Cross-border trade in the Horn of Africa has always assumed considerable importance in the economies and societies of the region, even when governments have attempted to discourage it. Incentives for cross-border trade result from geographic, cultural, ethnic homogeneity as well as production and consumption characteristics that favour certain countries for particular key commodities. In the case of southern and southeastern Ethiopia, it is the production and marketing of livestock, particularly of cattle, that assumes the most significance.
Throughout the region, social relations based on clan/ethnic affiliation, kinship, and friendship shape the existence of cross-border trade in the Horn of Africa. Relationships maintained for long periods of time along the international boundaries facilitate trading relations and, in some cases, these can be linked to clan/ethnic or other social structures (Ahrens, 1998:1). These trade patterns are reinforced by unattractive, highly regulated domestic prices that are by large lower than parallel market prices (for example, prices in the neighbouring countries' markets). Therefore, despite vigilant controls by the governments in the Horn of Africa region, to redirect commerce in the borderlands to the official channel, substantial exchange of goods takes place in the border areas in all types of commodities (Little, 1996 and1997; Little et al, 1998).
International boundaries throughout the Horn of Africa have important economic and ecological characteristics that generally distinguish the region from other parts of Africa. For example, most of the borders are characterised by arid and semi-arid environments, inhabited by pastoralists and agro-pastoralists and livestock-based economies. The southern and southeastern Ethiopia borderlands are not unusual in this respect and livestock dominate local patterns of trade and production. The southern and southeastern Ethiopian rangelands is an important market shed for unofficial livestock trade from Ethiopia to Kenya and, secondarily, to Somalia. According to the trader interviews we conducted during November and December 1998 and January 1999, the animals traded in these unofficial channels are destined to consumer markets in Kenya and Somalia as well as re-export to the Middle East, primarily Saudi Arabia and Yemen.
Processed and unprocessed foodstuffs and other manufactured items that are predominantly consumer goods flow in the reverse channel; that is, from Kenya to Ethiopia and Somalia to Ethiopia. Without a central government since 1991, Somalia has emerged as a large `duty free' entry point for numerous manufactured items, electronic consumer goods, and processed food items in the region. These items find their way into border markets in neighbouring countries and reach the shops and streets of major cities.
In this study livestock refers to cattle, sheep, goats and camels. In Ethiopia livestock production plays an important role in the national economy. Half of the country's output derives from the agriculture sector that is directly and indirectly supported by livestock production in the mid-1990s. About 15 percent of the Gross Domestic Production (GDP), which is 30 percent of the Agricultural GDP, was from livestock production. In 1997/98 GDP at constant factor cost from agriculture and allied activities (crop, livestock, forestry and fishing) was 46.4 percent of total GDP (MEDaC, 1999:462). Animal and animal products are also the second major export items of the country. The country's livestock population is the largest in Africa. In 1993/94 there were 31.5 million heads of cattle, 19.8 million heads of goats 27.5 million heads of sheep and 1.2 million heads of camel (MEDaC, 1999:157-62). 20% of cattle, 25% of sheep, 73% of goats and 20% of equine and 100% of camels are found in the lowland rangelands (Mengistu, 1994). According to the 1998 record of the Borana Zone Department of Agriculture, the Zone had a total of 1,856,067 cattle; 372,534 sheep; 792,849 goats; and 302,586 camels. The data excludes the Borana Weredas of Bore, Odo Shakiso and Uraga. Data was not available for Liben and Afder Zones of the Somali Region.
Livestock is more important in the rangelands of the country both in distribution and as a source of living. The sector is a primary activity in the area (50-60 percent of the total area of the country) and about 12 percent of the country's population from 29 Cushitic and Nilotic ethnic groups make their living from this sector. Production is primarily for subsistence taking several forms of pastoralism and agro-pastoralism1.
Rangeland livestock production is also linked to the highland areas mainly with Gujji and Arsi, by providing draft animals for agriculture and animal products for consumer markets. The rangeland also provides heifers and small ruminants to the Omotic population for breeding and heifers and she camels to pastoralists in northern Kenya and to Somalia in the east. The highland crop producing population meat demand is substantially met by the rangelands. The most important item in the return flow to the lowlands from the high lands is food grain. Livestock in the lowlands also provides subsistence employment and investment opportunities for around 5 million people for residents of some two dozen major towns and cities within and adjacent to the lowland areas (Coppock, 1994:19).
