Kenya is wooing Ethiopia to open up its market further for Nairobi after a high-level trade and investment forum that Prime Minister Abiy Ahmed hosted in Addis Ababa last week.
It is understood that the two countries reviewed the progress of implementation of a Special Status Agreement, which the two countries signed in 2012 to enhance economic partnership.
Cabinet Secretaries Peter Munya and Monica Juma for Trade and Foreign Affairs respectively, were the key players in reviewing the agreement that will see different sector leaders commence visits to Addis Ababa to negotiate and sign deals with their counterparts.
The Special Status Agreement focuses on trade, investment, infrastructure and food security.
Kenya is wooing Ethiopia into joining the East African Community in order to extend integration to the Horn of African countries, among them Eritrea, Somalia and Djibouti.
After meeting with the Kenyan delegation, Mr Abiy held similar talks with Eritrean leader Isaias Afeworki during which the two leaders agreed to extend regional integration in order to benefit from a larger market in the region.
President Uhuru Kenyatta led senior government officials and private sector leaders to take advantage of the ongoing liberalisation of the Ethiopian economy, which could lead to penetration of the entire Horn of Africa.
Sources said Kenya is frustrated by activities of its EAC neighbours, seeking markets elsewhere, especially Tanzania, which is increasingly leaning towards Southern African Development Co-operation.
According to Kenya, there are opportunities in the Horn of Africa, which it can access through Ethiopia so that its private sector can seize a wider market. The Horn of Africa regions comprises Ethiopia, Djibouti, Eritrea and Somalia.
In the delegation was Central Bank Governor Patrick Njoroge who is said to have had talks with his Ethiopian counterpart to work on modalities of aligning the banking sector to ensure free flow of financial transactions immediately the market accepts Kenyan players.
All service sectors, among them manufacturing, media and banking, agreed to begin direct engagement, and strike deals that will ensure a seven-point agenda the two countries agreed during review of previous agreement.