Kenyan entrepreneurs and investors stand to make a killing from the new trade route connecting Mombasa to Ethiopia via Lamu. This would present a sharp contrast for Kenya’s exports and imports that have for decades been based on the western region rout through Uganda from the port of Mombasa.
Landlocked Uganda remains Kenya’s largest trading partner and a gateway to neighbours Rwanda, Burundi, South Sudan, and DRC. But after a failed planned joint oil pipeline venture from Mombasa to Kampala, Nairobi has been anxiously exploring alternatives.
Nairobi was alarmed when Uganda and Tanzania reached a deal with a direct oil pipeline being built from Dar to Kampala and has been anxious to explore the Ethiopia-South Sudan trade corridor.
“Ethiopia is the fourth largest economy in Sub-Saharan Africa and will predictably be the third-largest by 2025, overtaking Angola. Meaning that jointly, Kenya and Ethiopia provide a market of 125 million people with a combined GDP of USD 67 billion,” reads an excerpt from the study
According to a study by the Kenya Association of Manufacturers (KAM), opportunities to rake in billions of shillings exist for Kenyans seeking to invest in Ethiopia’s food, beverages, and dairy sectors.
“Ethiopia is the fourth largest economy in Sub-Saharan Africa and will predictably be the third-largest by 2025, overtaking Angola. Meaning that jointly, Kenya and Ethiopia provide a market of 125 million people with a combined GDP of USD 67 billion,” reads an excerpt from the study.
Kenya’s exports to Ethiopia were worth Ksh. 6.83 billion during the year 2019, according to the United Nations COMTRADE database on international trade.
Several factors have now made it possible for Kenyan traders to take advantage of the new market with cargo operations on the rehabilitated 240-kilometer Nairobi-Nanyuki railway line having started on August 20th.
In December 2020, President Uhuru Kenyatta and Ethiopian Prime Minister Abiy Ahmed presided over the inauguration of the Moyale One-Stop Border Post (OBSP). The duo also inaugurated the 500km Hawasa-Hagere-Mariam-Moyale Road which is part of the Trans African Highway and a key segment of the Mombasa-Nairobi-Addis Ababa transport corridor.
Uhuru noted that the last president to travel the route by road was his father Mzee Jomo Kenyatta “We want to see Moyale becoming the Dubai of this whole region, people coming here to buy goods and taking them to other countries,” President Uhuru stated at the time, going on to urge Kenyans to take advantage of the new infrastructure to venture into landlocked Ethiopia. The border post holds great potential for products in sectors such as food, beverages, pharmaceuticals, cosmetics, and petroleum.
In 2012, Kenya and Ethiopia signed an agreement for preferential access aimed at fostering economic cooperation emphasizing trade, investment, infrastructure, food security, and sustainable livelihoods.
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