HoAI Countries Commit to Redoubling Efforts on Regional Integration to Support Recovery from the Pandemic and Economic Crisis

HoAI Meeting

We, the Finance Ministers of Djibouti, Ethiopia, Kenya, and Somalia, met virtually on October 28th, 2020, during the World Bank Group/IMF Annual Meetings to take forward our efforts to foster regional integration under the Horn of Africa Initiative. We would like to acknowledge the support and commitment of our development partners — the African Development Bank, European Union, and the World Bank Group — in advancing the Horn of Africa Initiative. At today’s Roundtable, we welcomed the participation of Sudan as an observer and the continued participation of IGAD and look forward to their continued engagement.

The Horn is confronting a triple crisis: the continuing risks of the Covid19 pandemic and ensuing economic and social impacts; the Desert Locust invasion and risk of recurrence; and climate and related shocks. While measures put in place by our countries have so far succeeded in keeping Covid19 infection rates relatively low in the Horn, the pandemic is far from over and we will remain resolute in controlling its spread and ensuring we are well prepared for rolling out effective vaccines when they become available. The pandemic-driven economic, fiscal, and social crisis has been significant for our sub-region with an unprecedented hit on economic growth in 2020 and the risk of millions of people falling into extreme poverty. The human face of the crisis cannot be forgotten given the large-scale presence of informal workers who rely on day-to-day economic activities to sustain their families. The sub-region has also suffered from a series of disasters –Locust infestation and climate change-induced shock notably floods and drought. All our countries remain resolute in taking strong and effective measures to tackle these challenges and deploy domestic and concessional resources to mitigate the negative impact of the ‘triple’ crises and increase resilience while at the same time taking concerted policy actions to support effective implementation of the HoA Initiative

These crises are a reminder that our countries are intertwined in our social, cultural, economic, and institutional ties and that regional integration is critical both as a prevention measure for future crises, but must also as an opportunity to build back better in response to crises. Thus, the Horn of Africa Initiative remains central to our vision of building a ‘prosperous, integrated, and peaceful Horn’. Our countries and leaders continue to focus on building strong regional cooperation through political, diplomatic, and economic measures, working closely with IGAD and other partners. This
lays the basis for deepening economic integration.

Today, we commit ourselves to continue taking forward investments and policy actions across all four pillars of the HoA Initiative – regional infrastructure connectivity, trade & economic integration, building resilience, and strengthening human capital. We discussed the recommendations of recent technical workshops and have asked that the final Project Profiles under the four pillars, which were reviewed to take into consideration the relevant interventions considering the COVID-19 crisis and Locust infestation experienced in the Horn, be placed on the new HoA Initiative website [https://www.hoainitiative.org] by end-November to inform the public and wider group of stakeholders. With this, we signal that the HoA Initiative is moving from a ‘planning’ phase to the ‘financing’ phase.

We appreciate the support provided by the three development partners and request them to expedite the preparation and approval of the projects they plan to support. We would like to see additional projects approved in the next calendar year. We are keen to sustain and enhance the process of national consultation and to build engagement further with a wider group of development partners and the private sector, and invite them to support the HoA Initiative. Under this Initiative, we have the unique advantage of bringing together, strong political commitment of countries, with effective implementation frameworks and financing mechanisms to help deepen regional integration at a critical period in the sub-regions history. We are pleased that Sudan has joined our discussion in the capacity of an observer given the important role of the country in the Horn. We wish Sudan well as it embarks on the process of re-engagement with the International Financial Institutions, and in the meanwhile, would encourage bilateral partners to consider supporting some priority areas for Sudan so that it could start benefiting from this regional Initiative.

We recognize that investment in infrastructure and other physical assets is a necessary requirement for deepening integration. However, it will not be sufficient. Today we discussed the need for policy actions to accompany physical investments in order to expand regional markets and provide benefits at scale. We have asked our teams to further consult and present to us by end-November a set of initial policy actions in the following areas: (i) trade facilitation and addressing Non-Tariff Barriers during the recovery period to ensure higher productivity and value addition than in the pre- Covid19 context; (ii) policy / regulatory measures that support regional markets in the energy and digital sectors; and (iii) regional logistics/planning issues in support of rapid immunization with the Covid19 vaccine to complement national efforts. These actions should be discussed at the technical level before being presented at our next Ministerial meeting.

We thank Minister Ilyas Dawaleh for effectively leading the HoA Initiative over the past year and have agreed that Djibouti will continue to chair the Initiative for the next six months. This would
allow continuity of leadership during a period of economic uncertainty for the sub-region. The Chair will continue to be supported by a small Secretariat.

We see the HoAI as an integral part of the recovery from the current circumstances and, as Finance Ministers overseeing the HoA Initiative, we will continue to have quarterly meetings and thank all
stakeholders and partners for their continued support.

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