A Closer Look at the Horn of Africa

Abstract

For many decades prior to the 2000s, countries within the Horn of Africa region had experienced poor economic development. Numerous studies conducted uncovered some of the factors contributing to this penurious financial state and the disparity with the developing nations. However, viewpoints varied as to the reason why countries within the above area have been among the poorest globally. Diagnostic approaches in establishing the determinants for progress in this territory indicated that limited pecuniary access, both from external as well as domestic sources, weak infrastructure, low savings, and lack of adequate human capital are among the key constraints on the region’s progress. Getting rid of these barriers can ultimately lead to higher advancement, specifically working to reform the money related aspects to mobilize the necessary funds for both public and private development projects. Terrorism in the zone has also curtailed the minimal economic gains from the early 2000s, where the emergence of the extremist militia derailed growth after the formation of Al-Shabaab in 2006. Today, militia-related activities in the sector remains a major threat. Lack of large-scale infrastructure projects to drive regional integration and the development of power, transport and communication have derailed access to not only natural resources but also external finances. This peninsula is rich with natural resources which need to be tapped, and there is a huge need to promote social and political stability, as well as bringing governments together to manage and modernize projects in both a national and regional scale. This paper evaluates the economic measures and infrastructure in the Horn of Africa region and explores the challenges and opportunities as well as drawing recommendations.

Introduction and Background

The Horn of Africa is a peninsula located in Northeast Africa constituted of five countries, namely, Kenya, Ethiopia, Eritrea, Somalia, and Djibouti. The Intergovernmental Authority on Development (IAD) also includes South Sudan, Sudan, and Uganda and refers to this as the Greater Horn of Africa. With a population of over 160 million people, it is reported that 3 out of 4 people reside in rural areas (Sorenson, 2016). Studies also reveal that 70 million people, approximately 44% of the population, are exposed to food shortages. Between 1965 and 1995, the region’s development averaged 3%, with a population increase of 3% leading to the stagnation of income per capita at $220, compared to $490 in the rest of Sub-Saharan Africa (Sorenson, 2016). Most countries located here started thriving economically from the late 1990s. Only three nations, however, oversaw a 7% economic success sustained, i.e., Ethiopia, Uganda, and Sudan, since 2000, to bring down poverty and promote progress, and realize the Millennium Development Goals. Because of the renewed improvement, impoverishment in the nations situated in the above territory declined by 18-35% between 2000-2009, with the average income per capita at $340, in comparison to the whole sub-Saharan Africa region at $649. Despite the revamping. Kenya and Ethiopia are some of the countries that experienced decelerated growth while the extraction of oil in Sudan led to its excellent performance which notably surpassed the average of the sub-region (Sorenson, 2016).

The overall dismal growth in the region has resulted in inferior socio-economic indicators among the countries (Abdi, Ali & Aragie 2012). In 2010, per capita income was a meager 14% of that of East and South-East Asia, with the exclusion of China, and was about 56% of average sub-Saharan Africa (Calcagno, 2016). The massive level of inequality in sub-Saharan Africa is indicated by the better income-per-capita than in the Horn of Africa. Minimal changes in member countries where agriculture and the services sector dominated the economic activities in the region. The industry also grew its GDP contribution in most states, increasing its share by 6% although the sector still accounts for less than 19% of the region’s total GDP (Calcagno, 2016). The overall deficient growth has made the region among the least developed and political leaders, and policymakers have a pressing challenge to sustain and stimulate continuous as well as sustainable progress. Kenya has over the decades been regarded as the economic giant, having experienced political and social stability that had boosted steady improvement in its economy and infrastructure. However, recent years have seen political unrests in the country, leading to civil conflicts, particularly because of electoral conflicts (Burbidge, 2015). These have largely affected activities such as tourism, which has been a major economic driver. It is, however, now regarded among the fastest growing economies not only in Africa but the world at large. Somalia is the least developed country in this region and among the least in the world, due to decades of civil war and their maintenance of an informal economy (Gesare, et al., 2017). According to studies by the United Nations Development Program (UNDP), the country had the lowest economic measures in the world. South Sudan has the minimal existing infrastructure, with overwhelmingly little-tarmacked roads estimated to be the only 200Km. It has among the highest mortality rates as well as female illiteracy rates in the world. Its economy is among the world’s weakest and least developed. Many parts of the country lack electricity and piped water. Subsistence farming provides a source of living for the population’s vast majority. Sudan has also been marred by civil wars and social conflict and the secession of South Sudan resulted in the reduction of oil to the tune of 75% of its production. The country’s economy had until 2002 been boomed by the increase in oil production, foreign direct investment inflows and high oil prices (Verhoeven, 2017). Due to the recession, however, the country has struggled to have its economy stabilized as well as gaining ground on the loss of earnings from foreign exchange. Sudan, however, has a rather developed infrastructure that can be compared to most of the Sub-Saharan countries. As a result, the success of investment made in this nation is likely.

