Opinion: Trade, Politics and Resilience in the Horn of Africa

“Trade is more than commerce; it is the foundation for resilience, regional stability and sustainable economic growth in an increasingly uncertain world.”- Liban Obsiye

International business has started to take a closer look at the commercial opportunities on offer in Somalia: the Somalia–Italy Business Forum took place in June 2026, while the EU–Somalia Business Forum will be held in October 2026. 

This growing interest reflects increasing confidence in Somalia's economic reform journey and its ambition to become an increasingly attractive place to trade, invest and do business.

Somalia has made trade and regional integration the centrepiece of its chairmanship of the Horn of Africa Initiative (HoAI). This reflects a broader recognition that in a region shaped by conflict, climate shocks and supply-chain disruptions, closer economic ties between neighbouring countries are not only an economic objective, but also essential for building resilience and promoting stability.

In preparation for a forthcoming inaugural meeting of HoAI Trade Ministers which will be chaired by Somalia's Minister of Commerce and Industry, H.E. Gamal Mohamed Hassan, national consultations have been taking place across all HoAI member states over the past few months. 

These meetings brought together government institutions, private sector actors and other stakeholders to identify practical barriers to trade and agree on priority actions to strengthen cross-border commerce. This reflects a growing effort across the region to move from broad political commitments to practical reforms that businesses can see and use.

Today, trade is defined as much by geopolitical as by economic considerations. Conflict and instability are affecting shipping routes, driving up fuel and fertiliser prices. Meanwhile, climate change is driving a destructive cycle of droughts and floods, especially in shared border regions. Food insecurity remains a persistent challenge.

Furthermore, across every HoAI member state, governments are facing the interconnected challenges of keeping their economies stable, managing tight public finances and debt, creating enough jobs for rapidly growing populations, and generating the long-term growth needed to improve living standards.

How countries respond to climate shocks, conflict, supply-chain disruptions and economic uncertainty was a major theme at the recent African Development Bank Annual Meetings and the Islamic Development Bank Group's meetings shortly afterwards. 

Participants also focused on how African governments can keep their economies on a stable macroeconomic footing, attract more private investment to offset dwindling official developmental assistance and higher borrowing costs, create jobs for rapidly growing populations and build stronger, more diverse economies in an increasingly uncertain global economy.

These challenges are deep and structural for most developing nations. However, the very fiscal space that is desperately required will not magically appear for any nation without new bold ideas. 

A credible and sensible central theme of today’s international economic thinking is perhaps its most obvious: Trade is critical to deeper regional integration and economic development.

The good news is that, over the past decade, significant work has gone into making trade easier across the Horn of Africa. Ports are being expanded. 

Customs systems are becoming faster and more transparent, and governments are working to reduce barriers that make it difficult and expensive to move goods across borders. For the most part, the technical groundwork has either been completed or clearly identified.

These reforms are about much more than making it easier to move goods across borders. By reducing costs, helping businesses compete and reach more customers, they help firms expand, encourage new investment and create better jobs.