kenya, Ethiopia, and South Sudan are jointly implementing the Lamu Port South Sudan Ethiopia Transport corridor project launched in 2012, aiming 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.