Food security among nations situated in this territory continues to deteriorate, especially in inaccessible areas due to poor infrastructure or conflicts, or areas which receive insufficient aid (Abdi, Ali & Aragie 2012). Droughts have also contributed to food shortages, and many children suffer from malnutrition. Outbreaks of diseases such as cholera and diarrhea have also dominated these places, and from early 2017, Ethiopia and Somalia have recorded over 38,000 and 76,000 cases respectively. Kenya has reported over 2200 cases. Challenges faced in the different localities vary with regards to context, but a common driver has been political instability, poverty as well as inability to harness abundant resources inherent in the region to fuel social as well as economic change (Henze, 2016). The United Nations, as well as the European Union, have been instrumental in trying to address some of these challenges. Peacebuilding and the promotion of economic integration are central to the efforts put in place by the above organizations (Gesare et al., 2017). Intergovernmental Authority on Development (IGAD) has been keen on pushing for economic inter-dependence and peaceful resolution.

Social Development Challenges

Despite similarities in a few of the nations, there exists great diversity where each country is unique in several aspects. Djibouti is the smallest country in the region, regarding population and territory and is unique for its socio-economic structures were being mostly urban, it basically depends on services as opposed to agriculture (Keen, 2017). It has also escaped the detrimental effects of war, a common feature among its neighbors. It has not only boasted tranquility within a tempestuous sub-region, but it has also had a minimal share of conflicts, a factor that sets it apart. It, however, shares many of the other social problems and has also been affected by its neighbor’s affairs, particularly Somalia and Ethiopia, sharing economic relations with the latter (Burbidge, 2015). Ethiopia is geographically strategic in that it shares borders with the rest of the Horn countries which makes it convenient to understand the economic developments of the region. Due to its location, it is easily accessible, an aspect that boosts its business related undertakings with the neighboring nations.

Although a majority of provinces in Ethiopia have been peaceful for a long time, it has been partly turbulent from its dynamics. Besides, due to its relationship with the neighbors, especially Somalia, it has had frequent confrontations, a development that in 1979 became full-blown war (Burbidge, 2015). The country's major challenge is the degree to which it handles numerous transitions in political and economic fields, and establish the groundwork of development.

Somalia faces the starkest challenge to development and peace in the region. It is commonly referred to as a failed state with the worst cases of social disintegration. Elections have proved to be divisive, leading to social conflicts and reported cases of war. A recent unfolding is the widespread post-election violence following the 2008 disputed presidential elections, which lasted for over three months, severely hampering the economy. Even with efforts that have been put in place by international non-governmental organizations to improve the state of the nation, several drawbacks continue to stand in the way of development. The government's inability to acquire certification for it to engage in global trade is one of them. Even worse, the country does not belong to any regional trade block, a factor that makes international trade a considerable challenge. Also, the weakening of the country's economy has also been a significant drawback to its development.

Kenya is the most developed and diversified, with a population of 44 different tribes (Solomon et al., 2017). The country has experienced gradual economic growth although there has been stagnation in recent years as a result of social conflict. It has also enjoyed infrastructural growth and is a leader in information communication and technology in Africa with the existence of major multinational corporations that have created employment and boosted the economy. Kenya has also enjoyed years of success in tourism which has remained a key economic driver.

