Dehai News

EurAsiaReview.com: The Horn Of Africa States: A Gateway For Trade And Investments – OpEd

Posted by: Berhane Habtemariam

Date: Thursday, 07 September 2023

By Dr. Suleiman Walhad

September 4, 2023

The scramble for Africa is clearly apparent in these turbulent times. The military coups in Niger and Gabon over the past month and the earlier coups in Mali, Burkina Faso, and Guinea mark a clear manifestation of this struggle as France, a symbol of the West is being told to leave while other forces representing the East, mostly Russia but certainly also China appear to be welcomed.

 

The West and East are now at each other’s throats competing over the resources of the continent. The Horn of Africa States are not safe from this markedly violent competition and this region adds its significant geostrategic location to its resources. How this confrontation would spread to and affect the region in the coming months or years is to be seen. But certainly, Russian appearance has been noticed in Sudan’s violent confrontation between the forces vying for control of the country. The Chinese are already present in Djibouti where they maintain their first naval presence outside of China. The United States, the French, and many other NATO forces and allies are also present in the region.

The region is certainly a major geostrategic location as it overlooks one of the main seaways of the world – the Red Sea, Bab El Mandab, the Gulf of Aden, and the Somali Sea (northern Indian Ocean). Both sides must be working on strategizing how to protect their interests in the region. The irony of the matter is that the countries of the region are fully aware of the presence of all these foreign forces but are not doing much about it. Each country still works on its old nation-state format. They do not look at it as a collective threat to the region or for that matter as a collective opportunity to exploit for the interests of the region.

The largest country of a region or the wealthiest usually gathers around it the countries neighboring it into a regional block. In the case of the Horn of Africa States, the most populous country is Ethiopia with some 120 million people. It is also the largest in terms of surface area and owns the largest economy and hence the wealthiest. It should have been leading the construction of an integrated regional economy, particularly, since it has no access to the sea and, therefore, needs the coastal countries linked to its economy.

The region consists of over-confident and fiercely independent states. They, indeed, had quarrels in the past and are now marked by inter-state conflicts mainly due to ethnic-based competition for power. This does not, however, negate their ability to work together as they enjoy the same historical background and the same people. The leadership of the region and more specifically the larger states, namely Somalia and Ethiopia should be working together, not leaving behind their brothers in the region, namely Eritrea and Djibouti. They, indeed, all need each other and can recreate the traditional highland/lowland cooperation of the past before this was interrupted by the nation-state format brought in by Europe.

The initiative should normally come from Ethiopia, which is the largest state that borders all other three countries, but this does not negate the other countries of the region initiating the process of creating an integrated economic region, which would allow the region not only to face non-regional parties collectively but also create harmony in the region and hence peaceful utilization of its resources.

 

Such a regional block would enable it to take advantage of the Chinese One Belt One Road Project to create trading connections with other parts of the world. Its maritime resources would also enable it to have trading and other economic connections with India, another growing large economy in the vicinity, with which the region had connections for millennia. The regional bloc would also benefit from its connections with the Arab world on the other side of the Red Sea, the Gulf of Aden, and the Somali Sea.

Working with the Chinese/Indian economies does not negate the region’s connections with its traditional relations with the West, mostly France, Italy, and the United States. The British and other European countries can also be other trading parties of the region. Even the Scandinavian countries have recently become engaged in the region, although most of them work as fronts for others through relief projects they carry out in the region. They have not yet realized that the region is tired of relief and NGOs that do not add anything to the growth of the economies of the region or the high unemployment of its youth.

The region would welcome all parties that would add value to the region’s well-being be it trading or maintenance of good relations with others. The region has seen enough conflicts and would welcome parties with no ulterior motives. The region certainly knows those trying to hide but whose backs are clearly exposed.

Some countries are clearly involved in splintering the region with the hope they can take advantage of its resources. This, indeed, is an unworkable proposition as the region has historically defended its turf. A weakness in a specific moment in time does not represent the general composure of the region. Perhaps they should learn from the history of the region.

