The African continent, characterized by a profound cultural heterogeneity and intricate social structures, harbors a largely underexploited endogenous asset with the potential to complement traditional development finance in the pursuit of its developmental objectives: the so-called social capital systems. While traditional development finance typically focuses on external aid, foreign direct investment, domestic tax revenues, and more recently, capital markets, a strategic leveraging of existing social networks and community-based organizations presents a powerful, often overlooked, avenue for private investment mobilization. By recognizing and strategically supporting these systems, African nations can foster more sustainable, inclusive and locally driven development.

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At the 24th Horn of Africa Initiative (HoAI) Ministerial Meeting, held on the sidelines of the World Bank Spring Meetings in Washington, the HoAI Ministers of Finance discussed a package of projects divided into two groups (quick wins and high gains), aimed at promoting trade and economic integration in the Horn of Africa, a region adversely affected by political instability, climate change and internal conflicts, and characterized by a high level of trade informality. The paper describing these projects was prepared based on consultations with both public and private stakeholders in Djibouti, Ethiopia, Kenya, Somalia and South Sudan, as well as with the Developing Partners supporting the HoAI. As next steps, the Finance Ministers agreed to deepen discussions and conclude, jointly with the Trade Ministers of the region, a Memorandum of Understanding on the development of an innovative Simplified Trade Regime (STR) “plus” with additional benefits compared to those provided by the existing ones, and a Joint Ministerial Declaration on the establishment of a Regional Trade Facilitation Committee, as an advisory body to the Ministers which will coordinate the design and supervision of regional trade facilitation programmes covering all the HoAI countries. During the event, the Chairmanship of the HoAI rotated to the Minister of Finance of Somalia, who will lead the HoAI for the next year. The HoAI Regional Trade Faciltiation Roadmap has been extended for further 3 years.