Kenya, Ethiopia under pressure to break trade deadlock as businesses push back

Kenyan lawmakers are turning up the pressure on the government to accelerate talks with Ethiopia over trade barriers that businesses say have quietly throttled commerce between the two East African powerhouses for years.

The frustration is not new, but it is growing louder. Members of Parliament say mismatched product standards, cumbersome customs procedures and lingering protectionist policies are keeping exporters and investors from tapping into what should be one of the continent’s most promising markets. Despite warmer diplomatic ties and a flurry of joint infrastructure projects, traders on the ground describe a different reality-one of delays at the border, duplicated paperwork, and rules that seem to shift depending on which side of the line goods are crossing.

“The relationship on paper looks strong. The relationship in practice is still full of friction,” one lawmaker said, echoing a sentiment shared across several parliamentary committees pushing for reform.

Kenya and Ethiopia have spent the past several years deepening ties through transport corridors, energy interconnections and joint commitments under both the East African Community and the African Continental Free Trade Area. Yet officials and trade experts say those grand gestures have not translated into smoother trade on the ground. Administrative bottlenecks continue to add cost and time to moving goods, undercutting the very integration both governments have publicly championed.

Manufacturers and exporters describe a familiar pattern: shipments held up for extra inspections, certification requirements that differ from one side of the border to the other, and licensing rules that can take weeks to navigate. Industry groups in Nairobi say the cumulative effect is that Kenyan goods often arrive in Ethiopia later and costlier than they should, eroding the competitive edge Kenyan firms might otherwise have in a fast-growing market.

Lawmakers are now calling for direct, bilateral negotiations to align regulatory standards, cut back non-tariff barriers and streamline customs processes. They argue that without such cooperation, Kenyan businesses will keep losing out on opportunities in a market with enormous long-term potential — and that regional value chains, which both countries have said they want to build, will remain more aspiration than reality.

Some legislators have gone further, urging the establishment of a joint technical committee to review outstanding disputes on a rolling basis rather than leaving them to periodic high-level summits, which they say move too slowly to keep pace with business needs. They contend that a standing mechanism would allow smaller, sector-specific issues — from agricultural produce standards to vehicle import rules — to be resolved before they escalate into broader diplomatic friction.

The timing matters. Kenya has been actively trying to diversify its export base, leaning more heavily on African markets as it looks to reduce reliance on traditional overseas buyers in Europe and Asia. Regional trade has become a central plank of the government’s economic strategy, with officials repeatedly pointing to neighbouring markets as the next frontier for growth.

Ethiopia, with a population exceeding 120 million, remains a magnet for that ambition. Even as manufacturers complain about being locked out, Kenyan banks and other investors have kept a close eye on the country, betting that gradual economic liberalisation in Addis Ababa will eventually open the door wider to foreign participation. Several Kenyan financial institutions have already expanded their footprint in the region in anticipation of deeper integration, positioning themselves to serve businesses on both sides of the border once restrictions ease.

There are signs of incremental progress. The two governments have rolled out a framework meant to formalise small-scale trade along their shared border, letting communities in the area exchange approved goods under simplified rules. Backers of the scheme say it could curb smuggling and informal trade while giving small traders a legitimate, easier path to do business. Officials involved in the initiative say it could eventually serve as a model for wider trade facilitation between the two countries, though they caution it addresses only a fraction of the volume moving through formal channels.

Still, analysts caution that these localised fixes will not be enough on their own. Resolving the broader tangle of non-tariff barriers, they say, is essential if Kenya and Ethiopia hope to fully capitalise on regional integration-and on the wider promise of AfCFTA, which envisions a single, seamless market spanning the African continent. For now, lawmakers say, the burden of navigating that gap between ambition and implementation continues to fall on the businesses trying to trade across the border every day.