Streamlining Border Trade

On April 17, 2025, Kenya and Ethiopia signed a milestone Memorandum of Understanding (MoU) to facilitate cross-border trade under the African Continental Free Trade Area (AfCFTA). The AfCFTA provides a single market creation framework for Africa, signed by 54 member states and is seeking to lift at least 30 million Africans from extreme poverty by 2063 boosting trade income by 7% to $450 billion. The MoU between Kenya and Ethiopia will allow trades to transact goods worth over $1,000 at the Moyale border which is a bilateral cooperation progress and a scalable model for African nations in fast tracking the AfCFTA gains.

Although policymakers and heads of state have long extolled the virtues of intra-African trade, tangible implementation has lagged behind especially in informal trade valued at US$17.6 billion annually. Border delays, excessive bureaucracy, and inconsistent trade policies still define too many of regional interactions with informal trade raging between 30% to 70% of trade among neighboring nations across Africa. The MoU therefore steps beyond rhetoric speeches to bring AfCFTA ambitions to practical heights where traders, not technocrats, define success.

Practical and People-Centric $1,000 Border Trade Deal

In the past, Ethiopia has signified a desire to revamp informal cross-border trade along its borders with Djibouti and South Sudan to make basic consumables accessible to communities living along border areas. The deal with Kenya is another attempt at a simplified trade regime to allow traders to move goods valued up to $1,000 across the Moyale border, four times per month, without the usual red tape. The agreement designates a 50-kilometer trade zone on the Ethiopian side and 100 kilometers on the Kenyan side. This gives trades and border communities a breathing room to engage in legitimate and low-value commerce to feed communities.

Thus, this is not just good economics but good governance aligned with the AfCFTA targets to lift scores from extreme poverty through trade and enabling easy access to commodities. In regions where informal trade dominates and many traders operate at subsistence levels, formalization often feels punitive. Thus, the Kenya-Ethiopia agreement aims to flip this flawed logic by incentivizing informal traders to enter the formal economy through lowered entry barriers.

A desirable Continental Template

Attempts at formalizing cross-border trade between African nations, while often provided for by regional integration blogs such as the East African Community have always been hampered by self-preserving goals by member nations. The AfCFTA is expected to boost intra-African trade by around 40% and boost GDP by 1.2% following the creation of a single continental market, reduced tariffs, and elimination of non-tariff barriers. However, trade protocols alone cannot do the job prompting African nations to need to implement bottom-up policies that target the actual friction points faced by traders in cross-border trade. They must respond to border bottlenecks, excessive tariffs on small consignments, and overlapping regulations that have kept internal trade at just 13-15% of total trade volume compared to over 70% in Europe and 60% in Asia.

“[The MoU] provides a roadmap on what would happen when countries treat border communities as micro-economies that deserve support as opposed to national security threats.”

Therefore, the Kenya and Ethiopia brotherly agreement is a scalable and decentralized solution that can be considered for implementation across numerous problematic shared borders across Africa. As opposed to waiting for a continent-wide bureaucracy to align, countries can pursue both bilateral and sub-regional deals in alignment with the AfCFTA aspirations and principles to feed into the larger continental vision. With more nations pursuing these localized MoUs within the continental trade imperative, the AfCFTA will become an evolving reality—built brick by brick, border post by border post.

A Lesson for the EAC—and Beyond

For members of the East African Community (EAC), the Kenya-Ethiopia model also exposes a lesson. Trade within the EAC community has been increasingly impacted by disputes, especially between the founding members Kenya, Uganda, and Tanzania which are undesirable in the large scheme of poverty reduction. These squabbles persist despite a common market protocol, revealing a gap between legal commitments and political will.

Signing of the Memorandum of Understanding (MoU) in Mombasa, Kenya Thursday 17 April 2025.

Compared, the agreement between Kenya and Ethiopia, if implemented effectively, provides a roadmap on what would happen when countries treat border communities as micro-economies that deserve support as opposed to national security threats. It will therefore offer a scalable blueprint for ending the unending trade frictions with the EAC, SADC, and other African blocks that have hindered trade.

The Trust Subtext and the need for African Action

Africa has increasingly dealt with disrupted trade networks and imposed economic systems making trust a quite subtext of the AfCFTA story. Despite its ambitious dispute resolution mechanism (Annex 9), many African states still prefer the World Trade Organization’s system to resolve conflicts. This is because, while the AfCFTA court so far exists on paper, few countries have tested it, and fewer still trust it over bilateral or international options.

Thus, trust will not be built in Geneva but in trade locations across Africa Like Moyale. As more African nations sign agreements that work for trade by delivering results to small traders and producers, confidence in African-led mechanisms is bound to grow. Consequently, through such people-focused partnerships, nations are likely to start seeing the AfCFTA as a living and breathing economic community as opposed to a theoretical exercise on paper.

Beginnings Matter and This one is Promising

Of Course, the signed MoU is not a silver bullet and challenges are bound to emerge in its implementation. The technical committees working on its implementation must fast-track the instruments for a quicker actualization. Border officers will need to be trained while infrastructure, especially the Moyale One-Stop Border Post have to be fully operation and accessible. More critically, the local traders must be educated on the new rules to take full advantage of them.

Further, the terms of the MoU raise a question of trade scale under such formalized cross-border imperatives. A $1,000 threshold is an excellent start, but for the AfCFTA to truly transform Africa’s economic destiny, countries will need to harmonize a broader range of trade regulations, align customs standards, and invest in transport corridors. Still, this is a beginning that matters and is promising.

Africa therefore needs to move away from vision statements to actualize more MoUs like this with Kenya and Ethiopia providing a template in the realities of African Trade and border relations. The rest of African must now follow the lead as the AfCFTA dream will not be build by diplomats on Addis alone. It will be built by traders in Moyale, truckers in Kasumbalesa, and processors in Kazungula. If countries across Africa replicate and expand on the Kenya-Ethiopia example, then the AfCFTA won’t just be the largest free trade area in the world on paper—it will become the most empowering trade zone in history.