It is, therefore, apparent that there exists great diversity between the Horn of Africa countries with respect to population, politics, resources, size, and history of each, and hence the unique challenges and characteristics (Keen, 2017). It is hence important not to over-generalize the region’s aspects. A clearer perspective can be obtained from human development reports from UNDP. For all the Horn countries, the human development index falls way below the 0.4 which is the UNDP’s cut-off point used to describe poor human conditions. The figures for the indicators are 48 and 51 for life expectancy, 43% and 53% for adult literacy, and purchasing power of $820 and $1253 for GDP per capita (Verhoeven, 2017).

Those in absolute poverty in rural settlements are about 56% of the entire population, a remarkably staggering figure indicating the magnitude of poverty in the region (Solomon et al., 2017). Only 59% of the region’s population has health services access where water and sanitation figures are even lower at 54% and 40% respectively. Calcagno (2016) notes that the region’s population only meets 76% of the required daily calories.

Looking ahead, a number of issues need to be considered if social development is to be actively addressed. Firstly, despite national efforts being decisive, there is a pressing need to address the problems from a regional perspective, as mentioned a common approach cannot be neglected for any serious developmental strategies (Verhoeven, 2017). Secondly, the World Summit’s three themes are highly correlated, implying that none can be handled effectively while isolating the other (Henze, 2016). Hence, the lack of civil peace cannot allow the poverty problems to be effectively addressed. Thirdly, social development is influenced by a political commitment to establishing mechanisms and institutions for mobilizing resources needed for progress. When the political will exists, social progress advances can be realized (Calcagno, 2016). The region’s governments, as well as international communities, also need to gear efforts in developing economies by pushing for political stability and creating forums for coordinating assistance (Burbidge, 2015).

The Refugee Crisis in the Region

Severe famine, internally displaced persons (IDPs) and an influx of refugees is highly evident in the countries situated here (Martin et al., 2018). The famine situation has received a lot of focus where overwhelming international support has been afforded. However, little effort has been made on the refugee crisis where there are approximately 1 million refugees and over 1.4 million IDPs across Ethiopia, Kenya, Djibouti, and Somali (Burbidge, 2015. The safe havens that are the camps are already overwhelmed as a result of congestion and insufficient services such as water, food, and security (Martin et al., 2018). The host countries are experiencing substantial social, economic and environmental costs due to the influx of individuals who have not been planned for. In Kenya, for example, the high number of refugees are imposing a security threat and the potential for unrest due to the scramble for the existing scarce resources. Some of these people are also considered to engage in criminal activities (Gesare et al., 2017). They also impact the cost of commodities and housing. Kenya, for example, has a place known as Eastleigh nowadays being referred to as ‘Small Mogadishu’ due to the exodus of Somalis to the area. This nation has experienced an inflation rate of 17%, Ethiopia 39%, and Djibouti 5% (Gesare et al., 2017). Imported food has been increasingly in demand.

Rapid currency depreciation, raising further the cost of basic commodities such as food is a significant problem. Due to the inability to tackle the economic situation, efforts to steady the economy have yielded more problems such as an increase in interest rates and fluctuating exchange rates (Verhoeven, 2017).

Impact of Terrorism: Al-Shabaab

Although Kenya remains one of the most stable nations among the rest in this area, a recent evolvement of terrorist action has drawn significant security concerns. Various studies have been conducted to keenly evaluate the terrorism impacts and the possible measures that can be taken to tackle the vice. A common finding has had many major negative impacts across different sectors of the economy as well as the society (Calcagno, 2016). The Muslims and Christian communities have coexisted with tension with the former being held accountable for the terrorist actions, hence the religious conflicts. The continuous threats by the group to attack designated highly populated areas have been attributed to corrupt immigration officials, weak border laws, poor planning, poor police force, general lack of preparedness and the radicalization of youths to join the militia group (Calcagno, 2016).

The present terrorists are well educated with high levels of sophistication, and by living among other ordinary citizens, it has been difficult to uncover the culprits which have been a challenge to the security forces (Keen, 2017). All this started when the Kenya Government, back in 2011, decide to send their troops to (southern) Somalia, to fight the fundamentalist Al-Shabaab group, following the kidnappings of some tourists in the coastal county of Lamu (Martin et al., 2018). However, there was no evidence of Al-Shabaab involvement in the kidnappings. The scarce resources, as well as international support afforded to the operation, have altered the scope of the conflict that is underlined by economic factors. Nonetheless, Kenya is determined to protect its increasing economic interests in southern Somalia, most notably the control of the Kismayu, where Ethiopia and South Sudan are also involved (Calcagno, 2016). The most pressing need is for Kenya to protect its tourism industry that is very lucrative and a major economic driver.

