Trade Ministry Places New Restrictions On Kenya Border Traders

Ethiopia and Kenya have agreed to limit the number of businesses licenses to conduct cross-border trade to an even 100, limiting traders to USD 1,000 in transactional value a month.

Under the new rules, traders, 50 of which will be from Ethiopia, will only be able to conduct trade within 50 kilometers of the Ethiopian border, while Kenyan officials have seen fit to grant their 50 licensees the freedom to trade within 100 kilometers of their border.

Tages Mulugeta, director of international and regional trade integration at the Ministry of Trade, explains the agreement is meant to serve communities residing along or near the border, lacking access to central markets.

“Now, these people can import commodities from Kenya, and export commodities to Kenya,” he told The Reporter.

Tages stated the deal is hoped to protect mainstream importers and exporters by shielding them from irregularities in the cross-border trade between the two countries.

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Only consumer goods and select basic commodities are permitted under the agreement, according to the Director.

“Permitting all commodities would affect imports and exports in Ethiopia,” he said.

Live animals are among the few major goods that licensees will be able to trade freely, provided they stay under the USD 1,000 monthly limit and adhere to other volume restrictions. One trader is limited to selling or buying five heads of livestock at a time, with exports limited to four instances a month.

Tages told The Reporter that Kenyan trade officials lobbied to set the transaction value ceiling at USD 4,000 per month.

“We had to limit the volume to USD 1,000. Otherwise, the border trade would affect Ethiopia’s mainstream international trade,” said Tages.

He conceded that cross-border smuggling remains a stubborn challenge.

“We hope granting trade licenses to border traders will at least legalize the trend,” said Tages.