Deal with Ethiopia expected to ease trade

President Uhuru Kenyatta and Ethiopia’s Prime Minister Hailemariam Desalegn at a press conference at State House in Nairobi on June 23, 2016. PHOTO | PSCU

What you need to know:

  • In a renewed bid to open up their borders and facilitate investment and trade, President Uhuru Kenyatta and Ethiopia’s Prime Minister Hailemariam Desalegn agreed to remove hurdles that have traditionally limited business.
  • This means nationals of both countries will enjoy relaxed rules on residence for investors and entrepreneurs, easier application procedures for Kenyan companies seeking to invest in Ethiopia, as well as relaxed work permits for expatriates from both sides.

Kenyan investors and expatriates venturing into Ethiopia should expect less restrictions to their business once an agreement signed by the two countries is implemented.

In a renewed bid to open up their borders and facilitate investment and trade, President Uhuru Kenyatta and Ethiopia’s Prime Minister Hailemariam Desalegn agreed to remove hurdles that have traditionally limited business.

This means nationals of both countries will enjoy relaxed rules on residence for investors and entrepreneurs, easier application procedures for Kenyan companies seeking to invest in Ethiopia, as well as relaxed work permits for expatriates from both sides.

A statement released on Thursday after the two leaders met at State House in Nairobi says they are willing to “elevate the economic relations between the two nations through signing the historic Special Status Agreement”.

The deal, signed in November 2012, was meant to offer a framework for engagement from both sides to enhance economic and commercial relations.

At the time, focus was on developing textiles, agriculture and raw materials.

On Thursday, a statement read by Foreign Affairs Cabinet Secretary Amina Mohamed said the Joint Ministerial Cooperation Commission of the two countries had agreed to take on board the private sector, which has the largest pool of money to invest.

“The session recognised the role of the private sector in enhancing trade and investment between the two countries,” she said at State House.

The Kenya National Chamber of Commerce and Industry and the Ethiopian Chamber of Commerce and Sectoral Association yesterday signed an agreement to provide guidelines through which firms in Kenya and Ethiopia can engage.

And the leaders announced they had agreed on the construction of key oil pipelines.

One line will link Nakuru-Isiolo-Moyale-Hawassa-Addis, and another Lamu-Isiolo-Moyale-Hawassa.

The date when the project will start will be announced at the end of the year.

This means the Lamu Port- South Sudan-Ethiopia Transport (Lapsset) corridor project, launched in 2012, is still on, at least because two of the founders Ethiopia and Kenya continue to say so.

Yesterday, President Kenyatta told reporters that the construction of Lapsset-related facilities will be fast-tracked.

The facilities include roads linking the two countries, an international airport in Isiolo and a port in Lamu.

Kenya had been left out in the cold after two partners Uganda and Rwanda announced a change of heart on transport projects.

Uganda chose to use Tanzania for its pipeline route while Rwanda announced it would opt for Tanzania, too, for its standard gauge railway.

Both countries had argued it would be expensive to make their facilities pass through Kenya, which also could not guarantee security for them.