The lowlands, arid and semi-arid lands of Ethiopia, where much of the livestock production comes from are located in the peripheries bordering five countries of the Horn of Africa, namely Djibouti, Eritrea, Kenya, Somalia and Sudan. Unofficial cross-border trade in livestock among these countries is important. For instance, in the mid- 1980s unofficial annual livestock trade to Djibouti, Kenya and Somalia was estimated by the Ethiopian Ministry of Agriculture (1985) at 55,000 cattle and 330,000 sheep and goats. More recent estimates by Gebreselassie et al (1998) put the number of unofficial cross-border exports at approximately 260,000 cattle and 1, 200,000 sheep. The bulk of the sheep is exported from the Ethiopian Somali Region to Somaliland and eventually to the Middle East. It was estimated by Gebremariam (1976) that the flow of cattle from Ethiopia to Kenya was 50,000- 80,000 per year.
The objective of this study is to characterise and analyse the process of cross-border livestock trade between Ethiopia and Kenya and the southeastern part of the Ethiopia Somalia borderlands. The study looks at the relationship between cross-border livestock trade and food security in the area and examines the impact of domestic markets on cross-border trade. The study is also meant to complement an on-going cross-border research in Kenya (the Kenya/Somalia borderlands) and a research to be carried out in the year 2000 along the Ethiopia/Djibouti borders. This comparative research program, a joint collaborative effort between OSSREA and the BASIS-CRSP, is the first of its kind to document the extent and nature of cross-border trade in the Horn of Africa. The following questions motivate this particular study as well as the larger research program (see Little 1998; and Little, Teka, and Azeze 1998).
1. What is the current structure and volume of cross-border trade in the Ethiopia-Kenya border?
2. How do different actors in the marketing chain manage risks associated with imperfect information, missing capital markets, unstable market and political conditions, and high and volatile transport costs?
3. In what ways do social/non-economic variables (informal social networks, ethnicity and other variables) help actors cope with uncertainty and risk?
4. What is the current performance of cross-border livestock trade?
5. What are the major policy and other constraints inhibiting cross-border trade and food security in the region?
The Research Area covers most parts of southern and southeastern rangelands of Ethiopia which extends from Omo (west) to Wabi Shebelle (east) rivers covering Borana Zone (Oromiya region), Liban Zone and Afder (Ethiopia Somali region), Konso Wereda and lower Omo in the Southern Nations, Nationalities and Peoples Regional State (See Map 1).
Data has also been collected from secondary sources. The secondary sources for this study are the Department of Agriculture at Zonal and Wereda levels and non-governmental organisations operating in the area. Time series data has been obtained from these sources on quantity and price of live animals, grain, and other food staff by markets in the border area.
Most of the information used in this study is primary. Trader interviews were conducted by the OSSREA research team during December 1998 and January 1999 using a questionnaire. The survey instrument was field tested in November 1998. To assist with the research, enumerators were recruited from the local area and were trained using the questionnaire and, thus, were able to conduct interviews in some cases. Reconnaissance was conducted in both border catchment markets found in southern and southeastern rangelands consisting of Borana, Liban and Afder Zones. Field surveys were carried out in Borana, Arsi and East Shewa Zones of Oromiya region, Liban Zone of Ethiopia-Somali region, Gedeo Zone of Southern Nations, Nationalities and Peoples region and the Addis Ababa Regional administration. The questionnaire included questions that intended to capture traders profile, volume and price of different livestock traded in 1998, marketing inputs such as transport and cost, feed and water cost, veterinary drugs and services cost, the role of brokers and market information, diversification by traders and constraints in the cross-border trade. In addition, discussion has been made with livestock officers in the border regions of Kenya (Mandera and Moyale) and other people in Ethiopia (Borana Zone of Oromiya Region) and NGOs (GTZ/BLPDP, Save the Children Federation/USA and CARE-Ethiopia).
In the 13 Ethiopian livestock markets visited for this research, it was estimated that there were 650 livestock traders, both registered with the government and the unregistered. Out of these markets, 9 were in the cross-border trade catchment including Mandera and Moyale in Kenya. The rest were visited to see the impact of domestic market. Among the livestock markets that were surveyed were Mega, Dubluk, Teltelle, Finchawa, Arero, Wadera, Yabello, Negelle and Dollo-Ado. These markets were found in the cross-border livestock trade catchment from the Ethiopian side. Kebre Mengist, Hagere-mariam; Wonago/Dilla, Yirgacheffe, Nazareth, Dixis, Dhera and Addis Ababa were domestic markets for livestock from the southern and southeastern rangelands excluding camels. From the Kenyan side, the Ethiopian research team surveyed Mandera and Moyale, while Nairobi and Isiolo are covered in the Kenyan-based study. However, some data on the latter two Kenyan markets were obtained from interviews with Ethiopian traders and Kenyan border livestock officers.
