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Kenya-Ethiopia One-Stop Border Point to Boost Regional Trade, Logistics

July 1, 2021

The Kenya-Ethiopia One-Stop Border Point (OSBP) in Moyale has begun operating, boosting trade and cargo movement between the two countries.

The move follows the official launch of the OSBP last December by President Uhuru Kenyatta and Ethiopian Prime Minister Abiy Ahmed.

The Moyale OSBP will be the first of its kind in Ethiopia and the fifth for Kenya. Other OSBPs in Kenya are at Busia, Malaba, Namanga and Taveta borders.

The Kenyan government is upbeat that the modern border post would spur trade between the two nations, which though moderate, retains growth potential.

The opening of the border point comes when Kenyan telecoms giant Safaricom has entered the Ethiopian market after winning a competitive tender.

Safaricom was last month awarded a licence to operate in Ethiopia — one of the last major closed telecoms markets in the world.

The move, pundits argue, signals that Addis Ababa is ready to open up more sectors of its economy to private entities.

Kenya and Ethiopia are members of several trade blocs, including the Intergovernmental Authority on Development, Common Market for Eastern and Southern Africa and African Continental Free Trade Area (AfCFTA), making the countries ideal trade partners.

East Africa as a region expects to earn $1.8 billion in welfare gains and two million jobs created from the successful implementation of AfCTA.

The opening of the OSBP is in line with the spirit of AfCTA, which allows free movement of goods and services from one country to another in the continent.

Soda ash, agrochemicals, medicaments, manufactured products, and aluminium utensils are among the leading exports by Kenya to Ethiopia, while glass bottles, processed leather products, cereals and cement are among the products Ethiopia sells to its southern neighbour.

In 2018, Kenya's exports to Ethiopia were valued at $5.8 million. The OSBP and corridor are expected to enhance this trade, according to Trade Mark East Africa.

The construction of the Moyale OSBP was part of the $329 million projects that included bitumen standard 438-kilometre road from Merille River to Moyale in Kenya and 300-kilometre roads in Ethiopia.

This initial construction phase was funded through a loan by African Development Bank and a grant from European Union with Kenya and Ethiopian governments also providing funds for the project.

The next phase entailed the implementation of Integrated Border Management Procedures and Systems on both sides of the border at $1.65 million, which was funded by the UK government through regional trade agency TradeMark East Africa.

This included the development and harmonisation of border procedures, legal instruments, capacity building for agencies operating at the border point, awareness creation targeted at women traders as well as the development and implementation of cross-border trade charter.

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