Although insecurity has been a major problem mostly in Kenya and Somalia, a few undertakings by different stakeholders can reduce the frequency of attacks. Implementing stringent immigration rules, an improved chain of command in the security forces, investment in equipment and policing, and utilizing modern technology would be good steps (Martin et al., 2018). There is a need for evaluating the relevance of hosting refugees in Kenyan camps, i.e. whether or not they are a potential source of terrorism. Measures to ensure that the refugee is well controlled in their camps should also be analyzed. The degree of youth radicalizations should also be evaluated as well as the factors that make the youth vulnerable. From these analyses, detailed insights can be drawn that would be useful in implementing corrective measures.

Governments have over the past years invested heavily not only to mitigate acts of terrorism but to device innovative reactionary tactics to terrorism (Henze, 2016). Taxpayers in the region have had to, therefore, finance the procurement of military weapons and equipment, enrolment of more military servicemen into their armies and heighten their border monitoring efforts over time. This has come at a cost to these nations as a good percentage of the countries resources is diverted from development and progression of the economies of these nations and towards counter-terrorism.

The gains made in terms of infrastructural development have also suffered from the rise in terrorism in the Horn of Africa, a case in point being Somalia. Numerous bombings have let the dilapidation of infrastructure including schools, hospitals and road networks leaving some regions the country in a deplorable state that is almost impossible to restore. Lack of limited numbers of operational schools has also lead to a significant decline in access to education as well as the quality of education provided in some of these regions. Inaccessibility to quality healthcare has also come about due to the terrorist presence in Somalia. Reports show that Somalia continued to grapple with malaria and cholera hence affecting the Somali population. The long-term effect of this is such that the labor force is strained and so is potential economic development in Somalia.

Al-Shabaab presence in Somalia and some parts of Ethiopia, has led to a protracted refugee situation in the region (Henze, 2016). As at 2016, Dadaab Refugee camp in Kenya was the biggest refugee camp in the world hosting about 275,000 refugees, the majority being Somali refugees. The camp which was established in the year 1991 first hosted Somali refugees owing civil war now hosts Somali nationals fleeing unrest from the Country due to Al-Shabaab, who have strongholds in Somalia to date. Keen (2017) notes that the refugee situation arising from terrorist creates a complex economic situation for affected nations where the Al-Shabaab conduct has held the fort, causing unrest among the neighboring countries that host fleeing persons seeking asylum (Keen, 2017).

There have been marked economic fluctuations in the region for countries that have been on the receiving end of terrorist attacks, most notably Kenya, which border Somalia to the South East (Keen, 2017). The most earth-shaking terrorist attacks that Kenya has experienced was the 1998 bomb attack on the United States Embassy in the capital, Nairobi. The attack occurred simultaneously with an attack on the United States Embassy in Tanzania (Bariagaber, 2016). Thereafter, Kenya has continued to bear the brunt of terrorism, affecting its progress. (Bariagaber, 2016).

SWOT Analysis

Countries situated in Northeast Africa's Peninsula are poverty-stricken and in dire need of development. Little is facilitated by restrictive regulations and conflicts between the member countries to allow economic development (Bariagaber, 2016). On the other hand, there are significant investment opportunities within the region that are often overlooked (Sorenson, 2016). Considering the strengths, weaknesses, opportunities, and threats, there are some key things that can be deduced. One strength that is unique to one of the territories is the manufacturing sector in Ethiopia, which is superior in textile and leather industries (Martin et al., 2018). This is so much so that H&M set up an office in the region, after Walmart and Tesco. The tax breaks and other incentives offered to foreign investors remain attractive (Burbidge, 2015). The human capital in Ethiopia is also another important resource where the youth play the role of consumers as well as the working class, hence being an important driver of economic growth (Martin et al., 2018).

