Abiy and Ruto boost trade and diplomatic ties but challenges remain

When Ethiopia Prime Minister Abiy Ahmed landed at Jomo Kenyatta International Airport in Kenya’s capital Nairobi on February 28, his host President William Ruto almost sprinted to shake his hand.

The friendly embrace was telling – it marked what could be the beginning of a positive phase in relations between East Africa’s largest economic and diplomatic powers.

In recent years, relations between the neighbours have been tested by Ethiopia’s civil conflict in Tigray, a series of historic border and water disputes, and most recently, Ethiopia’s controversial decision to pursue a port development in Somaliland, which prompted fury in Somalia and disquiet in Nairobi.  

“Kenya and Ethiopia have had a relationship that is largely defined by rivalry on who calls the shots within the region. Ruto and Abiy are too big to fit in the same region. The two are similar – young and ambitious. This seems to be a struggle for leadership and control of the region’s geopolitics and economics,” said Murithi Mutiga program director for Africa at the International Crisis Group (ICG), a think tank.

But at the end of the three-day state visit, the first by Abiy to Kenya since 2020, several agreements were signed that aim to redefine relations and deepen economic ties. A bilateral framework between Ethiopia and Kenya known as the Joint Ministerial Commission Meeting which had been inactive for seven years has again been resumed.

The leaders also pledged to work together on agriculture, transport, and ICT. They inked seven agreements aimed at enhancing cooperation in cultural development, tourism, wildlife and the blue economy, and they reaffirmed that Ethiopian visitors were not required to pay fees under Kenya’s electronic travel authorisation system.

The partners hope that the deal will build on steadily growing trade between the countries. In 2023, the total trade volume reached $501m, with Kenya exporting goods worth $276m to Ethiopia and importing goods worth $225m.

The growing economic ties have been strengthened by the gradual opening of the Ethiopian economy under Abiy, which has led to the establishment of major Kenyan companies in Ethiopia, including telecoms giant Safaricom and its mobile money subsidiary M-Pesa, both of which entered in 2022.

Kenya’s ‘peacemaker’ role

However, despite steady economic progress, a series of security and diplomatic crises in the region mean that relations are not always plain sailing.

Under former President Uhuru Kenyatta, Kenya played a central role in facilitating peace talks between the Ethiopian government and the Tigray People’s Liberation Front (TPLF), culminating in a historic agreement in November 2022 that marked a significant turning point in the civil war.

The talks, convened under the African Union, saw Kenya emerge as a key mediator, leveraging its diplomatic clout and regional influence to bring the warring parties to the table. Kenya’s role in mediating in Ethiopia amid the latter’s slide into civil conflict means Nairobi has largely displaced Ethiopia as the diplomatic power in the region. While successful, that has also stoked some resentments in the region, argues ICG’s Mutiga.

“Kenya’s approach with neighbours has historically been largely anchored on economic diplomacy. Conflict and peace-building were accidental. Previously, Ethiopia was the stabiliser but has since fallen into internal conflict, forcing Kenya to check in. Nairobi is being turned to for everything and every conflict and as a result making mistakes and leaving enemies in the wake and therefore compromising economic interests,” he argues.  

Still, after his visit to Nairobi, PM Abiy was quick to hail Ruto as a positive force in the region.  

“President Ruto is playing a great role in sustaining and realising peace and security in our region. Half of our discussion was focused on how we can sustain peace and security in our region, which is the most important element for our economic endeavours,” said Abiy.

That rapport is likely to be tested further in the wake of Ethiopia’s controversial decision to enter a deal with Somalia’s breakaway region of Somaliland over access to the Red Sea, a decision which has enraged Somalia and prompted concern in Kenya.  

“Under Abiy, Ethiopia has become less predictable in both domestic and foreign affairs. Acquiring a port [in Somililand]  by all means is his contribution to Ethiopia’s greatness. The new push for the port might be a gambit to shore up political support at home,” said Peter Kagwanja, chief executive of the Africa Policy Institute.

Ruto told Bloomberg in an interview in January that his administration was trying to “persuade Ethiopia” to consider other unspecified options beyond its demand for a port in Somaliland. More recently, a March 3 report in The East African claimed that Ruto has been using back-channels to ease the tensions between Mogadishu and Addis Ababa and prevent the dispute spilling out into the open. In the same week that Ruto greeted Abiy, he also met Somalia President Hassan Sheikh Mohamoud during the latter’s visit to the UN Environment Assembly in Nairobi.  

In a joint communique signed by Kenyan cabinet secretary Musalia Mudavadi and Ethiopian counterpart Taye Selasie on February 29, the partners emphasised their commitment to the territorial integrity of African states, in a message likely to be welcomed by Somalia.  

“They [Ruto and PM Abiy] affirmed their commitment to recognize, respect, and uphold the sovereignty and territorial integrity of states and to reject unconstitutional changes of government as well as interference in domestic political processes of African Countries by external interests,” the communique stated.

Ruto’s role as regional peacemaker is also boosting Kenya’s relations beyond the continent. While Kenya’s peacemaking efforts in Tigray have endeared Kenya to the West, Ethiopia’s slide to civil war led to US sanctions and alienation from Washington – relations which have been improved by the peace deal but have yet to fully recover.

“President Ruto is deliberately positioning himself as the go-to-person on regional matters and close to the West. It’s a pragmatic economic calculation that has seen him reach out to the West and at the same time maintain traditional relations with the East such as China. Previously, it was much to Ethiopia that most of the international community turned to. But this is changing in favour of Kenya,” says Mutiga. 

More challenges on horizon

Still, despite their diverging fortunes on the global stage, the partners will hope to bring the recently-displayed spirit of cooperation to a raft of other issues which have historically divided the countries.

The border dispute between Kenya and Ethiopia in the region of Moyale has long been awaiting resolution.

There have also been debates over water management and shared use of resources, with the allegedly reduced flow of Ethiopia’s Omo River into Kenya’s Lake Turkana a major bone of contention after Ethiopia opened a dam in 2016.  

As well as progress on those disputes, there is also room to resume projects of mutual interest.

Landlocked Ethiopia is keen to boost its access to the sea, and a trading system linking the country to the Kenyan port of Lamu, first started in 2012 but later abandoned, could help it achieve its goal.

The potential for cooperation is great, but it remains to be seen whether Ruto and Abiy’s friendly embrace is more than a mere diplomatic gesture.