• New framework targets small traders along the shared border

• Deal aims to formalize local trade and cut non-tariff barriers

• Bilateral goods trade reached $166.6 million in 2024

Kenya and Ethiopia have formalized the launch of a simplified cross-border trade regime aimed at boosting economic exchanges along their shared border. The agreement, signed in Addis Ababa, marks a new step in bilateral trade cooperation and seeks to align regional integration goals with local economic realities.

Kenyan authorities described the initiative as a major step that will strengthen trade between the two countries while ensuring that border communities benefit from opportunities created by the African Continental Free Trade Area (AfCFTA).

The agreement was signed by Ethiopia’s Minister of Trade and Regional Integration, Kassahun Gofe, and Kenya’s Cabinet Secretary for Investments, Trade, and Industry, Lee Kinyanjui. It builds on discussions held in Mombasa in April 2025, where both sides agreed on the need to remove constraints affecting cross-border trade.

The simplified trade regime focuses on the formalization and security of small-scale cross-border exchanges, particularly those carried out daily by small traders. By clarifying rules, easing procedures, and establishing a common framework, the two governments aim to reduce the high level of informality that still characterizes much of the region’s cross-border trade.

Beyond trade facilitation, the agreement carries a strong social and economic dimension. According to Kenya’s Ministry of Foreign Affairs, the framework targets livelihoods by raising incomes, improving access to essential goods, reducing illicit trade, and strengthening peace and cooperation along the common border. Cross-border trade is presented as a driver of local development and a factor of stability in an area where economic and security issues remain closely linked.

The initiative aligns with the broader objectives of the AfCFTA, which seeks to create a single African market by easing the movement of goods and services, boosting intra-African trade, and supporting economic upgrading across the continent. By addressing non-tariff barriers and progressively integrating informal trade, the AfCFTA aims to make economic integration a tool for structural transformation that benefits large firms, SMEs, and small traders alike.

According to the World Trade Organization, merchandise trade between Kenya and Ethiopia, the two largest economies in East Africa, totaled $166.6 million in 2024.

Moutiou Adjibi Nourou