Horn of Africa nations’ new regional initiative gets proposal of $15bn financing

An initiative has been launched by five Horn of Africa countries in order to forge closer economic ties, building on the improving political climate in the sub-region.

The initiative was formalized on October 18, on the sidelines of the World Bank Group/IMF Annual Meetings in Washington DC. The countries agreed on priority projects and programs that will constitute the initiative, which is being developed by the countries with support from the African Development Bank, the European Union and the World Bank.

The effort will culminate in a financing forum in 2020 to seek investors to realize a package of priorities identified by the quintet, which has over the past decade registered some of the highest growth rates in Africa.

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

The proposals need financing of about USD 15 billion. The Horn of Africa countries identified four priority areas of focus, which are 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 percent in 2018, while Ethiopia reached 7.7 percent, Kenya 5.9 pecent, Djibouti 5.6 percent and Eritrea 4.2 percent. Somalia was the exception at 2.9 percent.