The Horn of Africa may have to turn to trade as a solution to persistent conflict and political instability.

A new report by the United Nations Development Programme (UNDP) suggests that the lack of intra-regional trade between countries in the Horn of Africa, as well as poor infrastructure, has fuelled violence and conflict by perpetuating poverty and a sense of marginalisation.

The findings are contained in a report, Enhancing Prospects for Human Development through Regional Integration, a first-ever region-specific human development report for the Horn of Africa by the UNDP.

It puts the price of peace in the Horn at around $163 billion in economic losses from 2022. In fact, this may be a conservative estimate, as a new war broke out in Sudan in April 2023, which is likely to increase the cost of the absence of peace.

Sudan in particular has been a costly affair, with at least 20,000 deaths from war-related injuries or lack of aid, more than 11 million people displaced, including 2.5 million to neighbouring countries, and, according to various estimates, at least $3 billion in economic damage to the country.

A conflict of interestsAccording to the Internal Displacement Centre (IDC), this is the largest proportion of the 29 million people in the Horn of Africa who have been displaced by violence or climate-related disasters. This population currently requires about $8 billion in assistance, according to Office for the Coordination of Humanitarian Affairs (OCHA) budget estimates. In 2024, almost a quarter of the humanitarian budget went to the Horn.“These economic consequences undermine productivity, investment, and public revenues, displacing millions and eroding trust,” the UNDP report says.

This has left the region vulnerable to the multifaceted problems and new dynamics brought about by climate change, which could also mean more competition for natural resources such as water, increasing fragility.

But experts say the tide can be turned by focusing on more trade between countries and adopting policies that encourage resource sharing rather than competition. They say this could promote human development, a phenomenon defined as the ability of people to live long, healthy and productive lives, where people are seen as both the means and the end of development. It is about the importance of people's capabilities, choices, agency and freedoms, going beyond the usual abstract narratives about per capita income to include access to quality health care and education.

Development could come naturally, with peace and trade, says Workneh Gebeyehu, executive secretary of the regional bloc, the Intergovernmental Authority on Development (Igad).“If the goods are not crossing the boundaries, the boots are going to cross,” Dr Workneh told The EastAfrican this week, commenting on the report. “That means, if we don’t bring the region for economic integration, we could have conflicts easily because soldiers can cross the borders instead of investments and trade.

Trade can bring us together and inspire us to combat crime.”Indeed, intra-regional trade in the Horn of Africa remains low, with only 12 percent of exports and six percent of imports taking place between these countries in 2022. The countries are Kenya, Uganda, Somalia, South Sudan, Sudan, Ethiopia and Eritrea. These countries are also part of Igad, a regional bloc originally formed to combat drought, but which has evolved into a peace-building organisation. Now it is turning to development.

But it has come at a time when trade in the Horn has generally declined. In 15 years, it has fallen from 16 percent to 12 percent. The UNDP says this is due to complex regulations, inadequate infrastructure, informality, political instability and conflict.

Using a computed general equilibrium (CGE) model, UNDP experts predict that removing tariffs and non-tariff measures could boost regional GDP by 3.9 percent over the next 10 years, create millions of jobs and reduce the likelihood that young people will join violent extremist groups or be used for political destabilisation. It will take cooperation.“Partnerships are essential. Investing in youth is part of the solution to make the future of the region,” said Ahunna Eziakonwa, UNDP Africa director, at the launch of the report.

She outlined the priorities for governments in the Horn of Africa to escape the curse of poverty and instability as: defining regional integration for shared growth; addressing marginalisation, especially in border areas; empowering youth; investing in women as change-makers; and harnessing technology.

There is a reason why the Horn should focus on technology and its youth. According to the report, 70 percent of the population here is under the age of 30. It can be frustrating to live in a region that faces climate disasters and has fewer opportunities to escape poverty. But if managed properly, this group could be full of new ideas and innovation. That means countries need to provide quality education and a job market.

This has been lacking in the Horn, where political instability has often dragged down the region's human development indices. Only Kenya and Uganda are in the middle range of human development. The rest form a quarter of the world's countries grouped at the bottom of the list.

Life expectancy in the Horn averages 63.8 years, slightly higher than sub-Saharan Africa's 60.6, but people here die on average nearly 10 years earlier than in other parts of the world because of low formal employment opportunities, poor sources of clean drinking water, inadequate food, poor quality education, insecurity due to political instability and low economic diversification, the report says.

All the Horn countries spend less than 10 percent of their GDP on health and education. Add to that the low level of trade between them and you have a set of countries that are generally locking themselves into poverty.

But there are ways to change this. In Kenya, for example, improving education, health and trade policies could add 8.9 years to human development by 2030. Experts advise the countries of the Horn to join the African Continental Free Trade Area (AfCFTA) and start eliminating tariffs. But it shouldn't be a one-size-fits-all approach: Countries need to emphasise value addition and ensure that the goods produced are not similar.

Improved trade will generally require better infrastructure, which in turn will create more jobs, the report says: "Significant investment is needed in transport and logistics to facilitate trade."Igad says it has started to do some of this, aiming to improve border crossings between member states, and has promoted cross-border electricity transmission to address shortages in countries with fewer renewable options. As of 2023, there were 71 projects worth $76 billion in the region to improve connectivity, including road construction and transport corridors.

Some have been delayed by the outbreak of violence and conflict in member states over the past five years. This is in addition to the disruptions caused by Covid-19.

However, there is hope: despite the crises, the Horn of Africa relies on renewable energy sources for most of its electricity production -- now 85 percent -- which, once harnessed, could help boost its economy. As each of these countries lacks adequate access to electricity, this could be a key point of cooperation to end tensions.

The UNDP proposal:Effective governance and peace are essential to human development. Shared norms and accountability mechanisms can reduce the risk of conflict while promoting democratic governance and economic interdependence.

Local governance initiatives, such as devolution and decentralisation, empower citizens and enhance accountability, while transparent and inclusive electoral processes are essential for building trust in governance.

Border governance is crucial to prevent militarisation and conflict, with initiatives such as the AU Border Governance Strategy supporting dispute resolution and cross-border cooperation.

Improving intra-regional trade; enhancing sustainability and resilience in the water-energy-food nexus; and promoting effective governance and peaceTrade liberalisation and tariff elimination could boost development, increase GDP by 3.9 percent and create one million jobs in the Horn of Africa, providing strong evidence of how regional integration – economic, governance and water, energy and food – can boost human development and meet the aspirations of the large youth population.

Enabling regional cooperative management of power transmission and generation, allowing surplus countries to export electricity while meeting national energy needs in deficit countries.

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