Kenya commits to enhance its relations with Ethiopia

The Kenyan government has reiterated its commitment to courting neighbouring Ethiopia to hasten the adoption of their special status agreement for the economic and security benefits of their citizens.

Ethiopia and Kenya are committed to establishing unassailable bilateral cooperation that could enhance trade between them, said East African Community and Regional Development Principal Secretary Kevit Desai on Wednesday.

“There are efforts in place as far as commerce is concerned and this has so far yielded [greater] cooperation between the two countries, and we believe that a more enhanced bilateral cooperation will in turn lead to Kenya exporting her manufactured goods to the Ethiopian market with a population of over 100 million people,” Dr Desai said.

The bilateral talks envisioned enhancing the free movement of goods and people, especially through the Moyale-Ethiopia One-Stop-Border Post, he added.

Though Ethiopia is not part of the East African Community (EAC), the highest level of structured and special bilateral cooperation is needed to enhance free trade between the two countries.

The courtesy visit sought to collect views from the partners and discuss bottlenecks and the best way to harness the latent commerce potentials in the region.

The PS said Kenya could reap massively from the Ethiopian market by exporting its manufactured goods.

He spoke during his tour of Marsabit County, where he met national government and county government officers, local private sector players and NGOs.

His remarks came two weeks after the Moyale business community decried frustration at the Ethiopia-Kenya border.

According to Kenyan customs officials at the Moyale OSBP, efforts between Kenya and Ethiopia to reorient their economies to boost bilateral trade have been cherished but there have been challenges.

Despite the strides made by the two sides, the Moyale OSBP remains largely underperforming.

Customs and Border Control Assistant Manager Collins Wangala, cited bureaucratic delays, high taxes, and tariffs as some of the main challenges that have for decades hampered closer ties, including enhanced trade between Kenya and countries such as Ethiopia, Djibouti, Eritrea and Egypt.

Due to the unfavourable trade terms, Ethiopia and Kenya have not been able to harmonise the growth of business and investment on their border.

Though Moyale OSBP on the Kenyan side is operational, trade is not optimal. But the Ethiopian side is busy as it receives sawdust, raw plastic and cooking oil. Finished products such as empty bottles are also key imports from Kenya.

Ethiopia heavily relies on Kenya for glass and plastic bottles for their beer and bottled water.

Aluminum products

Kenya, for its part, relies on Ethiopia for cement, aluminum products, soap, lubricants, waxes, candles, modelling pastes, inorganic chemicals, precious metal compounds and others.

Another cause for alarm on the Kenyan side is that Ethiopia continues to woo investors from China and Europe to set up factories to produce some of the products they import from Kenya.

Mr Wangala said the Ethiopia-Kenya OSBP, unlike other regional border points, is not anchored on revenue as it is mainly premised on deterring illegal movement.

The station generates only Sh40 million.

He was saddened that the decision-making channel was lengthy on the Ethiopian side as officials must get communication from Addis Ababa before they act.

“Diplomatically, the Ethiopians are sceptical about nearly everything about Kenya. However, they’re slowly beginning to embrace Kenyans,” Mr Wangala said.

He said Kenya was in talks with Ethiopia to ensure that both sides harmonised the loads law.

Repatriation of Ethiopians found to be in Kenya illegally sometimes also sours relations between Ethiopia and Kenya.

But Mr Wangala was still optimistic that ongoing discussions between Kenya and Ethiopia would yield the desired outcome.

Impounding vehicles

Moyale businessman Mzee Abdullahi Suleiman said the Ethiopian authorities have been impounding vehicles and motorcycles with Kenyan number plates in the last month, creating an unconducive trading environment.

But the Ethiopian authorities sought to allay fears they were seeking to lock Kenyans out of their country, arguing that the security crackdown targeted even Ethiopian vehicles and motorcycles.

Mr Suleiman added that Kenyan traders were no longer able to buy some of the cheap Ethiopian manufactured products such as cement.

Kenya National Chamber of Commerce and Industry (KNCCI) member Caleb Churchill also decried the thriving unscrupulous trade along the porous Ethiopia-Kenya border that has denied Kenyan authorities revenues through tax evasion.

He appealed to the Kenyan government to subsidise fuel prices so as to cushion citizens against high prices of goods.

“We appeal to the Kenyan government to lower the fuel prices just like neighbouring Ethiopia to cushion citizens against inflation,” Mr Churchill said.

Moyale-based mechanic John Njenga, for his part, lamented the skyrocketing prices of goods in the frontier town as they had to depend on goods from Nairobi, which is over 800km away, instead of those from Ethiopia, which is only 5km away, due to the unfavourable business environment at the border.

Kenya and Ethiopia are among Africa’s leading economic powerhouses.

While Kenya’s economy has attained middle-income status and is growing at 5.6 percent, Ethiopia’s economy grew by 11 percent in 2015.

Trade between the two countries has been increasing, leading to more business opportunities to be explored.

Total trade between Kenya and Ethiopia increased from Sh2.2 billion in 2004 to about Sh7.4 billion in 2014.

As of January 2022, the volume of trade in Kenya amounted to Sh254.7 billion, about $2.2 billion.