The coastline cities have rare opportunities considering their geographical position (Calcagno, 2016). Djibouti city is currently responsible for handling 90% of Ethiopia’s exports and imports and plays the role of a trade hub in connecting to Europe and Asia (Sorenson, 2016). A new railway was launched from Addis Ababa to Djibouti, drastically shortening trips between the two cities. Both Djibouti and Ethiopia greatly benefit from this (Calcagno, 2016). Another strength in the region is the huge remittances received which are a critical source of external resources for development (Calcagno, 2016). Kenya has a good infrastructure for facilitating trade in the region, and as a leading technology hub, access to information and communication resources has boosted employment and improved business agility (Martin et al., 2018). Calcagno (2016) points out that the port of Mombasa is also a crucial facility which is also utilized by neighboring Uganda which is landlocked. The standard gauge railway that was recently unveiled in 2017 has also facilitated the efficient transport of people and goods between Mombasa and the capital Nairobi (Martin et al., 2018).

Some weaknesses include the lack of formalities in processes, constrained barriers for exchange and a market with problematic dynamics. The high levels of security threats also remain a major weakness. Currently, movement across the Horn of Africa is limited due to security concerns (Abdi, Ali & Aragie 2012). Henze (2016) reiterates that the poor roads and entry barriers have also had a negative effect on movement across the territories. Resultantly, trade has remained low. Africa is widely regarded as an agricultural continent and has had farming opportunities limited only to a small section of the Horn region. Arid and semi-arid land constitutes 70% of the region while 45% of the arable land remains rather unproductive (Henze, 2016). Frequent drought and erratic rains haven’t helped the agricultural sector either (Sorenson, 2016). Infrastructure also remains largely lacking, be it from a transport or a logistics perspective.

Another issue that is evident is climate change in the region. This poses a great challenge to economic growth due to the fact that it has a direct and indirect impact on food production and hence food security, energy production, wildlife management among others. The above affect trade as well, especially trade undertakings that are related to agriculture as well as livestock related commodities. As climates change consequences continue to plague many nations, more money is used in the importation of energy and other commodities whose production is affected by such situations. Such countries hence slowly continue to be having difficulties in sustaining themselves, hence related economic issues.

Trade-related challenges are also evident among this nations. Non- Tariff barriers, currency-related challenges as well as border control policies continue to affect trading activities between the nations in this territory. Regardless of the talks that were initiated to have a common currency to ease trading activities between nations such as Uganda and Kenya, such efforts have not yet borne fruits. Disparities in currency value directly or indirectly affect the will of the people to exchange their currency and hence affects their trading willingness. Other than the above, there are still border control restrictions that prevent free movement all of the above neighboring nations. Sometimes, the clearance time is long and tedious, an aspect that discourages free importation and exportation of commodities across the borders of the nations in question. Free movement of people, as well as commodities, have been greatly affected by security-related reasons. To date, Sudan remains one of the nations whose good will on this issue has developed the least. Other than little movement of goods and people in and out of the above state, skilled labor circulation has also been difficult due security issues in the area. Many Kenyans, for example, who worked in Sudan have had to be rescued in different insecure situations.

One of the most effective ways of breaking the poverty cycle is by equipping people with education. Skills possessed by such individuals is likely to steer the economy in different ways. An educated population does not only help in job opportunity creation but it also likely to drive business activities by stating innovation related startups. Education in countries such as Somalia, Sudan and Djibouti and a few segments in Kenya is still underdeveloped to a large extent. Humanitarian organizations have had to deal with aspects considered to be more urgent among disadvantaged communities in this nations. UNICEF, for example, has mainly majored in healthcare as well as nutrition-related undertakings. Education, in most circumstances, is not a priority. Even when there are efforts to ensure a majority of children can access schools in such areas, it is hard for them to get a substantial education while in empty stomachs. Also, in some provinces such as North Eastern in Kenya and many others in Somalia insecurity has caused non-residence fear. An attack on Garissa university, as well as terror-related activities propagated against several teachers who do not come from the region, has resulted in efforts geared to improve education in such sectors to bear little to no fruits. Although Uganda and Ethiopia have tried to provide equitable education to its citizens, rural areas continue to face several challenges in regards to education accessibility. Without education, development is likely to be slow.

