Economic integration heading to reality in the Horn

Economic integration heading to reality in the Horn (Gemechu Tussa)

It is known that Ethiopia, sharing borders with Djibouti, Eritrea, Kenya, Somalia, South Sudan and Sudan, is a landlocked country striving to emerge as one of the fastest emerging economies worldwide. Recognition of the need to mutually develop with neighboring countries, it has been struggling for the past twenty five years to bring economic cooperation and integration among the people in the Horn Region.   

The landlocked country has established a strong diplomatic relations with countries surrounding it and away from it but Eritrea. The win-win approach of its foreign policy paved ways for honest relations with its partners. The basics for its improved relations with other countries in general and countries in the Horn Region in particular are its determination to alleviate poverty and ensure sustainable economic growth.

The economic development is multidimensional mainly including infrastructure, trade and investment. Ethiopia’s economy is growing from time to time. It needs to integrate this economic growth with other countries in the region.

One of the crucial infrastructures built in the Horn Region is the 682 kilometer long standard gauge rail network connecting Addis Ababa to Djibouti. Besides, the country has also created manufacturing plants for locomotive engines and railway signaling systems.

The sustainability of the growth is still in the same momentum. In his briefing to the House of Peoples Representatives on midyear budget performance, Prime Minister  Hailemariam Dessalegn remarked that, this year’s economic growth of the will likely surpass that of the previous budget year as there is an  increase oin Meher season production performance  would be  a promise  to predict  the likely growth of the economy.

As the country has been attempting to integrate the agricultural sector with that of the industrial sector, there are improvements of the development of the industrial sector from time to time. At the end of this fiscal year, it is expected to grow by 20.6 percent, while the service sector constitutes its growth rate about 10.6 percent. The expanding economy of the country demands interconnection with neighboring countries that is what is going on.

 

Djiboutian President Ismail Omar Guelleh, while addressing the Ethiopian House of People’s Representatives (HPR) recently praised Ethio-Djibouti economic relations as an indication to the efforts Ethiopia has been exerting to enhance economic integration in the Horn Region. He emphasized that; the two countries should keep the existing exemplary economic and political integration in the East Africa region.

 

“The economic integration of the two countries, which dubbed as the strongest in Africa has standard gauge railway line stretching from Port of Djibouti to Different parts of Ethiopia and electric power connection as “outstanding examples of integration,” he said, adding that; the two countries should lift barriers of trade so that the dynamic and young generation of both countries could harness opportunities for prosperity. 

 

Many economic analysts also witnessed that, Ethiopia has been exerting a tremendous effort to realize a strong economic integration in the Horn of Africa. It was also known that, the African Union Commission has also recognized this fact. The bilateral relationship between Ethiopia and Djibouti is a typical example of the country’s efforts for economic integration with its neighbors.

 

In fact, the crucial factor in economic growth and integration is ensuring lasting peace in the region. Unless there is peace and stability, it is impossible to think about economic development and integration. Due to this reason Ethiopia is attempting to create secured region; thereby, enhancing economic interconnectivity as these two are intertwined with one another.  

 

Therefore, the trade, infrastructure and security cooperation with Djibouti, Sudan, Kenya and South Sudan is well underway that could facilitate their economic cooperation and integration.  Djibouti, the major outlet for Ethiopia’s exports, has during the past nine months imported over 100 million USD worth items from Ethiopia.

Ethiopia’s all-round efforts to create regional integration are a manifestation for the African Free Trade Zone that the African Union has planned to meet.

 

One of the significant points in this respect is the fact that it is playing a leading role in infrastructure expansion. As a result of infrastructure connectivity, the trade balance between the Horn Countries has been showing an upward trajectory from time to time.  For instance, the Ethio-Sudanese trade balance has grown from 3 million to 300 million USD in the past 7 years.

 

Reports from the Ethiopian Investment Commission indicated that about 800 Sudanese investors have got license to invest in various areas in Ethiopia.  The import export relations between the two countries have also increased from time to time. As a result, Ethiopia has been exporting to Sudan a large amount of sesame.  

 

Trade and investment relations and the efforts exerted to bring economic integration also needs market infusion particularly in border areas. In line with the road and electric supply projects to neighboring countries, common market centers are also being established along borders of countries in the Horn Region.

 

At the very beginning, when the state in Eritrea declared its independency many analysts argued that, Ethiopia wouldn’t develop its economy as it lost Port Assab and become a landlocked country. They thought that, it is impossible for a country to develop its economy without having a sea rout. However, the reality on the ground witnessed quite different issues.

 

Land locked Ethiopia has been registering a wide range of economic growth. The country uses Port Djibouti so far and has also expanded its Prot options of other neighboring countries as its economy is growing fast. The completion of the infrastructures connectivity would introduce a new era to economic relations between these countries.

 

In this regard, there are various possibilities. It is possible for Ethiopia to use other ports, like port of Kenya, Sudan and Somalia. The most important thing is its efforts to maximize its economy and the efforts exerted to interconnect with the countries in the Horn Region.

 

Ethio-Kenya economic relations have also reached almost at an exemplary stage.  The construction of the Ethio-Djibouti railway which is hoped would enhance economic integration of the two countries. What Ethiopia has been doing to realize a huge economic integration among countries in the Horn Region is so recommendable.    

 

The provision of electric power to Djibouti and Sudan is a good start that indicates how these Horn countries could link together in their fight against poverty.

 

Ethiopia supplies 175 and 100 megawatts of electricity to Sudan and Djibouti respectively. Besides, Ethiopia has also signed a memorandum of understating with Kenya to provide electricity.  Ethiopia could contribute a significant role to the regional block that is carrying out extensive activities to realize the economic vision of the continent, the power connector to Sudan, Djibouti and Kenya.  Ethiopia is already contributing to Africa’s economic integration through its Airlines Business Enterprise. On one hand, it connected African countries each other and to the world promoting fast investment and trade interactions into the continent. It is therefore evident that, the economic integration in the Horn Region is heading to a reality with full participation of the people and the political commitment of states in those countries.

 

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