Ethiopia has significantly broadened its global trade horizons by finalizing and signing 27 new bilateral trade agreements. Announced by the Ministry of Trade and Regional Integration (MoTRI), this extensive move is part of a strategic push aimed at simultaneously expanding the nation's international commerce network and addressing pressing domestic economic vulnerabilities. The agreements encompass a diverse mix of preferential arrangements and broader economic cooperation pacts with individual countries and regional blocs like COMESA and IGAD.
MoTRI Minister Kassahun Gofe (PhD) underscored the pivotal role these agreements are expected to play in fostering trade expansion and stimulating economic growth for the nation. He also highlighted Ethiopia’s proactive engagement in multilateral trade frameworks. He noted the country's ongoing preparations for the operationalization of the African Continental Free Trade Area (AfCFTA) and a determined effort to finalize its accession to the World Trade Organization (WTO) within the next 10 to 11 months.
However, alongside these broad liberalization efforts, Ethiopia has simultaneously implemented stricter controls on its border with neighboring Kenya. A new agreement between the two countries now limits cross-border traders to a maximum trade value of $1,000 USD per month, spread across no more than four consignments. Furthermore, designated trading zones have been precisely defined, limited to areas within 50 kilometers of the Ethiopian border and 100 kilometers of the Kenyan border.
Minister Kassahun clarified that this measure is specifically designed as a targeted intervention to curb illicit contraband activities and protect the national economy, emphasizing that it is not intended to impede legitimate formal export trade between the two countries. He stressed that the agreement with Kenya serves to strengthen social and diplomatic ties while simultaneously ensuring more regulated and transparent trade practices.
In a related development, the Minister also announced the discontinuation of the Franco valuta trade scheme. He cited the scheme's contribution to inflationary pressures and the absence of a proper regulatory framework for revenue generation as key reasons for its termination. The Minister linked this decision partly to the growing strength of the local manufacturing sector, particularly in its import substitution efforts, emphasizing the need to safeguard the progress made in the domestic economy.
This dual approach – actively pursuing comprehensive international trade agreements while implementing targeted regulations on specific border trade activities – signals Ethiopia's deliberate strategy to foster economic growth through global partnerships while also addressing particular challenges related to unregulated cross-border commerce and ensuring domestic economic stability, EPA learned.