Most stakeholders do not recognize democracy as a major influence on economic development among these countries. Democracy is famously regarded as the rule of the people by the people. This is however not the reality here. In a few countries such as Kenya, democracy is a superficial aspect that is not deep-rooted. In most of the above nation, major values embodied by democracy such as liberty and equality are not evident at all. Elections have become an avenue to grab top governmental seats other than acquiring it in a fair manner. Kenya, for example, has had major post-election violence after elections held in 2007 as voters claimed that the elections were rigged in favor of one of the presidential candidates then. Recently the Ethiopian army allegedly had a crackdown on dissidents, an undertaking that resulted in more than 8000 Ethiopians to seek refuge in Kenya. In Uganda, the current president has been accused of being a dictator who has delayed electoral justice to his presidential running mates. Even worse, it has been difficult for Somalia as a nation to hold elections let alone fair and peaceful ones. Countries such as Djibouti have not had major democratic related issues, but there are surely pertinent issues that have to be addressed by such a nation as well. With democracy being an aspect that has been difficult to be fully constituted, development has been a challenge as well.

Various opportunities exist in these countries. Despite the poor state of agriculture, the region is rich in resources that are yet to be entirely exploited or explored. Kenya, also belonging to the East African Community (EAC), does have mineral programs (Henze, 2016). Countries in the Horn of Africa that belong to the East Africa community enjoy various trading benefits. With an aim to encourage development in the region, there have been efforts to eliminate intra-region tariffs. Mobile penetration has also created a great opportunity, with Kenya hitting 89% as of 2017 (Henze, 2016). The mobile money platform, M-Pesa is currently being utilized by 95% of homes outside the capital, Nairobi (Henze, 2016). In Somalia, the Zaad platform is very popular. The fishing industry also remains largely unexploited, due to poor infrastructure in Somalia, which boasts the longest coastline not only in the territory but Africa at large (Henze, 2016). The opportunities to build and develop capacity in the fishing industry exists as a result of local and international fish demand. A lot of focus is being directed to SMEs, which provide job opportunities, required basic services, and economic growth (Solomon et. al., 2017).

With respect to threats, the SMEs face several challenges that need to be addressed. Excess red tape, limited access to resources, and poor transport networks delay or restrict movement of goods and services, therefore hampering development (Henze, 2016). The long Somalia coastline representing a huge opportunity has attracted illegal fishing. Illegal fishermen from Iran, Yemen, and South Korea are reported to repeatedly break maritime laws and ravaging Somalia’s fishing areas (Solomon et al., 2017). The instability also leaves the waters open to piracy and illegal operations. Sorensen (2016) points out that already existing manufacturing giants have also hampered the Horn of Africa’s manufacturing industries. Countries such as India have brought down manufacturing costs, driving out Africa’s manufacturing countries (Sorensen, 2016). Healthcare issues have also become a major economic threat to the Horn region, where HIV/AIDS remain a key concern.

Some Investment and Growth Determinants

The most crucial step in resolving these economic constraints is providing viable policy recommendations to establish which of these factors characterize the sub-region in comparison to other economies of the developing nations (Calcagno, 2016). Suppose the region is derailed by the high cost of finance, that can be pinpointed to the high-interest rates, high account deficits, low savings, and other aspects which result to difficulties in borrowing from foreign donors (Bariagaber, 2016). Investments and other economic activities that are produced can be spired by remittances and foreign aid (Calcagno, 2016). Keen (2017) maintains that policies directed towards encouraging savings and exacerbating conducive investments can go a long way to help. Developing the financial sector is key for growth as well as oiling other areas of the economy (Keen, 2017).

Financial markets remain not very well developed in the region and banks still constitute the primary financial institutions (Keen, 2017). They dominate the region and offer short-term credit, characterizing the financial product. Capital markets are not well developed too, and in most countries like Somalia, they are non-existent. Financing infrastructural projects become a challenge, and short-term credit characterizes the short-term nature of such institutions’ deposits (Calcagno, 2016). Lending rates in the region remain among Africa’s lowest. It is also under the assumption that low investment levels are due to low capital returns either due to minimal appropriability or social returns (Keen, 2017). The latter may be the case due to insufficient human capital and insecurity. (Burbidge, 2015).

