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Somalia’s Admission into EAC Heralds New Opportunities in the Horn of Africa

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The East African Community EAC admitted the Federal Republic of Somalia during the summit of EAC heads of state on 24th November 2023.  Somalia became a full member on 4th March, 2024. The EAC started as a three member states of Kenya, Uganda and Tanzania but as at 2024, it has a strong 8 member states making it one of the largest economic communities in the region. The region is now heading towards regional integration with strategic relations in political and economic policies and programs.

The membership into the EAC is expected to enhance regional integration in the areas of political, strategic and security cooperation. The Federal Republic of Somalia has had its political and security upheavals since the turn of the 20th Century following the overthrow of President said barre. The country was immersed in immense clan based conflicts that eventually morphed into regional militant groups like Al-Shabaab.

Somalia is still grappling with weak governance, instability, violence and transnational organised crime. The transitional Government headed by former president Mohamed Farmajo is credited for improving security through enhanced cooperation with regional countries. The largely unpoliced Somalia territorial waters has sparked piracy along the East African Coast and affected trade along the horn Africa region. During this period, the piracy menace was combatted through international partnership and cooperation.

The impending withdrawal of the African Union Transition Mission in Somalia (ATMIS) by December 2024 could create a security vacuum that armed militant groups might exploit to create instability in the region.  The EAC membership could assist since some of the main countries contributing to the mission are member states.

Somalia could request the deployment of EAC standby forces to fill the void as the country works to strengthen its security forces. In this sense, Somalia’s admission into the EAC will foster strategic cooperation in enhancing security both within and on the borders of Somalia.

Somalia is an emerging market-based economy recovering from years of conflict and a lack of governance.  It has an estimated population of over 17 million, with over 70 percent of the population classified as youth under 35.  An estimated 47 percent of the population lives in urban areas. It is an emerging market with unexploited natural resources and investment opportunities in such areas as oil and gas, energy, telecommunication, ports, and other services.

Somalia occupies a geostrategic location in the vicinity of some of the world’s busiest shipping lanes and this is a sector that EAC member states can exploit. During the last five reported years, the exports of Somalia have changed by $149M from $420M in 2017 to $569M in 2022. The most recent exports are led by Gold ($246M), Sheep and Goats ($163M), Bovine ($39.6M), Insect Resins ($32.3M), and Crustaceans ($21.4M). Its chief export commodities are livestock and bananas, which are mainly sent to Arab countries. Other exports include hides and skins, fish, and frankincense and myrrh.

Somalia’s Gross Domestic Product (GDP) is estimated at about $8 billion per year, with an estimated growth rate of 2.8 percent in 2023 and GDP per capita of about $450.  The World Bank forecasts that Somali’s GDP will grow by 3.7 percent in 2024. The Horn of Africa country  had its fair share of upheavals and this had affected  generally all facets of life especially exploitation of natural resources. The region is essentially virgin and ready for exploitation. The EAC membership is expected to facilitate regional investments in such areas.

The admission of Somalia into the EAC makes it a home to an estimated 302.2 million citizens, of which over 30% is urban population. With a land area of 5.4 million square kilometres and a combined Gross Domestic Product of US$ 312.9 billion, its realisation bears great strategic and geopolitical significance and prospects for the renewed and reinvigorated EAC. This is one of the largest markets and this is expected to enhance cross border trade in the region.

Somalia has largely a market-based economy with high rates of entrepreneurship and a strong business culture. The east African member states should envision a country that is virgin for cross border trade and investment in the financial sector.  The ongoing construction of the Isiolo- mandera should be a game changer to improve regional trade with Somalia.

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The Horn of Africa Gateway Development Project for Kenya are to improve the movement of people and goods and digital connectivity and access to social services to communities at designated locations along the targeted sections of the Isiolo-Mandera Regional Road Corridor. The EAC should also implore upon Kenya as a member state to open up other cross border trade corridors such as the Liboi, Gerilley border posts to enhance trade with Somalia.

Somalia’s accession into the EAC  has the potential to  promote cultural exchange and enhance  people-to-people relations within the region. This integration leads to a deeper understanding, appreciation, and celebration of diverse cultures, languages, and traditions. It encourages individuals to connect, share experiences, and collaborate on joint projects, fostering a spirit of unity and harmony.

Kenya’s long border with Somalia is mainly inhabited by communities of Somali extraction. These communities have maintained cultural and kinship relations since the early 18th Century. There is an estimated a billion dollar cross border trade among the communities on both sides of the Border. In the larger EAC member states, there is a large presence of Somali community in Uganda, Rwanda, Tanzania , Burundi and Congo.

Piracy in the Horn of Africa has been synonymous with Somalia due to its largely unmanned coastlines.

Somalia has had vibrant tourism sector before the country degenerated into abyss of instability buoyed by absence of effective government. Somalia’s is endowed with  long coastline, pristine beaches, and diverse landscapes that will be central to development of tourism With the recent milestone in peace and stability, there is hope that the  tourism industry can flourish, attracting regional and international visitors. This will contribute to job creation, foreign exchange earnings, and cultural exchange within the EAC.

Piracy in the Horn of Africa has been a near synonymous activity with Somalia due to its largely unmanned coastlines. The Somali Navy has been largely untrained and underfunded with limited capacity and means to combat piracy. Piracy in the Horn of Africa reached its apogee in 2011, with a record 212 attacks on merchant vessels. This posed significant financial and strategic issues to global shipping and commerce: the World Bank estimated the cost to shipping between 2005 and 2012 at around $18 billion a year.

The severity of the situation in 2011 instigated a multilateral response from all five members of the UN Security Council. At sea, a NATO-led coalition (succeeded in 2016 by the EU’s 34-nation Operation Atalanta) took to the Horn of Africa, while shipping company owners and flag states took special anti-piracy measures to protect themselves.

The recent sporadic attacks on vessels off Somalia’s coast have triggered concerns that piracy is making a resurgence in the region, which might lead to increase of ship insurance premiums at expense of traders. The East African and Horn of Africa maritime waters had been designated high-risk in 2009.

Somalia’s admission into the EAC should attract regional and global partnership in strengthening the capacity of Somalia in policing its territorial waters . this will significantly reduce piracy and effectively improving global trade along the horn of Africa circuit. This will not have come at a better time than  now as attacks by Houthi Rebels have  effectively halted trade along the Bab el-mandeb strait on the red sea.

 [ MOHAMED ABDULLAHI ABDI is a public policy economist and a certified secretary.]

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MOHAMED ABDULLAHIhttp://www.businesstoday.co.ke
Mohamed Abdullahi is a public policy economist, a researcher, a certified secretary and a governance consultant. He is a member of the Institute of Economic Affairs (IEA) and the Institute of Certified Secretaries (ICS). He comments regional economic and governance issues.
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