Kenyan investors urge Ethiopia to ease trade conditions

By Chrispinus Omar NAIROBI (Xinhua) -- Kenyan traders have called on the Ethiopian government to remove bottlenecks which have impeded growth in bilateral trade between the two countries.

Kenya Association of Manufactures (KAM) CEO Betty Main, who was on a three-day visit to Addis Ababa to explore investment opportunities, urged the Ethiopian government to fast track investment opportunities in the country.

“The transit pact will be able to allow the movement of transit cargo and goods across the border at Moyale,” Maina said in a statement issued in Nairobi after returning from the visit.

She added that members of the delegation requested Prime Minister Hailemariam Desalegn to fast track investments by allowing Kenyan banks and retailers to operate in the country, improving capacity building and signing the COMESA Free Trade Area (FTA) protocol to which the country is not yet a signatory.

They also requested the country to tackle the problem of foreign currency shortage which is affecting the growth of the manufacturing sector.

Kenya remains one of Ethiopia’s largest trading partners in Africa and government statistics indicate that in 2010 Kenya’s exports reached 43 million U.S. dollars against imports of 2.4 million dollars.

During the meeting, the Ethiopian prime minister said the country was studying COMESA protocol but cited misgivings about the application of the rules of origin of the goods traded as one of the reasons it had not yet signed the pact.

He said that the country had to protect its fledgling domestic industries from an influx of cheap imports. He called for investments in agriculture in Ethiopia.

“This country has huge potential in agriculture; we have around 400,000 hectares of sugar production in this country. Anyone who wants to engage in sugar and palm oil production is welcome to come and invest,” Desalegn added.

Ethiopia is currently seeking WTO accession but has to allow foreign ownership of banks which it currently does not do.

Desalegn said the country was willing to look into the question of allowing Kenyan owned banks to operate in the country.

The trade mission concluded on Wednesday with a visit to the Ethiopian Commodities Exchange (ECX). The prime minister called for a quick ratification and development of the protocols for the implementation of the Special Status Agreement (SSA).

“I still feel that the devil is in the details and there is need to work on the specific details with our private sector and our respective governments,” Desalegn said.

A unique bilateral trade and investment partnership was forged in November last year after former President Mwai Kibaki and Desalegn signed the Special Status Agreement (SSA), but it is yet to be ratified by the Kenyan and Ethiopian parliaments.

The Kenyan constitution requires that all trade agreements be approved by Parliament. It will be ratified by the Ethiopian parliament in September.

Both countries hope to stimulate economic development through trade facilitation if it is ratified and implemented.

Desalegn emphasized the importance not only of foreign direct investment in the country but also growing the domestic sector, saying his country was working on infrastructure projects so as to aid the growth of the private sector in the country which he said was only 20 years old.

The Kenyan delegation arrived in Addis Ababa, the country’s capital, on Monday to explore possibilities trade and investment in the country.

During the three-day mission, the group held discussions with government leaders as well as industry, partners from the Addis Chamber of Commerce and Sectoral Associations as well business to business meetings with potential Ethiopian partners.

Kenya’s Cabinet Secretary for EAC, Tourism and Commerce, Phyllis Kandie thanked Desalegn for his country’s commitment towards strengthening the partnership.

“We appreciate to have this level of commitment during our visit. There is so much we can learn from each other,” Kandie said.

“We understand each other and that very strong bond and friendship will be able to help our two countries do business together. All this has been provided for in the SSA and we intend to take it from there.”

Ethiopia is East Africa’s most populous nation at 90 million and is a strategic trade partner to Kenya, the region’s largest economy.

In the last few years, both countries have signed 19 bilateral agreements, the SSA being the last to be signed. New areas of business partnerships exist through reciprocity.

Both countries are also involved in flagship projects such as LAPSSET, the completion of the Moyale road and the building of a railway line which will open up a new shipping route for the landlocked country.

There is also an agreement to construct a power transmission line that will provide 400 MW to the Kenya and later on 2000 MW. 
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