Besides infrastructure at large, power is also a crucial element that adversely affects or stimulates growth that remains wanting in the region. In 2015 for instance, electric power consumption per capita was 54, 108, and 184kwh in Ethiopia, Sudan, and Kenya respectively while in developing regions such as the Pacific and East Asia averaged at 2000kwh (Gesare, et. al., 2017). Energy is essential for economic growth, and a resource-based economy is dependent on power penetration (Keen, 2017).

A strong correlation exists between a country’s wealth and its electricity consumption. A lack of access to energy contributes to a high number of people living on less than $1 a day in the Horn of Africa region (Keen, 2017). Kenya and Ethiopia have made significant strides towards this, but the rest of the region’s countries such as Somalia, Eritrea, and Djibouti are still lagging in this regard. For these countries to reach the economic levels of developed regions, strong policies should be implemented that should be aimed at meeting the challenges of high and sustainable energy (Keen, 2017).

Many challenges facing the U.S. policy in the region remain. From this perspective, relations with Kenya, Ethiopia, South Sudan, and Djibouti are currently good while they remain terrible and complicated with Eritrea and South Sudan (Burbidge, 2015). Somalia remains a complicated and special case as the push for the demise of Al-Shabaab continues. The interrelationships between the Horn of Africa countries makes it practically impossible to have to endure a good relationship with all the member countries simultaneously (Solomon et al., 2017). Following the 9/11 terrorist attacks, the war on terrorism drove the US policy all over the region, except for Sudan where it played an instrumental role in the Darfur peace process (Gesare, et al., 2017). The only policy in Somalia remains counterterrorism although the United States continues to send some food and humanitarian assistance. Verhoeven, (2017) notes that it is however not ready to recognize Somalia’s independence until the African Union does the same, something that yet remains to happen.

Kenya, Ethiopia, and Djibouti continue to be allied with the United States in the fight against terrorism in the region, as well as the surge of Islamic extremists (Solomon et. al., 2017). Human rights violation is also another vice that remains at the core of US policy in the region. The US has encouraged the Ethiopian and Kenyan troops to stay in Somalia to fight extremist forces (Calcagno, 2016). It has contributed to the anti-piracy efforts in the region and the larger Western Indian Ocean over recent years (Verhoeven, 2017). A common trend in the US policy in the Horn of Africa region since the end of World War II has been in the provision of assistance in combating famine and hunger, which has been the US’s most successful policy to date (Verhoeven, 2017).

Recommendations for Strengthening Economic Development in the Region

Solidifying economic institutions within the Horn of Africa Region is fundamental for economic development (Sorenson, 2016). The plethora of underlying problems need to be addressed by all the economic stakeholders. There needs to be a will, effort and transparency in strengthening these institutions as corruption have also seen massive demerits that have undermined growth. It is widely accepted that stimulating growth through sustainable regional integration, infrastructure, and good governance helps address the poor economic state in the Horn region (Martin et al., 2018). It has been noted that the cost of addressing the region’s infrastructure needs is at around $25billion annually and developed countries can, therefore, try to double their funding as outlined in the 2005 G8 summit in Gleneagles (Martin et al., 2018). However, developmental obstacles remain largely political, especially in countries with the direct needs.

Political players have had a major role in the economic state of the Horn region. Greed and corruption have been the order of the day as leaders have taken selfish interests to enrich themselves at the expense of hampering the economy (Calcagno, 2016). Public funds have been misused and despite increased donor funding, most of the financial aid has not been invested in development. Further, the humanitarian sector is heavily influenced by political actors who are in most cases, the very reason behind anarchy and unrest in the world (Martin et al., 2018). Therefore, whereas humanitarian agencies should work independently, their decisions are seemingly compromised to befit a political agenda of some players over others (Sorenson, 2016). The misuse of public funds has derailed economic growth as well as the establishment of strong economic institutions.

