Political Economy

The IGAD region, also known as the Greater Horn of Africa, stretches over a land area of 5.2 million km2 to band five coastal states - Djibouti, Eritrea, Kenya, Somalia and Sudan - and 3 landlocked states namely, Ethiopia, South Sudan and Uganda. These coastal states have an aggregated Exclusive Economic Zones of 1.1 million Km2, including 55,875 km2 of continental shelves and 6,960 km of coastline. It also shares some 6960 km of international borders with its neighbouring countries namely, Egypt, Libya, Chad, Central African Republic, Democratic Republic of Congo, Rwanda and Tanzania. The maritime façade of the Horn of Africa is at the edge of one the world busiest navigation corridors and the global value chain ecosystems. This strategic location is emerging as a geopolitical hotspot with the shifting of the economic powers from the Atlantic to the Indo-Pacific region. Africa is the world largest island-continent and is geared to operationalise its unified market with over 1.2 billion people that will turn 2.5 billion by 2050. The “Horn of Africa” can be strategized as the gateway to Eurasia, the largest production and market platform of the planet with about two-thirds of the World GDP through the trillion-dollar Belt and Road Initiative. It is the first time in human history that so much of public and private investments are mobilised for trans-boundary infrastructure and connectivity projects. 

In 2016, the combined GDP of the region was US$ 337 Billion with a caput of US$ 650, which is less than US$ 2 per day. This estimate is less than US$ 1000 which is the current average of Sub-Saharan Africa. The primary sectors – Agriculture, Fisheries and Livestock contribute nearly 50 % of the GDP and 60% of export earnings of the region. The population of the IGAD region stood at 248 million in 2016 and is expected to attain 400 million by 2030. About 50% of the people are below 20 years and are jobless or underemployed. Business-as-usual will deprive the region of the potential demographic dividend unless it invests massively in its human capital. Despite the tremendous development potential of the sub-region, it is still plagued by extreme poverty, hunger and human miseries resulting from dwindling natural resources and environmental degradation which is exacerbated by involuntary immigration and Internally Displaced People;  ethnocultural and armed conflicts, corruption and terrorism. Over the past decades, IGAD has achieved an annual average growth rate of about 5 % but it was insufficient to improve the livelihood and wellbeing of the poorest of the poor.

The region is made up of about 70 % of Arid and Semi-Arid Lands (ASALs) that receive less than 600 mm of rainfall annually. The remaining part has a wide range of landscapes - highlands, swamps, rain forests and climates pertaining to equatorial geography. The total land area accounts for 7% of farmlands, 19% of forests and 28 % of permanent pastures. The remaining 46% is relatively unproductive or marginal land.  Despite the natural resources and environmental vulnerabilities, IGAD member-states are overly dependent on the primary sectors. They rely mostly on rain-fed agriculture, agro-farming and pastoralism which are challenged by water scarcity, environmental degradation and climate risks. The region is a haven for some 12 to 20 million of armed-conflict and climate-induced refugees. The combined inland water area is estimated at 222,358 km2, nearly 4.3 % of the total landmass which is much higher than the continental average of 2 % and the global average of 0.7%. However, they are naturally unevenly distributed across the region. As a regional block, IGAD can overcome these national disparities to uphold a sustainable Food-Water-Energy nexus. Blue Growth Initiative can inspire an integrated approach to inland and coastal water resources conservation and responsible development.

Fisheries and Aquaculture: The annual fisheries production of the IGAD region is estimated at one million tonnes, which is made up of 86 % inland fisheries, 9 % of inland aquaculture and 5 % of marine fisheries. The aggregated first sale value is about US$ 1.1 Billion per year. The post-harvest physical and economic losses vary between 40 and 70 per cent. Most of the marine inshore and inland fisheries are open-access, poorly managed and exploited erratically. The capture fisheries are predominantly subsistence or artisanal commercial activities and are mostly informal businesses. Marine aquaculture is inexistent. The raw fish and processed fish products are mostly consumed in the vicinity of the landing sites due to lack of social infrastructure and market logistics in the inner country. The per caput fish consumption in the IGAD region is 0.2 kg as compared to the global average of 20 kg. The sub-sector provides direct and indirect employment to some 50,000 people. The fisheries should not be considered a social safety net but reconnect to the national political economy as a growth sector that can conservatively double the current turnover and socio-economic benefits.

