Kenya, Ethiopia ink free-cross border trade agreement
Business
By
Willis Oketch
| Apr 23, 2025
The construction of the road linking the Port of Lamu to Ethiopia is 85 per cent complete, Cabinet Secretary for the Ministry of Investments, Trade and Industry, Lee Kinyanjui, has said.
He noted that the completion of the Port South Sudan Ethiopia Transport (LAPSSET) corridor would enhance trade between Kenya and Ethiopia, following the recent signing of a free trade agreement between the two countries.
Talks on cross-border trade between Kenya and Ethiopia have taken 12 years to conclude. On Thursday, the two nations finally signed the agreement, witnessed by top government officials.
Kinyanjui said that with the agreement in place, the next priority is completing the road to facilitate seamless free trade between Kenya and Ethiopia, particularly in the import and export sectors.
He added that following the agreement on trade modalities, communities along the border can now begin trading freely.
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The CS acknowledged that there have been challenges between border communities of the two nations, prompting both governments to explore peaceful ways to foster business relations without conflict.
Kinyanjui and Dr Kassahun Gofe of the Federal Democratic Republic of Ethiopia signed a joint bilateral communique for regional integration.
During the meeting, participants agreed on a list of tradable products and the currency to be used, ensuring that traders from both countries can benefit from the agreement.
"The meeting addressed key outstanding issues, including areas of border trade, trading thresholds, travel frequency, and a common list of products," said Kinyanjui.
He added that the two parties agreed to collaborate on implementing the African Continental Free Trade Area (AfCFTA).
Dr Gofe stated that the agreement would foster peace between the communities living on the border.
As part of the agreement, Kenya will establish a trading centre 100 kilometres from the border, while Ethiopia has already positioned its trading centre 50 kilometres from the common boundary.
Kinyanjui assured the Ethiopian delegation that the Kenyan government is fast-tracking the upgrading of the Lamu-Garissa-Isiolo road, a key part of the LAPSSET corridor, which is now 85 per cent complete.
"The upgrading of the Lamu-Ijara-Garissa to Isiolo section is ongoing. Once complete, it will link the Port of Lamu to Ethiopia. The port is ready for use," Kinyanjui said.
Last year, Ethiopia imported 60,000 tonnes of fertiliser through the Port of Lamu. Kenyan drivers transported the cargo to the Ethiopian border, as vehicles from Ethiopia-many of which have more than seven axles-are banned on East African roads.
Kinyanjui said that discussions also touched on facilitating smooth trade via the Port of Lamu and harmonising axle load limits. Kenya permits a maximum axle load of 56 metric tonnes for vehicles with up to seven axles.
While Kenyan regulations limit axle groupings to a maximum of three, Ethiopia allows up to four.
Last year, Ethiopian Transport Minister Dr Alemu Sime announced that Ethiopia was ready to utilise the Port of Lamu to serve its growing population of 130 million amid rising domestic consumption.
The minister, who witnessed the offloading of the first fertiliser consignment, added that Ethiopian farmers are also keen to use the port to export their agricultural produce.