Trade can be a perilous enterprise in the Horn of Africa, even in areas that aren’t torn by conflict. Most goods are moved by truck, and drivers must navigate congested, unsafe, and poorly maintained roads, where accidents and breakdowns are frequent. Some routes outside major cities have few fueling stations and poor road-side infrastructure, making road transportation hazardous and driving costs up and profits down.
Those obstacles help explain why the volume of trade among the seven countries in the region is the lowest in Africa, amounting to just 6 percent of GDP, compared with 13 percent for the continent. Some of the Horn’s countries are among Africa’s poorest.
The problems are daunting, but the region’s governments are taking bold steps to tackle them. They have launched the Horn of Africa Initiative (HoAI), with financial and technical support from the African Development Bank, the European Union, and the World Bank. The initiative has four pillars: improving infrastructure such as transport, energy, and digital networks; promoting trade and economic integration; building resilience to shocks such as pandemics and disasters; and strengthening human capital.
The development partners have committed to a $15.89 billion priority package that aims to boost regional trade and economic integration, and by doing so, improve living standards and create more and better jobs for the region’s more than 200 million people. The hope, too, is that stronger commercial ties in the Horn will incentivize peacebuilding and raise the economic cost of disruptions to trade.
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