The estimate on the traders' population in southern and southeastern Ethiopia was derived from the Department of Agriculture, the local Inland Revenue Department and traders in the local markets. It covers both domestic traders and those engaged in cross-border commerce. It was envisaged to sample 14 traders per market and a total of 182 traders that make up 28 percent of the traders population. However, during the survey we were able to survey about 171 traders or 26 percent of the traders population. 100 traders were in the border catchment covering Negelle, Dollo-Ado, Mandera, Arero, Dubluk, Mega, Yabello, Teltelle and Moyale markets. Trader involvement in cross-border trade generally increases as one approaches the border. The rest of the traders were involved in domestic livestock markets. A list of traders by name, big and small for each market centre was prepared. The survey covered all categories of traders willing to be interviewed and those available in the area. More than 10 % of the traders' population were away for livestock trade business in other markets. Interviews took place at traders' houses, market places, tea houses and bars. Table 1 summarises markets and number of interviews undertaken in those places where border traders were found.
Table 1. Number of Trader Interviews by Market Area
Border Market Area |
Location |
No. of Interviews |
Arero Area (Mata Gefersa, Obulo and Web markets) |
Ethiopia (Central Borana) |
12 |
Dollo-Ado-(Dollo-Ado, Chiratte, Bare, Elkare) |
Ethiopia (Ethio-Somali and Kenya-Somali Border) |
12 |
Mandera, (Ramu, Banissa, Thakaba) |
Northern Kenya |
16 |
Dirre Area (Mega, Dubluk and Hidilola) |
Ethiopia (Central Borana) |
12 |
Moyale Area |
Kenya |
20 |
Negelle Borana Area (Genale, Jidola, Harkallo, Wadera and Negelle) |
Ethiopia (North east Borana Zone) |
14 |
Teltelle area (Milami, and Omotic people) |
Ethiopia (Western Borana) |
12 |
Yabello Area (Yabello, Suruppa Harobake, Elwaya and Didhara) |
Ethiopia (north west) |
2 |
Total number of interviews in the border area |
|
100 |
Total number of interviews in domestic markets* |
|
71 |
SOURCE: Survey Data, 1999
* where livestock from southern and southeastern rangelands are traded with Addis Ababa, Nazareth, Dhera, Kibre Mengist, Dilla/Wonago, Yirgacheffe and Hageremariam.
Secondary data were collected from the Zonal and Wereda agricultural departments and NGOs operating in the regions, such as GTZ- Borana Lowland Pastoral Development Program (BLPDP) and CARE-Ethiopia. Data obtained from GTZ-BLPDP comprise four livestock markets that are important to the Ethiopia-Kenya cross-border trade. Out of these, three are found in Southern rangelands of Ethiopia (Borana Area). These are Negelle from the northeast part of the border catchment and, Arero and Dubluk in the central area. The fourth market is Moyale (in Kenya). The GTZ-BLPDP unpublished data in these markets compiled monthly data for livestock (dry cow, milking cow, calves, heifer, bullock, steer, ox, male and female goats, male and female sheep, camel and donkey), various types of grain and other food staffs such as flour, edible oil and milk. CARE-Ethiopia also complied a monthly price data for livestock and grain in some markets in Borana. However, due to large missing values we were not able to use the information.
Limitations of market data, both in spatial and temporal coverage, forced us to use various techniques and look for the convergence of the results obtained using these different methods. In this study, simple statistical summarising techniques such as averages, coefficient of variation and correlation are used to explain some relationships.
The research report is organised as follows. Section 2 presents the social and ecological characteristics of cross-border trade, while Section 3 treats the structure of the cross-border trade. The structure is explained in terms of the goods traded, trader's socio-economic profile, livestock markets, marketing channel and market sheds and the types of currencies used by the traders. Section 4 summarised transaction costs including market information, transport and other related costs. Section 5 is devoted to the role of finance and credit arrangements. Market integration analysis is dealt with in section 6. The report is concluded with a summary of research findings, in Section 7. Finally, in Section 8, the study presents some policy implications for the cross-border trade in the southern and southeastern Ethiopian borderlands.
