Birr and Nakfa are swapped at parity in the border towns
Following the normalisation of Ethio-Eritrean relations and reopening of the border, business activities at the boundary towns are flourishing after two decades of standoff.
Major trading activities have been taking place in Zalambessa, Adigrat and Meqelle, Trade activities have been taking place since last Wednesday, September 12, 2018, a day after Prime Minister Abiy Ahmed (PhD) and President Issaias Afeworqi reopened the crossings along their shared border.
Eritreans have been marching to these towns to buy cement, bricks, macaroni, spaghetti, hardwood, teff, pepper powder and other commodities and merchandise. Ethiopians are also buying products such as televisions, mobile phone devices and livestock by travelling as far as the capital Asmara.
"We started seeing many vehicles with Eritrean plates moving around in Adigrat on Wednesday," said Muluberhan G. Wahid, a resident is Adigrat. "Most of them were loaded with commodities and merchandise bought from the local market."
The journey for the rapprochement between the two countries began when Abiy, during his inaugural address to parliament, expressed his intention to extend a truce to Eritrea. In April of this year, an Executive Committee meeting of the ruling party, the EPRDF, announced that it accepted the decision of the United Nations commission on the disputed border between the two countries.
Abiy's visit to Asmara followed the announcement, then Ethiopian and Eritrean airlines resumed commercial flights between Asmara and addis abeba elecom lines between the two countries were re-established, the two embassies were reopened and maintenance of connection roads commenced.
The unfortunate war between Ethiopia and Eritrea left bitter memories, the loss of thousands of lives, displacement of a large number of people and a devastating impact on their respective economies.
"Cement is the major commodity the Eritreans are buying," said Angesom Berhane, owner of a cement retail outlet in Adigrat, some 900Km north of Addis Abeba.
Beginning last Wednesday, 4,000ql to 5,000ql of cement a day have been transported from Adigrat to three border towns in Eritrea, Senafe, Adi Keyih and Dekemhare, according to business owners in Adigrat.
"Business activities in these areas has revived," Angesom told Fortune. "A minimum of 20 trucks carrying cement is leaving from Adigrat to Eritrea daily."
A quintal of cement, 100kg, manufactured by Messebo Cement Factory, is sold for 200 Br. The Eritreans are buying the commodities in Birr exchanged from Eritrean Nakfa and dollars.
"Almost all of the cement is being dispatched to warehouses in Eritrea," Angesom said.
Not only the Eritreans are crossing the board to enter Ethiopia, but Ethiopians from Meqelle and Adigrat are travelling to Asmara to buy electronics and clothing.
Muluberhan is one of them. Last Thursday he was in Asmara buying a television and clothing after driving for three hours.
"At the border, I swapped 100 Br for 100 Nakfa," he said.
The price of typical electronic products is 4,000 Br to 5,000 Br cheaper than in Ethiopia.
"Birr and Nakfa exchanged on parity on the ground," tweeted Kjetil Tronvoll, a Norwegian professor who closely follows the Horn of Africa region, "very positive development - but need institutionalisation!"
Medhane Tadesse (Prof.), an academician specialising in conflicts within the Horn of Africa, agrees.
The former dispute among the two nations surfaced not only because of the famous border dispute but rather due to political and economic disagreement and tensions, according to Medhane.
"Before these economic interactions are scaled up to the larger scales, the economic partnerships between the two have to be well-examined," he said, "committees at the states level should be formed to conduct detailed assessments."
The current activities and measures by the two sides are taken in a rush, targeting the lifting of sanctions on Eritrea, according to Medhane.
Thus, to sustain normalisation, the security and economic issues between the two countries have to be formalised, he also recommended.
"A well-defined road map on details of the normalisation has to be drafted," Medhane said.