African Development Bank Annual Meetings – Vice President Akin-Olugbade hails Horn of Africa Initiative Milestone of $10 Billion in Portfolio Commitments

African Development Bank Group Vice President Marie-Laure Akin-Olugbade has praised the Horn of Africa initiative for reaching $10 billion in total commitments in its nearly five years of existence.

She spoke during the initiative’s 21st ministerial meeting which took place in Nairobi on May 28, 2024 on the sidelines of the banking group’s annual meetings.

It brought together finance ministers from Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan and Sudan to take stock of the portfolio’s performance and discuss strategies to attract more private investment to the region.

The initiative works to deepen regional economic integration, tackle fragility and increase resilience to promote peace and stability and improve living standards for the people of the Horn.

“We launched the Horn of Africa initiative five years ago in 2019 with three development partners, the African Development Bank, the European Union and the World Bank, and today it has grown to five development partners as we have welcomed BMZ-Germany and FCDO-UK The portfolio has grown to about $10 billion in total commitments across the four pillars of the Horn of Africa initiative,” said Akin-Olugbade, who co-chaired the meeting with Ethiopian Finance Minister Ahmed Shide. She praised the initiative’s progress in strengthening food security and combating locust swarms.

The initiative’s four pillars are regional infrastructure connectivity; economic and trade integration; building resilience to climatic and other shocks; and human capital development.

Minister Shide said: “Together we have the power to transform this potential into tangible prosperity to improve the lives of millions through improved infrastructure, economic integration and proactive measures against the threat of climate change and food insecurity.”

He added: “We are also faced with the necessity to address the economic challenges looming over our region. Confidence in support on favorable terms will be very important. There is an urgency to discussions on debt sustainability and innovative financing solutions, such as debt swaps, which are critical to easing the resource constraints weighing on our economies.”

The meeting also included an update on the implementation of the Border Country Roadmap adopted at the 18th Ministerial Meeting in Addis Ababa in October 2023. The Roadmap, covering the period 2024-2048, represents a shared vision and strategy to accelerate the development of the country’s borderlands . The Horn of Africa, defined as regions on the fringes of its nation-states.

The finance ministers emphasized the need to mobilize more investment in border regions, building on existing commitments from development partners.

Praising the Borderlands Roadmap, UK Secretary of State for Foreign, Commonwealth and Development Andrew Mitchell said: “From the threat of violent extremism to conflict and climate shock, these are issues that cut across national borders. A joined-up approach is therefore needed to to solve them,” he said.

He noted that the UK is working closely with members, including through a £15 million program to build stability along the borders between Kenya, Somalia and Ethiopia.

Germany, which became the first bilateral partner to join the initiative last year, announced plans to further contribute to its goals. “I am pleased to announce that, as a next step in our partnership, we intend to announce a €10 million announcement to the Multi-donor Trust Fund, which is administered by the World Bank,” said Birgit Pickel, Director General for Africa. , BMZ.

Representatives from, among others, the governments of Japan, Canada and the Netherlands as well as the Islamic Development Bank and the Arab Bank for Economic Development in Africa (BADEA) also attended the meeting. BADEA, an observer to date, announced its intention to join the initiative as its sixth development partner.

The results of the portfolio review were presented at the meeting. While 75 percent of portfolio projects received a satisfactory rating, there were areas for improvement, including addressing chronic capacity constraints across the region, particularly in PFM audit and procurement.

Akin-Olugbade stressed the need for the initiative to learn from past experiences and focus on improving portfolio performance and efficiency while reducing bottlenecks.

“As development partners, we need to continue to learn how to better design, prepare and execute operations in the region, which has unique challenges at both regional, national and sub-national levels,” she noted.

The Vice President also highlighted ongoing discussions on the reform of the multilateral development banks and on how multilateral development banks can work and coordinate more effectively as a system.

Referring to a Memorandum of Understanding (MoU) between the African Development Bank and the World Bank, which is under development, she noted: “This shows how we are constantly thinking about ways to better serve our clients – including within the framework of the African development The Bank’s new 10-year strategy.”

Last year, in the role of co-chair for the first time, the banking group hosted the 17th ministerial meeting of the Horn of Africa Initiative during its 2023 annual meetings in Egypt.

At that meeting, Djibouti’s Minister of Economy and Finance Ilyas Moussa Dawaleh and Somalia’s Finance Minister Elmi Nur signed a $72 million financing agreement for the bank-backed Djibouti-Somalia corridor project. The bank group’s director general for East Africa Nnenna Nwabufo signed on behalf of the institution.

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