FINANCE ministers from six Horn of Africa countries convened for the 17th Ministerial Roundtable of the Horn of Africa Initiative during the African Development Bank’s 2023 Annual Meetings. The ministers expressed a unanimous agreement on the necessity of increased private investment and closer trade integration to enhance resilience in the region.
Ethiopia’s Finance Minister Ahmed Shide, who chaired the meeting, emphasised the importance of private sector involvement in trade integration and regional infrastructure financing while maintaining debt sustainability. ‘Regionally, we will need to focus on how the private sector can contribute to trade integration and the financing and resource gaps to support regional infrastructure without compromising debt sustainability,’ Shide said.
The Horn of Africa Initiative serves as a platform for member countries and development partners to collaborate in addressing shared regional challenges. During the meeting, Germany was welcomed as the fourth development partner, joining the African Development Bank, the European Commission, and the World Bank.
In a significant first, the African Development Bank hosted the meeting, with Marie Laure Akin-Olugbade, Vice President for Regional Development, Integration, and Business Delivery, serving as co-chair. Akin-Olugbade commended the initiative’s progress amidst various challenges, including political instability, locust swarms, drought, high debt levels, and food and fuel price fluctuations.
Akin-Olugbade expressed hope that the discussions would explore necessary steps to mobilise private investment for priority projects. She stated, ‘We hope that the discussion will allow us to explore some of the necessary steps required to mobilise private investment for priority projects.’
South Sudan, which joined the Horn of Africa Initiative in June 2022, presented its $2bn worth of priority projects during the meeting, seeking inclusion in the initiative’s investment package. Member countries prepare projects aligned with the initiative’s strategic goals for investment and financing by development partners. To date, the three existing development partners have committed more than $4.8bn in financing for 54 projects across member countries, with an additional $3.4bn of projects in the pipeline for 2023.
The roundtable witnessed the signing of a $72 million financing agreement for the Djibouti-Somalia Corridor project, which received support from the African Development Bank. The Ministers of Economy and Finance for Djibouti, Ilyas Moussa Dawaleh, and Somalia’s Minister of Finance Elmi M. Nur, signed the agreement. African Development Bank Director General for East Africa Nnenna Nwabufo signed on behalf of the institution.
Ethiopia’s Finance Minister Shide highlighted the significance of the project, connecting Djibouti, Somalia, and Ethiopia, and advancing regional integration in the Horn of Africa.
During the meeting, participants engaged in discussions on attracting private investment, with each minister sharing their thoughts on the matter. Djibouti’s Dawaleh called for an inclusive regional forum for businesses of all sizes and sectors, emphasizing the potential of cross-border special economic zones to facilitate trade based on comparative advantages. Eritrea’s Finance Minister Samson Berhane identified infrastructure constraints as a key hurdle for the private sector in his country, while Somalia’s Minister of Finance Nur highlighted the growth of the private sector in telecommunications and its potential for a cashless society.
Annette Weber, European Union Special Representative for the Horn of Africa, commended the focus on the private sector during the meeting and stressed the importance of private actors’ involvement in achieving progress on climate and human development. Representatives from the Saudi Fund for Development, the Islamic Development Bank, and Afreximbank participated in the session as observers, indicating their strong interest in becoming initiative partners.
The African Development Bank’s annual meetings took place in Sharm El Sheikh, Egypt from May 22-26.
