Kenya and Ethiopia have signed a landmark agreement to ease cross-border trade, setting a $1,000 threshold for goods moving through the Moyale border under the African Continental Free Trade Area (AfCFTA) framework.
- •The Memorandum of Understanding (MoU), concluded after two years of negotiations, aims to simplify customs procedures and foster economic integration between the two neighbors.
- •It was finalized in Mombasa and is poised to invigorate commercial activity in one of East Africa’s key frontier zones.
- •Kenya’s Cabinet Secretary for Investments, Trade, and Industry, Lee Kinyanjui, called the MoU a stepping stone toward broader regional trade liberalization.
“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,” Kinyanjui said.
The agreement sets distinct border trade zones—100 kilometers on Kenya’s side and 50 kilometers on Ethiopia’s side—and permits traders to carry out transactions worth up to $1,000 per trip, with a maximum of four trips per month. The trade will be limited to a mutually agreed list of goods.
“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,” Ethiopia’s Minister of Trade and Regional Integration, Kassahun Gofe, said.
According to the International Trade Centre, Kenya’s exports to Ethiopia hit US$86.2 million in 2023 with vegetables, mineral fuels, and manufactured goods dominating the fold. Ethiopia’s exports to Kenya totaled US$36.7 million, primarily being coffee and livestock.
The move is expected to boost official trade volumes and curb informal trade, often stifled by red tape and inefficient border systems. The United Nations Economic Commission for Africa projects AfCFTA could increase intra-African trade by 40% by 2030.
