Global Gateway: EU and Horn of Africa countries sign Alliance to boost economic development and combat climate change

Today in Brussels, during the 19th Horn of Africa Initiative Ministerial, co-chaired by European Commission Vice-President Margaritis Schinas and H.E. Ahmed Shide, Minister of Finance of Ethiopia, and representatives of the Horn of Africa Countries, the EU and Germany, both signed a new EU Alliance for the Horn of Africa Initiative. The initiative follows discussions at the last Ministerial in Addis Ababa in October, attended by Commissioner Urpilainen. It further rolls out the  EU positive and sustainable Global Gateway strategy and will boost trade, economic integration and resilience in the region with €83 million support from the EU budget.

European Commission Vice-President Margaritis Schinas said: “The new EU Alliance for the Horn of Africa Initiative is rooted in our shared interests. It will facilitate the rollout of the Global Gateway investments and promote stability and development. By increasing countries’ capacity to withstand climatic and other shocks and by promoting trade, it will also contribute to address the root causes of irregular migration and displacement.”

The Horn of Africa is a region rich in opportunities but is also affected by conflict, large-scale displacement, rising inflation, drought, floods and other impacts of environmental degradation and climate change.

The Alliance will support activities at country level but with a cross-border, trans-frontier and transnational approach, whenever possible working at local levels, to facilitate regional economic and social integration and political integration.

The EU’s initial financial contribution can be complemented by EU Member States in the future in order to further reach vulnerable populations in areas of the region affected by climate change and conflict.

The EU Alliance will support in particular two pillars of the Horn of Africa Initiative:

1. Trade and economic integration: EU support will boost trade, sustainable growth, and decent jobs across the region. This will be achieved through supporting trade and regional economic integration, including through and for the implementation of the African Continental Free Trade Area (AfCFTA). The EU will allocate €25 million to this pillar
2. Building Resilience: Activities will increase the capacities of populations in the region to withstand climatic and other shocks, and to cater for  reconstruction needs. Given reconstruction needs, as well as the impact of climate change mitigation and adaptation for the region, the EU will allocate  € 58 million the region’s resilience

Background

The Horn of Africa is of strategic importance to the European Union, which is reflected in its 2021 strategy on the region. It serves as a crucial trade route for Europe, but has to deal with disruptions from conflicts and attacks. The region faces challenges such as food insecurity, conflicts, counterterrorism, and climate-related disasters. Despite these challenges, the Horn also presents ample opportunities. Countries such as Djibouti, Ethiopia, and Kenya possess abundant resources like agriculture, minerals, and water. However, they require improved connectivity, integration, and governance to make sustainable growth a reality.

The Horn of Africa Initiative (HoAI) was established in 2019 by five Ministries of Finance of countries of the Horn of Africa. It includes now Djibouti, Kenya, Ethiopia, Eritrea, Somalia, South Sudan, Sudan It aims at bringing the nations together to address shared regional challenges by deepening economic and political integration. The HoAI is supported by four development partners: the World Bank, the EU, the African Development Bank, and Germany. The Initiative has demonstrated its mobilisation capacity, generating almost USD 9 billion committed in projects (EUR 1.5 billion of them from Team Europe), many of which are already yielding positive results.

The Initiative presents a new business model for regional integration, encompassing policy dialogue, investments, and political ownership. The HoAI focuses on four pillars:

1. Regional infrastructure connectivity in digital, transport and energy
2. Trade and economic integration
3. Resilience
4. Human development