It is not a doubt that all the countries in this regions are greatly endowed with natural resources that are currently underutilized. South Sudan, for example, has oil reserves that are underexploited due to war in the region. On the other hand, Although Kenya has underutilized agricultural land and excuses such as lack of enough water have been given in the past, millions of money are used yearly to contain floods related hazards. Harnessing such water could have been used for agricultural production that can sustain the whole nation without the country seeking foreign aid. Other than the above, although there is a significant amount of land in all of the countries in the horn of Africa and could have been used for profitable pastoralism that is beneficial to the economy, members practicing these economic activities continue to keep large herds as a form of insurance against draughts and theft. The production is in addition low. Such countries should not only insure these group of people but should also come up with education-related programs to empower such individuals. This way, land that is not arable can still be used for production. Even more, such individuals should be encouraged to engage in farming activities that have a little negative impact on the environment at large.

Implementation of digitized management information systems within the region’s governments is also key for monitoring and evaluation purposes in developing countries such as these countries in the Horn (Verhoeven, 2017). Transparency, documentation, and accountability would be beneficial in ensuring equitable distribution of resources in the areas that are in most need rather than areas that are less capital intensive. Because millions of money are lost to corrupt government officials, it has been difficult for capital set aside for development to be utilized. More stringent policies that regard corruption should hence be formulated not only to discourage such an unethical aspect among officials but also among all citizens at large. Investing in the education systems, health care, and road networks would be foundational to building these states after the reduction of corruption-related activities.

A reduction in the debt capital raised for growth and development should be a priority for such nations (Martin et al., 2018). Increase in foreign debt continues to ail the economies in focus with most of the operate with deficits in their budgets, year in, year out. Even when such debts are to be taken by such nations, such capital should be invested in economic undertakings that are likely to not only bare quick but also long-term economic success. Regardless, debts should be taken with caution. This is because some of the countries in this region have foreign debts that closely compare to their GDP, an aspect that undermines development in general. With a rise in debt comes increased taxation of nationals of these countries yet persons living under the poverty line are a majority. The poor continue to be highly taxed hence increasing the gap between the rich and the poor.

There is also a high need for governments of such countries to come together to encourage cohesion in the region. They also need to formulate all-inclusive policies that will focus on not only individual development but development that is concerned with the whole region at large. With such leaders acting good examples, it is possible for citizens from such nations to also participate in ensuring development amongst themselves.

Despite having taken progressive steps in the right direction, the Horn of Africa continues to be plagued by a myriad of socio-economic dynamics that hamper the region’s growth and need to be addressed to pave the way for economic gains. All the Horn of Africa member countries need to strengthen their ties to form a strong economic block for prosperity.

References

Abdi, A. I., & Aragie, E. A. (2012). Economic Growth in the Horn of Africa: Identifying Principal Drivers and Determinants.

Bariagaber, A. (2016).  Conflict and the refugee experience: flight, exile, and repatriation in the Horn of Africa . Routledge. 

Burbidge, D. (2015). Conflict in the Horn of Africa: The Kenya–Somalia border problem 1941–2014. 

Calcagno, D. (2016). Al-Shabaab and Market-Based Development: When Social Protection and Service Provision Go Awry.  Journal Article| July ,  21 (6), 20am. 

Gesare, A., Chelanga, P., & Banerjee, R. (2017).  Feasibility of establishing a market information system in the Horn of Africa: Insights from northern Kenya . ILRI (aka ILCA and ILRAD). 

Henze, P. B. (2016).  The Horn of Africa: From war to peace . Springer. 

Keen, D. (2017). The Real Politics of the Horn of Africa: Money, War and the Business of Power by Alex de Waal.  African Studies Review ,  60 (1), 218-219. 

Martin, J. A. R., Aguilera, J. D. D. J., Martín, J. M. M., & Fernández, J. A. S. (2018). Crisis in the Horn of Africa: Measurement of Progress Towards Millennium Development Goals.  Social Indicators Research ,  135 (2), 499-514. 

Solomon, N., Birhane, E., Gordon, C., Haile, M., Taheri, F., Azadi, H., & Scheffran, J. (2017). Environmental impacts and causes of conflict in the Horn of Africa: A review.  Earth-Science Reviews . 

Sorenson, J. (Ed.). (2016).  Disaster and Development in the Horn of Africa . Springer. 

Verhoeven, H. (2016). The real politics of the Horn of Africa. By Alex De Waal. 

Verhoeven, H. (2017). The Horn of Africa.  African Affairs ,  116 (465), 717-720.