Eritrea and Ethiopia trading in local currencies is now complete

Ethiopia, Eritrea could trade in local currencies

For well over a year following normalization of relations, Ethiopia and Eritrea have been working on documents for a range of agreements.

Trade relations between the two countries were among the significant issues that relevant authorities have been working on after the end of hostility as Ethiopia  nitiated rapprochement in 2018.

According to news published by the Ethiopian Press Agency (EPA), which cited the Ethiopian Ministry of Trade and Industry as a source, the work is now completed. It is pending a decision from senior authorities of both countries.

Wondimu Filate is a Communication Affairs Director in the Ministry of Trade and Industry of Ethiopia. He told the Ethiopian Herald that “the ministry has sent a complete Ethio-Eritrea border trade legal framework to the Ministry of Foreign Affairs (MoFA) in a bid to strike a trade deal soon having secured approval from both countries.”

While preparing a legal framework for the border trade between Eritrea and Ethiopia, the Ministry of Trade and Industry of Ethiopia has researched the areas of bilateral trade schemes to determine market interest and gap.

Mr. Wondimu said: “The cross border trade between Ethiopia and Eritrea will occur within a radius of 10 km from their shared borders.”

He added that the Ministry of Trade and Industry of Ethiopia has “identified preferable commodities and transaction currency of traders in the area.”

When the two nations sign the trade agreement, the currency issue could be determined.

Wondimu also said that the transaction currency could be Ethiopian Birr, Eritrean Nakfa, or US Dollar.

The report by Ethiopian Press Agency also indicated that open trades have been going on between Eritreans and Ethiopians along the border area. “…formalizing of such trade will build a booming business between the two sisterly countries,” according to Communication Affairs Director of MoTI