What will the Ethiopia-Kenya trade agreement mean for the border community?
What will the Ethiopia-Kenya trade agreement mean for the border community?
Ethiopia and Kenya signed a trade agreement over the weekend that is expected to speed up the border trade between the two countries.
According to the agreement, a person can sell goods worth less than US$1,000 across the border, including two camels and five cows.
Minister of Trade and Regional Relations Dr Kasahun Gofee said it would benefit the communities along the border between the two countries in continuous supply of basic goods.
The agreement was signed by the Ministry of Commerce of Ethiopia and the Ministry of Trade and Industry of Kenya.
Kenya Chamber of Commerce Moyale Bureau Head Ahimad Ali told the BBC it would help Kenyan communities up to 100 km away from the border to trade with those up to 50 km away in Ethiopia.
In their opinion, the agreement will benefit the poor.
“It also allows the public to flock together and trade,” he said.
The community of the region welcomed the agreement, he added.
A camel and five cows
According to the agreement, the communities living along the Ethiopian-Kenyan border will be able to trade goods worth no more than US$1,000, he said.
The agreement allows for the cross-border sale of two camels, five cows and wolves.
They also sell edibles such as fish, fruits and vegetables.
There is a pastoral community in the border area.
Mr. Ahimad said the agreement will be useful for establishing security in the border area.
He said there had been conflict in the border area in the past and it was “very pleasing” that the governments of the neighboring countries had agreed to establish peace.
Previously, people could not legally trade with each other at the Moyale border, he said.
Moyale is said to be a gateway for smuggled goods to both countries.
“Now people can work based on the agreement signed,” he said.
The Ethiopian-Kenyan border was a security problem and armed movement was not far off.
Three months ago, 13 people were killed in clashes between the Dassanachi district in southern Ethiopia and the Turkana community in neighboring Kenya, the district governor said.
We have been reporting deaths in clashes in Moyale, a strong trade hub between the two countries.
Is it safe to buy gold when the currency falls?
Over the past few months, the global gold price has been rising sharply from what has been previously common.
This is because traders are looking for convincing alternatives in the market due to global market instability.
The precious metal is also traditionally seen as currency in times of crisis or as a reliable, tangible asset.
But is gold really as convincing as it sounds?
US President Donald Trump’s taxes on countries have caused a major change in global markets.
There is also a change in trade policy that has not been seen in years.
The price of gold, for example, reached an unprecedented high of $3,167 last week.
Gold prices have hit record highs this year, fueled by concerns about tariff and trade wars. Instability often leads to an increase in the price of gold.
When financial markets go down, people tend to accumulate gold in a hurry and “the price of gold goes up.”
Who is buying gold?
Dr Philip Fallers, a lecturer at the University of Belfast, says gold is bought by governments, owners or distributors.
“They are focusing on gold by giving up stakes or market shares. That’s why prices go up,” he said.
“That will actually cause the price of gold to rise sharply.”
Gold has traditionally attracted hard metal during times of market volatility.
In 2020, the outbreak of Covid-19 caused an economic collapse that caused the price of gold to rise sharply.
However, volatility in financial markets could also hurt gold.
In March 2020, gold prices rose as the outbreak of Covid-19 appeared, but began to fall in February of that year.
“Just because it’s a ‘safe’ investment doesn’t mean it’s risk-free,” says Dr Fliers.
But gold is still a reputable investment to turn to in times of economic instability. This is not only because of its value, but also because it is valuable in different histories and cultures and can be easily traded.
From the Gold Cover of Tutan Kahamun in ancient Egypt to the Asante Texture House in Ghana and the Golden Seat of the Padmanabhaswamy Temple in India, this precious metal has had religious and symbolic importance throughout history.
No wonder so many people are looking at gold as a reliable way to store their wealth.
Prices of gold and household jewelery items are usually unaffected by fluctuations in global financial markets.
However, any major investments can be stabilized by the actions of major financial players.
“A lot of this,” says Dr Filers, referring to the recent rise in gold prices, “I suspect is driven by government central banks buying gold.”
Usually in times of instability, they avoid capital investment and buy large amounts of gold to bolster their reserves.
That said, investing in pre-owned steel can be risky.
“Forecasting gold rises so far is a risky strategy because as soon as markets stabilize, governments come to their senses, people are going to abandon gold again,” Dr Filers said.
“I would say invest in things like gold, you do that for a long time.”
Why did Ethiopia need to restart the Stock Market after 50 years?
Ethiopia restarts the stock market for the first time in 50 years.
The stock market was officially launched on Friday, March 10, 2025, on what Prime Minister Abiy Ahmed called a ‘historic’ day.
‘Stock Market’-A market place where the public or investors can buy or sell shares in an existing asset.
The Ethiopian Securities Exchange (ESX) is expected to attract more foreign capital to the country and encourage the privatization of state-owned enterprises.
ESX CEO Dr Xilaahun Kasahun told the BBC: “The aim is to create sustainable ways and means for the government to raise debt capital from domestic sources.
Last November, Ethiopia floated its currency’s exchange rate against the dollar in a bid to raise about $10.7 billion (£8.3bn) from the International Monetary Fund (IMF) and the World Bank.
The move allowed the birr to trade freely in the foreign exchange market, which is contrary to the foreign exchange rate set by the government.
