世界发展银行-Economic-Geography-Analysis_38页_9mb

Summary of the Horn of Africa Regional Economic Memorandum Background Paper 1

Core Content

This background paper provides an economic geography analysis of the Horn of Africa (HoA) region, focusing on the spatial distribution of economic activity, living standards, and the challenges faced by lagging areas. It uses the framework from the 2009 World Development Report to assess the region's socio-economic trends and policy implications. The HoA includes five countries: Djibouti, Eritrea, Ethiopia, Kenya, and Somalia.

Main Trends and Progress

Economic Growth

• Between 2014 and 2018, the HoA region outperformed sub-Saharan Africa (SSA) in terms of economic growth, with an average annual growth rate of 4% in per capita GDP.
• Ethiopia, Djibouti, and Kenya recorded the highest per capita growth rates.
• Despite growth, income levels in the HoA remain below the SSA average, with the four HoA countries averaging about US$1,000 in 2018, compared to US$1,600 in SSA.

Poverty Reduction

• Poverty rates declined from 40% in 2005 to 33% in 2015 in the HoA.
• However, the absolute number of people living in poverty increased by 9% over the same period.
• Poverty rates range from 17% in Djibouti to 69% in Somalia.
• An estimated 57 million people across the HoA live below the US$1.9 a day poverty line.

Human Development

• Human Development Index (HDI) improved in all HoA countries between 2014 and 2018, except Eritrea.
• HDI remains below the Least Developed Countries (LDC) average, except for Kenya.
• Education outcomes remain weak, with only half to two-thirds of children completing primary school (except Kenya, where completion is universal).
• Secondary school enrollment is low, and 45% of youth aged 15-24 have completed primary school or more.

Labor Market and Employment

• Labor force participation is high in the HoA, particularly in Ethiopia, Eritrea, and Kenya, with rates reaching 86%, 77%, and 74%, respectively.
• Self-employment and unpaid family work dominate employment in all HoA countries except Djibouti, where wage employment is more prevalent.
• Youth unemployment is significant, especially in Ethiopia, Kenya, and Somalia.
• NEET (Not in Employment, Education, or Training) is a major issue in the HoA, with a considerable share of youth not engaged in productive activities.
• Unemployment is higher in urban areas, particularly among youth, due to limited job opportunities and the informal nature of the labor market.

Economic Geography: 3D Framework (Density, Distance, Division)

Density

• Economic and population density are closely linked, with economic activity concentrated in urban and agricultural areas.
• In Ethiopia, 90% of the population resides in the highlands, despite them covering less than half the country.
• In Kenya, 20% of counties account for over 40% of the population, mainly in the southwest.
• In Eritrea, the top 10 most populated districts (mostly in the northeast) account for around 40% of the population.
• Border areas have low economic density and are dominated by pastoralism and trade, with limited access to services and infrastructure.

Distance

• Economic activity is concentrated in areas with better market access and agricultural potential, creating a spatial divide between leading and lagging regions.
• Border areas suffer from high economic distance, limiting their ability to access markets and services.
• The working-age population is projected to grow from 107 million in 2020 to 143 million by 2030, increasing the demand for jobs and economic opportunities.
• A demographic dividend is not expected soon due to slow fertility decline and weak institutional capacity.

Division

• Border areas are politically, economically, and socially marginalized, with weak state presence and high levels of conflict, violence, and displacement.
• These areas experience poor service delivery, infrastructure, and environmental degradation, which spill over national boundaries.
• Informal and illicit activities thrive in these regions due to weak governance and limited access to formal economic systems.

Key Policy Recommendations

1. Integration through spatially blind institutions and policies

   • Promote regional integration that is not biased towards urban or core areas.
   • Develop cross-border infrastructure and trade corridors to reduce economic distance.

2. Investments in secondary cities

   • Focus on developing secondary cities to reduce the concentration of economic activity in a few major urban centers.
   • Enhance market access and economic opportunities in these cities to promote balanced regional development.

3. Leveraging deeper integration across the border areas

   • Strengthen cooperation and coordination between neighboring countries to address shared challenges in borderlands.
   • Improve governance and service delivery in border areas to enhance living standards and reduce inequality.

Conclusion

• The HoA is marked by spatial disparities in economic activity, living standards, and access to opportunities.
• Border areas face low density and high distance, limiting their potential for growth and development.
• Location and wealth significantly influence access to basic services and opportunities.
• Policy efforts should focus on integrating lagging regions, improving infrastructure, and reducing economic distance to foster sustainable growth and development across the region.