This archive report was first published on 23 September 2021.
On September 23, 2021, Kenya and Ethiopia took a significant step towards enhancing trade and economic cooperation by signing a deal for a free trade area.
The agreement, which includes the Moyale One Stop Border Post (OSBP) Procedure Manual, is expected to give the two countries a competitive edge in the trade of goods.
The deal is designed to simplify the process of conducting business at the border, particularly for small-scale traders, and to harmonize the trade regimes of the two countries, especially in the agricultural sector.
This move is also expected to facilitate the growth of the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project, which will rely on the OSBP for accelerated services and improved infrastructure.
Furthermore, the agreement aims to address security concerns such as human and drug trafficking by reopening the Moyale border post and promoting legitimate trade and movement of people.
Kenya and Ethiopia's move comes at a time when Tanzania has ratified the African Continental Free Trade Area (AfCFTA) agreement, which has the potential to connect countries with a total gross domestic product of $3.4 trillion and relax rules of origin and non-tariff barriers.
