(Above) Shipping containers are unloaded in the port of Mombasa, Kenya. As one of the primary seaports in the Horn of Africa region, the port could be a key to deepening economic integration in the sub-region (AP Photo/Sayyid Azim).
Aklilu Shiketa
In the Horn of Africa, it is often presumed that the Intergovernmental Authority on Development (IGAD) provides an institutional framework for economic integration.
The African Union, for instance, recognizes IGAD as one of the continent’s premiere regional economic associations, alongside others such as the Southern African Development Community (SADC), the Economic Community of West African States (ECOWAS) and the East African Community (EAC).
While these groupings have pursued customs unions, free trade and even common currencies among their members, however, IGAD has yet to accomplish even the most basic steps toward regional economic integration. Its plan to create a free trade area by 2012 failed with little notice from the African and international communities.
Meanwhile, the Horn continues to suffer. Lack of security, piracy, state-sponsored insurgencies and a high cost of doing business highlight the need for robust economic initiatives that can lead to interdependence, integration and, perhaps, stability.
To date, economic integration has been a sorely neglected foreign policy instrument among IGAD countries (Djibouti, Ethiopia, Eritrea, Kenya, Somalia, South Sudan, Sudan and Uganda). Given their vast differences in history, governance and national development strategy, policy harmonization and formulation of a common vision is a formidable challenge.
Parallel membership in other integration schemes, however, has also had a particularly negative impact on the effectiveness of IGAD: Kenya and Uganda are more deeply committed to the EAC, for example, while Sudan has one leg in Africa and another in the Middle East. Elsewhere around the Horn, Eritrea continues to use force to settle policy differences with its neighbours, Ethiopia remains oblivious to regional markets and Somalia has little control over its own trade, diplomacy and macroeconomic policy.
In light of the current inability to create trade-related integration, the case for building sub-regional economic interdependence around ports, waters and oilfields is worth considering.
In addition to these realities, structural issues also discourage trade-led integration in the sub-region. Even compared to other developing economies, the manufacturing sector in the Horn is undersized (and almost non-existent in Somalia, Djibouti and South Sudan). The overwhelming majority of imports, therefore, come from outside the sub-region. Meanwhile, IGAD states only export a limited number of primary commodities such as coffee, livestock and oil seeds, and many do so in competition with one another for international markets.
Despite these poor fundamentals, however, IGAD has made some diplomatic (if not economic) gains in the sub-region. The group’s efforts have helped broker peace and security initiatives in South Sudan and Somalia, for example, though these deals would be much stronger and more sustainable if complemented by increased sub-regional trade relations and cross-border investment.
These provisions are obviously easier to discuss than to implement, though. One of the fundamental issues in establishing a regional integration scheme is the motive behind its establishment. There is a perception that the European Union (EU), for example, was established to prevent another large-scale war from happening. In Africa there is a tendency seek inspiration from the EU by looking at what it represents today.
Instead, it would be advisable to replicate how the EU evolved as an economic partnership. The roots of the Union were planted with the 1951 European Coal and Steel Association (ECSA) which brought France, Germany and four other countries together to organize the free movement of coal and steel. This choice was not only economic but also political, as these two materials were the basis of industry and power at the time.
Similar approaches can be pursued in identifying resources within the Horn of Africa that could be used for mutual integration purposes. In light of the current inability to create trade-related integration, the case for building sub-regional economic interdependence around ports, waters and oilfields is worth considering.
The uneven distribution of the resources across the region makes cooperation viable and even desirable. Sally Healy, a leading scholar on Horn of Africa issues agrees that “there is a recognized potential for enhancing regional economic interdependence through the development of transport corridors to sea ports, the management of shared water resources and improved energy security.” (Download full Chatham House report here)
While Ethiopia, South Sudan and Uganda are landlocked, for example, sea ports exist in Sudan, Eritrea, Djibouti, Somalia and Kenya. Similarly, the 45,000 megawatts of hydroelectricity that Ethiopia has the potential to generate could be distributed across the Horn. If Eritrea, Djibouti, and Somalia trade port access for oil with South Sudan and Uganda, Ethiopia could provide transport corridors radiating from the ports of the Red Sea and Indian Ocean towards landlocked areas and beyond. With robust institutional mechanisms in place, cooperation on ports, oil and water could be mutually incentivized.
Though isolated initiatives — such as Kenya’s LAPSSET project and Ethiopia’s hydropower export plans — are meant to enhance cooperation, they have not been brought under an IGAD institutional framework. They are, at best, fragmented interventions where short-term commercial outcomes have been the prime consideration, without a view to enhancing longer-term political cooperation, conflict prevention and regional stability.
With the establishment of institutional cooperation surrounding the issues of ports, waters and oil, however, IGAD could take a step toward becoming a comprehensive sub-regional organization in the Horn of Africa. In addition to enhancing political stability and mitigating conflict, it is plausible that IGAD could one day allow member nations to join other regional economic communities around the continent, and contribute to the eventual establishment of an African Common Market.
Aklilu Shiketa is a consultant based in Atlanta, USA. Previously, he was Director for US Affairs at the Foreign Ministry of Ethiopia.
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