Jan 20, 2022

Mawazo Writing Africa

Writing about the main

Why Kenyan traders are fleeing to Ethiopia

Ethiopia’s efforts to realign its economy to attract more investors are said to have prompted several investors with bases in Kenya to relocate to Ethiopia.

The official of the Kenyan National Chamber of Commerce and Industry Moyale, Ahmed Ali, told Nation.Africa that Ethiopia’s efforts to create a conducive investment environment are a magnet for investors.

“It is so unfortunate that Ethiopia, which previously depended heavily on Kenya for several products , has now become an exporter of the same products to Kenya, “said Mr. Ali.

He attributed the shift to the traders’ preference for cost-efficient markets without bureaucracy, high taxes and corruption.

< He said there was growth concern among the local business community about increasing investment and business paralysis along the border between Moyale and Ethiopia.

Kenya has consistently failed to maintain its economy ft, as there are unfavorable trade conditions due to uneven business and investment growth at the border.

For example, Ethiopia has relied heavily on Kenya in recent years for glass and plastic bottles for its beer and mineral water, it must but no longer import them.

They also relied on Kenya for cement, aluminum products, soap, lubricants, waxes, candles, modeling pastes, inorganic chemicals and precious metal compounds and others.

But Ethiopia did Investors from China and Europe wooed to set up factories to manufacture such products in the country.

Mr. Ali and other local businessmen warned that Kenya would be the loser if Kenya did not create a better trading environment between it and Ethiopia .

They appealed to the Kenyan authorities to review the status of bilateral trade between Ethiopia and Kenya in order to prevent investors from fleeing investors.

Moyale managing director Mohammed Isack, for his part, observed that the economic slowdown along the border between Kenya and Ethiopia could intensify the already existing economic headwinds for the two trading partners.

Providing a favorable trading environment by lowering taxes and Tariffs, he suggested, will increase the demand for goods again.

“Ethiopia beats Kenya in its game because it has recognized that investors can only get cheap. Trading environments can be attracted with less corruption and red tape, “said Mr. Isack.

Investors, he said, are looking for higher returns, cost-effective asset markets and a bureaucracy-free environment.

The Ethiopian asset market has also attracted investors because of the incentives the federal government gives its citizens and others to encourage more investment.

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