With this background, we should then look at what the region offers collectively to those who would like to establish trading and investment links with it. The region owns vast agricultural lands, vast maritime resources (some 4700 km excluding the coasts of its numerous islands), vast mineral resources including oil and gas both onshore and offshore, gold, platinum, copper, iron ore, coal, zinc, lead, nickel, uranium, lithium, and many more. The region owns many rivers and lakes and hence a significant hydropower resource base. It also has geothermal and wind energy sources. The region further enjoys many hours of sunlight and hence has a potential solar power energy resource base.

The fact that it appears poor is due to the continuing conflicts which appear to have roots from beyond the region, and which are bound to end, hopefully soon. The region owns and enjoys its own grains such as teff, its native barley and wheat, sorghum millet, and corn. It has a large, domesticated animal population consisting of camels, sheep, goats, and cattle and poultry. The region also owns huge maritime food resources including fish and other seafood.

The significance of the region in Global Trade

It is reported that some 20 percent of global trade and world shipping pass through the waters linking the Suez Canal and the Indian Ocean, which emphasizes the importance of its ports not only for the world but also for the region. The Port infrastructures have been developing and expanding but not enough to satisfy not only a growing region but also the continually improving and changing requirements of maritime technologies and shipping. There are currently not enough ports on the long coast of the region which stretches for some 4,700 km. The old ports of the region still dominate such as Djibouti, Berbera, Assab, and Massawa. The ports on the Indian Ocean including Mogadishu, Merka, Barawa, and Kismayo have been complimented by Gara’ad. But the regional ports remain short of the maritime services the region could be deploying, not only for its imports and exports but also for other global shipping companies and trading nations.

There are few ship repair ports in the region or fueling ports. There are also no tourism-oriented ports handling yachts and other maritime luxury travelers, in terms of hotels, water sports, and the like. The current port infrastructures are not yet enough to satisfy the import and export needs of the region and more particularly those of Ethiopia. The current transit consignment capacity of the regional ports appears to be limited and so is its container warehousing.

The recent discoveries of oil and gas in the region also point out the glaring absence of port infrastructures geared towards the handling of the exports of these vitally important products, which would thus require massive investments.

This would require regional cooperation of the states of the region and Ethiopia, which represents the largest economy of the region needs to push for such cooperation as a regional bloc. This would work to its advantage, while at the same time improving the relations of the countries of the region towards each other, away from the single-state model which does not enable the region to collectively address its global affairs.

Peace and stability of the region are prime requirements for the development of the region’s maritime resources, not only in terms of food (fishing ports and infrastructure) but also for its international trade and global shipping. This can only be achieved through a collective handling of the ills that currently irk and vex it.

The region has not yet embarked on becoming a gateway for the rest of Africa, which it can easily become should it launch such a program together. A long coast of some 4700 km is currently underexploited and needs a massive and determined operation to harness it fully. A massive port infrastructure would also help improve connections to the rest of Africa through rail and roads, thus helping travel of both cargo and people in the continent. Since currently, manufacturing has moved to Asia, massive ports, rail, and road infrastructures in the Horn of African states leading to the rest of Africa would reduce the costs of freight and the time delays of product entries into their markets. This would also reduce the cost of Africa’s exports to Asia, which would naturally include many of the raw materials from Africa including semi-finished products to Asia’s manufacturing corporations and countries.

From the aforenoted, we must observe the region’s need for massive transport infrastructures and ports, related not only to the old ones but also to the construction of new ones to cater to and underpin its growing economy, while also serving those others who need the facilities of the region be it Africa or others. Certainly, massive transport and port infrastructures in the region would benefit not only the region but also investors who see value therein, and hence enable the region to become not only a gateway for trade but also for investments.

 

Dr. Suleiman Walhad

   *Dr. Suleiman Walhad writes on the Horn of Africa economies and politics. He can be reached at suleimanwalhad@yahoo.com.


WARSAY FULL LIVE MUSIC SHOW - New Eritrean Music 2022(Official Video)

Dehai Events