The Proposed Horn of Africa Economic Integration: Political Economy and the Problem of Sequencing

In 2018, regional diplomacy created a new opening for economic cooperation. Ethiopia and Eritrea formally ended their state of war on July 9, and in September Ethiopia, Eritrea, and Somalia committed themselves to comprehensive cooperation and established a Joint High-Level Committee to coordinate the declaration. At Bahir Dar in November, they again emphasized regional economic integration. Yet the public texts remained institutionally underspecified. They did not define integration as a free-trade area, customs union, or common market, or assign supranational authority.

The economic case for cooperation

The economic rationale is strongest where geography already creates interdependence. Ethiopia’s landlocked economy depends on external trade corridors. The diplomatic opening could widen policy space for corridor diversification, route competition, and cross-border investment; material gains would still depend on later policy and infrastructure decisions.

Realizing those opportunities would require complementary capacity beyond ports. Corridor integration depends on coordinated infrastructure, administrative rules, and logistics services. Distribution is a separate political-economy problem because integration can redistribute customs and transport income, alter investment patterns, and expose firms to new competition.

Institutional architecture matters

By 2018, the tripartite initiative entered a region with an existing institutional framework for economic cooperation. IGAD’s strategy identified Regional Economic Cooperation and Integration as a strategic sector. The tripartite arrangement therefore raised a coordination question: would it complement IGAD’s mechanisms or develop alongside them without a defined division of institutional work?

The continental setting provided a second coordination layer. The AfCFTA Agreement was signed in Kigali on March 21, 2018. The tripartite initiative therefore needed to specify how its rules would connect with the emerging continental framework and avoid duplication.

Sequencing, legitimacy, and credible commitment

The distinction between diplomatic rapprochement and economic integration shifts attention to domestic political institutions. Governments pursuing durable commitments would need to anticipate winners, losers, and institutional veto points. Consultation with legislatures, organized economic actors, and affected border communities would therefore form part of credible institutionalization.

A prudent sequence would begin with bounded cooperation in transport links, customs coordination, and border administration. A second stage could address investment and labor mobility once monitoring and dispute-resolution mechanisms were functioning. Deeper market commitments should follow after compliance with narrower agreements.

What to watch

Three institutional tests deserve attention. First, governments should define what “integration” means and specify how the tripartite initiative relates to IGAD and AfCFTA. Second, negotiations should establish rules for distributing costs and gains, financing infrastructure, and monitoring compliance or resolving disputes. Third, the framework should clarify the role of Kenya and other major regional economies while providing credible channels for affected constituencies to participate.

The central task is converting diplomatic momentum into rules that participating states and economic actors can rely on. Each stage should have a defined purpose, enforceable rules, and a credible mechanism for representation and distribution. The institutional test for durability is whether those arrangements become routinized in rules and procedures that survive beyond summit diplomacy.