Mogadishu – A significant stride forward was taken in Mogadishu as Ethiopia and Somalia formalized their commitment to fortify bilateral trade relations through a Memorandum of Understanding (MoU). The ceremony was graced by key figures: Ethiopia’s Deputy Prime Minister and Foreign Minister, Demeke Mekonnen, and his Somali counterpart, Deputy Prime Minister Salah Ahmed Jama. This signing followed a high-level meeting of Senior Officials that spanned September 5-6, 2023.
The essence of this joint Ministerial Commission meeting was to enkindle stronger trade relations between the neighboring countries. Gebremeskel Chala, Ethiopia’s Minister of Trade and Regional Integration, when approached for insights, highlighted the manifold benefits both nations anticipate from this agreement in the trade sphere.
Gebremeskel stressed the government’s ambition to amplify production and marketing endeavors. A cornerstone of this strategy is ensuring private businesses stand at the forefront, with a clear goal to eclipse any shades of illegal trade.
Previously, informal trade overshadowed formal channels, largely due to unchecked smuggling. However, this new MoU promises a transformation, with a well-defined legal corridor to elevate trade. This would comprise an exchange of Ethiopian products like livestock and agricultural goods for Somali specialties, notably fish and fruits.
One area of particular focus, as per Gebremeskel, is the export of khat. Ethiopian authorities are mobilizing support mechanisms to help the private sector sail smoothly through administrative processes linked to khat exports. It’s worth noting that khat holds a dominant position in Ethiopian exports to Somalia, amassing over a quarter billion annually, inclusive of shipments directed to Somaliland.
In an intriguing turn, Kenyan khat merchants have managed to outpace their Ethiopian competitors, leveraging benefits such as competitive remittance costs and superior banking networks. Recognizing this disparity, the Somali government is devising countermeasures, including an extended delivery window for khat and sanctioning of bulkier shipments.
Wrapping up his commentary, Chala affirmed the harmony and cooperation between the two governments on this trade initiative. “A meticulous review by Senior Trade Officials led to a harmonious consensus on the agreement’s specifics,” he added.