Horn of Africa Countries Launch Regional Initiative, $15bn Investment on the Cards

Ethiopia, Djibouti, Kenya, Eritrea, and Somalia – have launched an initiative to forge closer economic ties, building on the improving political climate in the sub-region.

The proposals require financing of around $15 billion.

The initiative was formalised on October 18 on the sidelines of the World Bank Group/International Monetary Fund (IMF) Annual Meetings in Washington DC.

The countries agreed on priority projects and programmes that would constitute the initiative, which was being developed by the countries with support from the African Development Bank, the European Union and the World Bank.

The effort would culminate in a financing forum next year to seek investors to realise a package of priorities identified by the quintet, which has over the past decade registered some of the highest growth rates in Africa.

African Development Bank’s Vice President for Regional Development, Integration and Business Delivery, Khaled Sherif, who attended the roundtable in Washington said:

“The Horn of Africa’s geo-strategic position with regard to the Red Sea, the Arabian Sea, the Indian Ocean and the Gulf of Aden, has important regional and international significance.

“These can be harnessed to spur integration, resilience and usher in a new era of prosperity, enabling the countries to reap significant dividends from the current peace initiatives.”

The Horn of Africa nations identified four priority areas of focus: improving regional infrastructure connectivity; promoting trade and economic integration; building resilience; and strengthening human capital development.

“Most of the Horn of Africa countries easily outpaced the continent’s average growth rate in 2018. Africa’s gross domestic product expanded by an estimated 3.5 per cent last year, while Ethiopia reached 7.7 per cent, Djibouti 5.6 per cent, Kenya 5.9 per cent and Eritrea 4.2 per cent.

“Somalia was the exception at 2.9 per cent.

“The region is expected to receive a further lift from the 2018 peace accord between Eritrea and Ethiopia, which has already increased cross-border trade and could advance economic integration.

“The initiative was formalised on October 18, on the sidelines of the World Bank Group/IMF Annual Meetings in Washington DC,” said the communique.