Kenya and Ethiopia have struck a new deal in a move aimed at strengthening trade along the two countries' borders.
During a bilateral meeting between Kenya's Trade Cabinet Secretary Lee Kinyanjui and Ethiopia's Dr Kassahun Gofe, Minister of Trade and Regional Integration in Mombasa on Thursday, the leaders agreed to new trade zones.
The new trade zones allow small-scale traders to exchange goods worth up to $1,000 (Ksh129,000, translating to Ksh500,000 in the four months), four times a month, without excessive bureaucratic restrictions.
The ministers agreed to expand designated cross-border trade zones to facilitate smoother and more efficient business for traders.
In Ethiopia, the trade zone has extended to 50 kilometers from the border, while in Kenya, the trade zones have extended 100 kilometers from the border.
During the meeting, the leaders agreed on a common list of products to streamline trade and cut cross-border friction, one of the issues that have been hindering trade between the countries.
Although the ministers have yet to reveal the agreed-upon common list of products, the former list of products of trade between the two countries includes agricultural goods, textiles, plastics, motor vehicle parts, paper, and machinery.
The meeting has also unveiled a new leaf for traders with the four-times-per-month trading limit, promising to curate a structured and reliable schedule.
Previously, there was no fixed frequency for small-scale traders under the Simplified Trade Regime (STR), making transactions more inconsistent.
"That the value of the threshold be Ksh129,500 (USD1000) with a frequency of 4 times per month. That both parties agreed on a common list of Products," the statement read in part.
This change aims to bring structure and predictability to cross-border trade, ensuring traders can operate within a clear framework, and it also aims to reduce smuggling.
Further, the meeting agreed to collaborate on the implementation of the African Continental Free Trade Area (AfCFTA), a trade agreement that aims to create a single market for goods and services across 55 African countries.
Kenya and Ethiopia agreed to develop a Memorandum of Understanding to fast-track the implementation of the African Continental Free Trade Area (AfCFTA) between the two countries..
