ADDIS ABABA — In a move reflecting escalating tensions, Ethiopia has lodged a formal protest with the Somali Government, expressing deep concerns about what it perceives as Kenya’s monopolistic access and control over Somalia’s lucrative Khat market, officials said on Sunday.
Ethiopian government believes that the current market set-up has provided Kenya with an unfair advantage, effectively squeezing Ethiopia’s Khat trade out of the Somalia market.
The year-long dispute centers around the lucrative trade of the stimulant plant, which has significant economic implications for both nations involved. With both Ethiopia and Kenya being major exporters of khat to Somalis, their competition over market access and pricing has become a significant point of contention between them.
This situation has sparked mounting discontent and frustration in Ethiopia, prompting it to take the matter up through official channels.
In response to the threat, delivered through diplomatic channels, the Somali President Hassan Sheikh Mohamud has taken proactive measures by dispatching trusted representatives to Addis Ababa for urgent negotiations, three senior Somali officials told the Horn Examiner. The officials spoke on condition of anonymity due to the sensitivity of the matter.
A senior Minister and close ally of the President and one of Mr. Mohamud’s Khat revenue agents have since traveled to Addis Ababa for talks, the officials said.
During the negotiations, the Somali representatives have sought to convince the Ethiopian officials to agree to a 10-day starting market monopoly, with the ultimate goal of a 15-day competitive scenario, similar to Kenya’s existing market setup, a proposal that Ethiopian officials have yet to agree with.
Since Mohamud was elected and took office as the Somali President, Kenya had enjoyed a monopoly on the Somali Khat market after Mr. Mohamud’s administration who lifted a ban on its exports by his predecessors administration has in turn downgraded the Ethiopian Khat imports.
Tensions between Mogadishu and Addis Ababa have since continued to escalate to a boiling point. But, the issue holds significant implications for both neighbours, with Somalia facing particular challenges given Ethiopia’s influence over the country’s security and political matters, a major problem which has likely prompted the Somali government to seriously contemplate reaching a settlement.
However, experts have raised concerns about the potential impact on Kenya’s Khat market share in Somalia if a settlement is reached between Somalia and Ethiopia.
Any reduction in Kenya’s Khat market flow to Somalia could lead to further tensions with Nairobi, they said.
With over five million dollars in monthly revenue, the Khat imports has come under scrutiny since Mr. Mohamud returned to power amid growing concerns about the unaccounted tax revenue from its imports.
According to officials, a cartel associated with President Mohamud stands to benefit from its levy, with a substantial portion of the funds being directly channeled into the president’s office in cash.
The issue at hand revolves around the importation of Khat to Somalia, where dealers are charged a substantial fee of $4.5 per kilo at the Mogadishu Airport Custom. However, these dealers have recently voiced their grievances, claiming that the levy is impeding their trade, demanding the abolition of what they deem as “illegal” fees.
Although the government continues to push back calls for explanation of the illegal levy phenomenon, yet it further fueled suspicions of corruption.
The allegations are particularly troubling as the charge was introduced following the lifting of the Khat ban soon after the current President’s election, raising questions about possible connections between the two events.
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