Why new border stop is yet to enhance Kenya-Ethiopia trade

What you need to know:

When Kenya and Ethiopia launched the Moyale one-stop border post (OSBP)in December, it was hoped that the impact of the facility would be immediately felt.
After decades of subdued bilateral trade, largely due to non-tariff barriers such as long bureaucratic procedures, bans and sanctions, the facility was expected to usher in an era of seamless trade between the two countries.
The new border crossing is meant to consolidate clearances for travellers, and transporters, under one roof so that they do not have to undergo two processes for approval.

When Kenya and Ethiopia launched the Moyale one-stop border post (OSBP)in December, it was hoped that the impact of the facility would be immediately felt.

After decades of subdued bilateral trade, largely due to non-tariff barriers such as long bureaucratic procedures, bans and sanctions, the facility was expected to usher in an era of seamless trade between the two countries.

The new border crossing is meant to consolidate clearances for travellers, and transporters, under one roof so that they do not have to undergo two processes for approval.

But it appears they will have to wait longer to reap the dividends of the facility on lack of harmonised border operations.

It takes about 21 hours and 52 minutes for people and goods to cross into Ethiopia from Kenya and 12.5 hours from Ethiopia into Kenya, a new report shows.

To address the challenge, TradeMark East Africa (TMEA) is working with both the countries to reduce the barriers.

“The two governments are jointly reviewing and harmonising OSBP legal framework and operation procedures towards a common approach laying the foundation for operationalising the OSBP,” TMEA’s 2019/2020 Innovation Resilience Recovery annual report shows.

TMEA hopes to reduce the time taken to cross the border by at least 30 percent.

“Additionally and to complement the OSBP, the two countries have identified areas of priority being security and removal of non-tariff and technical barriers to trade so as to encourage the private sector not only to utilise the corridor, but also the OSBP,” the report notes

Meanwhile, joint training and sensitisation of border personnel, adjacent communities, and traders has started even as stakeholders wait for the two governments to iron out the kinks.

“The adoption of ICT and installation of computers, furniture and backup power infrastructure are ongoing in readiness for full operations,”said TMEA which besides Moyale also supported Taveta, Busia and Malaba border posts, which have significantly eased trade with Tanzania and Uganda.

The border post holds great potential for products in six trade sectors such as food, beverages, pharmaceuticals, cosmetics and petroleum.

It is also strategically located along the emerging Nairobi- Moyale-Addis Ababa, and the Lamu Port South Sudan Ethiopia Transport (Lapsset) Corridors.

Launched in 2012, Lapsset will also include an oil pipeline that would run from the Kenyan port of Lamu to Addis Ababa, among other major infrastructure projects aimed at improving connectivity and boosting bilateral trade in the region

Kenya and Ethiopia in 2012 signed an agreement for preferential access aimed at fostering economic co-operation, emphasising on trade, investment, infrastructure, food security and sustainable livelihoods.

The two countries also established the Joint Ministerial Commission (JMC) tasked with driving bilateral ties, in addition to more than 30 agreements and MoUs spanning nearly all economic, social and political spheres including security, defence and trade, movement of people, transport, and culture.

“Serving as a critical regional interconnectivity node and a transit link from Ethiopia to the ports of Mombasa and Lamu, the OSBP is expected to increase efficiency along the corridor, and enhance East Africa Community - Horn of Africa (Ethiopia) economic integration,” the TMEA report added.