Port and Shipping: The seaports are the principal maritime outlets for international trade and for the development of freeport hub and export processing zones to tap into the global value chains. IGAD has facilitated significant investments in port infrastructure and connectivity as a requisite for its regional economic integration strategy. Several trade corridors have been established to connect the landlocked member states to seaports. Port of Djibouti has become a leading seaport and freeport hub in the Horn of Africa. Taking advantage of its strategic location and abundance of labour, the model can be replicated to create more wealth, export earnings and jobs. The Kenyan LAPPSET is a major pan-African multi-modal and infrastructure investment that will transform trade and development in Sub-Saharan Africa. It is a component of the China Belt and Road Initiative. The Chinese Government has a strategy for Africa, but it is crucial for IGAD to develop a coherent strategy to attract Foreign Direct Investments and Partnerships.

Tourism: The tourism industry has great prospects in the IGAD region but is at bay due to lack of hard and soft infrastructure beside safety and security issues. IGAD has formulated a Sustainable Tourism Masterplan 2013-23 and is rolling out the implementation in Ethiopia and Kenya before extending it to the other member-states. Despite its tremendous potential, only a few countries namely, Kenya, Uganda, Ethiopia and Djibouti are deriving substantial benefits from this industry. Some pilot initiatives have demonstrated the high-value chains of regionally integrated marine-coastal and wildlife tourism packages, but they could not be scaled-up due to the weak enabling environment.

Maritime Safety and Security: Maritime security is essential for supporting the Blue Economy. The two subjects are interconnected, particularly in the Western Indian Ocean region with the proliferation of piracy threats, intensification of armed conflicts; drugs, arms and human trafficking, illegal fishing and marine-related crimes over the recent years. Firstly, maritime security is an enabler of the Blue Economy, through safeguarding navigation routes, providing important oceanographic data to marine industries and protecting rights over valuable marine resources and activities within national EEZ. It is called to intensify the interventions against IUU fishing and associated fisheries crimes. Secondly, maritime security is an economic component of the Blue Economy. An expansion of the Blue Economy will create greater demand for maritime security capabilities that will, in turn, trigger increased investments and growth. However, the maritime security issues should not become a window dressing for over-militarisation of the Western Indian Ocean by the foreign powers while riding roughshod on the sovereignty of the Least Developed Countries of the region. Due to lack of transparency in government affairs, security functions are often sub-contracted to multinational mercenary corporations and there is a growing apprehension that security issues have become a lucrative business model for some domestic and external vested interests. A huge amount of money is invested in demonstration of powers rather than addressing the root causes of insecurity in the region which is a by-product of the failing states and underdevelopment. Without creating economic opportunities and social mobility for the frustrated jobless youths in the local communities, it is far-fetched to expect sustainable peace and security in the Horn of Africa. Let’s give these young people jobs to prevent them from taking a rifle. A proactive and holistic approach is required to address the vicious-circle human miseries and insecurity in the region, through the leadership of a trusted regional organisation like IGAD. Strong institutions are necessary for Democracy and Prosperity.

Gender Equality:  The IGAD region consists predominantly of patriarchal societies. There are pervasive gender inequalities in various socioeconomic spheres. The political influence of women is relatively lower than their male counterparts. The gender inequalities are no longer regarded simply as human rights or social policy issues with little economic significance. Traditionally, both men and women play a significant role in regional economies. However, there is no gender balance and fair treatment for female labour across the productive sectors. For instance, agriculture is female-intensive while industry and services are male-dominated. The sector growth patterns tend to influence the gender division of labour and income distribution unless there is an in-depth social transformation in the region. Womenomics is progressing in the IGAD region but a very low pace.

The IGAD region is dominated by informal sectors and women take more the 50% of the informal trade in the domestic and cross-border economies. There are serious gender inequalities regarding access to productive assets such as land, finance and technology, including education and health care. These differences adversely impact economic growth, productivity, and welfare. Educational equality may proxy for other types of equality, such as in health care access, access to agricultural inputs and household bargaining power. Intervention in the agriculture, informal economy and health would take the region far in bringing gender quality. A recent World Bank report revealed that the elimination of gender gaps in education alone in Sub Saharan Africa can lead to 0.5-0.7 percentage point increase in the annual growth rate of per capita GDP.

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The IGAD region

also known as the Greater Horn of Africa, stretches over a land area of 5.2 million km2 to band five coastal states - Djibouti, Eritrea, Kenya, Somalia and Sudan - and 3 landlocked states namely, Ethiopia, South Sudan and Uganda. These coastal states have an aggregated Exclusive Economic Zones of 1.1 million Km2, including 55,875 km2 of continental shelves and 6,960 km of coastline. 

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