In October, Ethiopia’s cabinet approved a law allowing foreign banks to set up local subsidiaries and allowing foreigners to acquire bank shares.
The bill has already received significant interest from banks in Kenya, Morocco and the United Arab Emirates as it faces parliamentary approval.
Ethiopia is one of the largest economies in Africa.
Currently, the country relies heavily on over-the-counter trading, so the introduction of the stock market represents a significant step towards a more structured and formal trading system.
How does ESX work?
The ESX is jointly owned, with the government holding 25% of its shares. The remaining 75% will be allocated to private investors.
Ethiopian Investment Holdings (EIH), the country’s $38 billion sovereign wealth fund, represents the government’s interests on the ESX.
When ESX began raising capital in March 2023, it had hoped to raise about 631 million birr ($11.07m) from local and foreign investors to start operations.
By the time the capital raising closed in April 2024, the ESX had more than doubled its original target, reaching 1.51 billion Ethiopian birr ($26.6m).
“In a market like ours, the main motivation is greater economic potential and smaller participation from local and foreign investors,” he said. Xilaahun.
The ESX is regulated by the Ethiopian Capital Markets Authority (ECMA) and operates using a market- driven pricing system to meet global regulatory and transparency requirements.
The country’s largest telco, Ethio-Telecom, will be the first company to list on the ESX as part of the government’s plan to privatize state-owned enterprises.
“The 130-year-old Ethio-Telecom is also offering 10% of its shares to the public, laying the foundation for the Ethiopian stock market and expanding the ownership presence of one of the country’s leading state-owned companies,” Prime Minister Abiy Ahmed wrote.
Even before the listing on the ESX, the government has started offering 10% of the shares of Ethio- Telecom to the public.
“People are very happy to be able to take part in the wealth being created in Ethiopia,” Zamadinah Nigatu, global chairman of the US-based Fairfax Africa Fund, told the BBC.
“Ultimately, it is the domestic private sector that is going to advance Ethiopia’s growth,” he said.
Dr Xilaahun says there are plans to list other public companies on the ESX in the future.
“About 10 companies have been conducting preparatory assessments, including Ethio-Telecom,” he said.
How will ESX affect businesses and residents in Ethiopia?
The ESX could be a landscape changer for Ethiopian small and medium-sized enterprises that represent a significant portion of the economy.
Many of these businesses have struggled with limited access to credit and rely largely on traditional banks and private links for financing.
With the ESX, they will now have the formal assurance of selling shares to raise funds, obtain expansion capital, innovate and create jobs.
“There are a lot of family-run businesses, there are a lot of encouraging early-stage companies that can now use a lot of capital,” Mr Zamadinah said.
The ESX may also present new opportunities to encourage ordinary Ethiopians to also acquire investment assets and generate long-term wealth.
According to Mr. Zamadinah, “many educational activities are being done to educate the public about what it means to invest in stocks.
How has Ethiopia’s recent economic reform been received?
Prime Minister Abiy Ahmed’s economic reforms have received mixed reactions at home and abroad.
The move was warmly welcomed when Ethiopia awarded its first private telecommunications license, worth $850 million, in 2021 to a consortium led by Kenya’s Safaricom.
Ethio-Telecom’s long-standing monopoly in the sector, with more than 70 million subscribers, indicated that the country was ready to take on competition.
And then, Safaricom launched its mobile money service M-Pesa in August This gained more than one million users in a matter of months, providing access to digital financial services.
However, analysts say many Ethiopians are wary of the potential benefits of the reforms.
For example, the government’s proposal to allow foreign banks to set up subsidiaries has left domestic bankers concerned about increased competition.
The banking bill allows strategic foreign investors to acquire direct stakes of up to 40%, subject to such investments being made in foreign currencies only.
The Ethiopian banking sector is currently dominated by the state-owned Commercial Bank of Ethiopia, while all the other 32 banks are locally owned.
The central bank had said it would issue up to five banking licenses to foreign investors over the next five years to bring in much-needed foreign currency.
Moreover, since November 2024 when the birr fell by more than 50% against the US dollar, few Ethiopians have been afraid.
Concerned that this would exacerbate already high inflation, some have chosen to hoard dollars as the birr becomes weaker.
Then, Prime Minister Abiy announced a 300% salary increase for low-paid public servants, in an attempt to allay those fears.
What is the economy like in Ethiopia?
Ethiopia’s economic transformation depends on controlling its current struggle with inflation, debt, foreign exchange deficit and the need for stronger regulatory infrastructure.
“There may be challenges in the process, but my view is that this economic growth reform is uniquely needed to move to the next stage,” Zamadnah said.
The country has been in intense negotiations with creditors to restructure its outstanding debt after defaulting on its sovereign bonds last December.
How well Ethiopia manages its political instability will also be key to attracting investors to ameliorate the economic damage caused by the recent conflict.
A brutal two-year civil war ended in 2022 in the northern Tigray region. It has adversely affected foreign investment, with the IMF describing the ongoing violent conflict in Oromia and Amhara regions as “distressing and worrying”.
Yet, with the right balance of regulation and support, Ethiopia’s economic reforms can help the country spur inclusive growth and development in the coming years.
“Over the next five to 10 years, if we do the right thing I really envisage attracting about several billion dollars of foreign investment,” he said. Xilaahun.
