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Research Article |

Informal Cross-Border Trade Future Outlooks in Ethiopia: The Case of Live Animal Export

Cross-border trade (CBT) has existed for centuries and plays an important economic, political, and social role for pastoralists, and it serves as a source of employment for most population in most African countries. The CBT has strong historical ties between Ethiopia and its neighboring countries that offer significant opportunities for economic development. The CBT contains formal CBT and informal cross-border trade (ICBT). The ICBT's contribution is estimated at 43% of the official GDP, over half of the population employment, and providing income to 43% of Africans in border areas. The formal livestock and its product export accounted for few percent of the total export compared with other agricultural output: coffee, Chat, oil crops, and pules in 2021/22, however ICBT for livestock takes place that not included in the national account, and different studies have been done on livestock ICBT so far, but most of them are not comprehensive, concentrate on specific border regions, and have limited outlook research. The purpose of the study was to examine the state and prospects of Ethiopia's livestock ICBT. The study made a literature review, used data from National Bank of Ethiopia, Ethiopian Custom Commission, and Eastern African Quarterly Bulletin, and made FGDs, KIIs. The Naive, Linear Trend, and Simple Moving Average methods are used for quantitative analysis. The best model selected using MAD, MSE, and MAPE smallest error values. The study found formal live animal export showed a decreasing trend, while ICBT took place in border areas. The ECC seized 28,410 livestock and 455 donkeys attempted to smuggle to neighboring countries; Somalia was the highest expected livestock destination. The seized livestock decreased due to traders’ different strategies led to cross more animals. Ethiopia’s informal livestock exports accounted for 86% of the East African regions to Middle Eastern countries through Somalia; therefore, the ICBT is heavily concentrated during the annual Ramadan and Hajj seasons; therefore, ICBT integrated with Somalia ICBT and formal Saudi Arabia markets. If the Government does not take any action, the formal live animal export will never increase until 2026/27, and held livestock will reduce in ICBT for the coming five years. The ICBT for livestock to Somalia will continue and follow seasonal variations for Ramadan and Haj festivities. Therefore, policymakers should formalize ICBT by easing the formal marketing system, establishing alternative markets and facilities, revising policies, automating border trade systems, community sensitization campaigns, etc. may be the solution.

Ethiopia, ICBT, Livestock, Jigjiga, Future Outlooks

APA Style

Hassen, R. M. (2024). Informal Cross-Border Trade Future Outlooks in Ethiopia: The Case of Live Animal Export. International Journal of Business and Economics Research, 13(1), 1-12. https://doi.org/10.11648/ijber.20241301.11

ACS Style

Hassen, R. M. Informal Cross-Border Trade Future Outlooks in Ethiopia: The Case of Live Animal Export. Int. J. Bus. Econ. Res. 2024, 13(1), 1-12. doi: 10.11648/ijber.20241301.11

AMA Style

Hassen RM. Informal Cross-Border Trade Future Outlooks in Ethiopia: The Case of Live Animal Export. Int J Bus Econ Res. 2024;13(1):1-12. doi: 10.11648/ijber.20241301.11

Copyright © 2024 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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