The Ethiopian Ministry of Trade and Regional Integration has officially issued Directive No. 1144/2018, which operationalizes the comprehensive cross-border trade framework recently signed between Ethiopia and Kenya.
This landmark initiative was reportedly designed to facilitate the exchange of essential consumer goods for communities residing along the shared border, and to address the challenges previously faced in accessing basic necessities from the central parts of their respective countries.
Issued under the authority of the Trade Registration and Licensing Proclamation No. 980/2008, the directive aims to bring the decades-long, informal and often problematic border trade into a formal and structured system.
By formalizing this activity, the Ethiopian government seeks to curb smuggling and illegal trade practices that have historically hindered regional economic growth and created security vulnerabilities along the border.
The issuance of this directive is highly significant in light of efforts to address trade bottlenecks along the Ethiopia-Kenya corridor. In March 2026, the UN Trade and Development agency (UNCTAD), in collaboration with the AfCFTA Secretariat and the Ethiopian government, provided national capacity-building training to strengthen Ethiopia’s ability to identify, record, and resolve trade barriers along this route.
Traders operating along this corridor have long faced operational, regulatory, and logistical challenges that increase the cost and time of border trade; this new directive directly aims to mitigate these issues.
One of the main obstacles to smoothing border trade has been the regulatory discrepancy between the two countries. According to the 2016 East African Community Vehicle Load Control Act, Kenya has set the maximum permissible axle load limit on the Moyale-Nairobi corridor at 28 tons. Conversely, Ethiopian vehicles are permitted to carry loads of up to 40 tons up to the Moyale One-Stop Border Post (OSBP).
This discrepancy has forced Ethiopian trucks to offload their cargo at the border, which, coupled with a shortage of Kenyan trucks and warehouse facilities, has caused significant delays.
According to the Ministry, this new directive establishes clear rules and limits for small-scale border traders, creating a supplementary legal framework that addresses some of these major logistical bottlenecks until broader infrastructure solutions are developed.
The directive explains that to be recognized as a “border trader,” individuals must meet specific criteria designed for the benefit of local communities. Applicants must be Ethiopian citizens residing permanently in the border area, should not be engaged in regular commercial business, and must be selected by local community and administrative bodies. Priority is given, in particular, to women and vulnerable groups.
The “border area” is defined as a zone covering 50 kilometers from the Ethiopian side and 100 kilometers from the Kenyan side. This 100-kilometer width on the Kenyan side takes into account the population distribution of northern Kenya.
To prevent the system from being used as a loophole for large-scale commercial operations, the directive imposes limits on trade volume and frequency. The total value of goods imported or exported by a single trader must not exceed the equivalent of $1,000 USD per month; traders are permitted to make up to four trips per month within the established value cap.
Traders must declare their goods to the Ethiopian Customs Commission at authorized border crossing points and pay the appropriate fees.
The directive includes a list of 50 categories of goods, ranging from livestock and agricultural produce to textiles, household items, and hygiene products. Livestock exports are limited to a maximum of two camels or cattle, and five sheep or goats per trip.
This formalization of border trade comes alongside major infrastructure investments intended to support cross-border commerce. The Moyale Dry Port, currently being built by the Kenya Ports Authority, is expected to strengthen border trade by serving as a hub for cargo consolidation, customs clearance, and freight handling.
Furthermore, the expansion of the Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET) includes plans for ferry services on Lake Turkana.
Additionally, it is understood that the directive is aligned with the “Horn of Africa Gateway Development Project” (HoAGDP), which is supported by $750 million from the World Bank and is scheduled to be completed by June 2028. This includes the construction of bridges at Suftu and Rhamu, as well as the establishment of a One-Stop Border Post at Rhamu. The Rhamu One-Stop Border Post is expected to reduce cargo clearance times from 6.5 hours to 45 minutes and decrease transport costs by 32 percent.
