Horn of Africa Initiative Finance Ministers focus on innovative financing at 22nd Ministerial Meeting

Addis Ababa, October 24, 2024 (FBC) – Finance Ministers from the Horn of Africa gathered today in Washington D.C. for the 22nd Horn of Africa Initiative (HoAI) Ministerial Meeting, held alongside the Annual Meetings of the World Bank and International Monetary Fund. The meeting, co-chaired by Ahmed Shide, Finance Minister of Ethiopia, and Ms. Victoria Kwakwa, World Bank Vice President for Eastern and Southern Africa, focused on critical issues of resilience, and innovative financing mechanisms for sustainable development in the region.

Ahmed highlighted the importance of partnerships and welcomed new participants, including the newly appointed Kenyan and South Sudanese Finance Ministers and Ms. Nnenna Nwabufo of the African Development Bank. He expressed gratitude for the continued support of development partners, including the World Bank, African Development Bank, European Union, IGAD, BMZ, UK, and welcomed the prospective partnership with BADEA.

Discussions centered on the urgent need for increased climate financing and innovative solutions to address the growing challenges posed by climate change in the Horn of Africa. Ahmed Shide stressed the need for scaled investments in climate adaptation, resilience, acknowledging the insufficiency of current financing levels. He called for combined efforts in macroeconomic management, supported by the international community, to address these challenges.

The meeting featured a presentation on innovative finance for development and climate investments, followed by a discussion on potential support for the Horn of Africa Initiative (HoAI). Ahmed Shide encouraged participants to explore how presented opportunities could be operationalized without compromising debt sustainability. He also highlighted the role of observing institutions, such as the United States, Japan, European Investment Bank, Trade and Development Bank, and ZEP-RE, in catalyzing private sector investments. The meeting concluded with a commitment to formulate concrete strategies for scaling up innovative finance and enhancing climate financing efforts in the region. While securing innovative and climate-focused funding is crucial, maintaining traditional funding sources, particularly through IDA 21 and ADF-17 replenishments, remains essential.

The meeting marked the five-year anniversary of the HoAI, celebrating progress in building resilience, connectivity, trade facilitation, and human capital development. Ahmed emphasized the importance of regional integration in the Horn and took the occasion to announce a comprehensive review of the initiative’s successes and prospects at the next ministerial meeting which will be hosted by Ethiopia and co-hosted by development partners February next year.

The Horn of Africa Initiative (HoAI), launched in 2019, serves as a regional integration platform with member states that include Djibouti, Somalia, Kenya, Ethiopia, Eritrea, South Sudan, and Sudan. With a primary focus on promoting economic integration, the initiative targets priority areas such as infrastructure development, trade facilitation, investment, human development, and resilience.

The support is reflected in around US$11.8 billion having been already mobilized or being programmed towards direct and indirect implementation of the HoAI strategic pillars.