Strengthening Regional Engagement and Dialogue in East Africa

East and West of the Red Sea. Photo Credit: NASA image courtesy MODIS Rapid Response Team, Goddard Space Flight Center. 

By: Iakovos Balassi, Columnist 

East African states must take coordinated, proactive measures to deter exploitation and manage the impacts of foreign investments in the region. The geopolitics of East Africa are shifting, in large part due to the military and economic investments from foreign nations, chiefly among them Saudi Arabia, Qatar, United Arab Emirates (UAE), Turkey, and China.^{[i] [ii]} Although this increase in investment has brought positive developments to the region, such as critical infrastructure projects, military training, and increased economic opportunity, it has also produced negative impacts that directly threaten the future stability of East Africa.

The sphere of influence projected by these foreign investments is wide. In recent years, the UAE, Turkey, China, and Qatar have greatly increased their presence in East Africa.^[iii] Additionally, Saudi Arabia, Russia, and Qatar all have proposed and approved military infrastructure projects to be built in the near future.^[iv] In some instances, the presence of these foreign-owned establishments has fueled existing regional tensions. For example, in March of 2018 Somaliland signed an agreement granting 51% ownership of the Port of Berbera to a UAE-owned company. The deal has sparked a damaging controversy with the Federal Government of Somalia, who rejects the port deal, viewing it as a violation of their sovereignty and fearing agreements with foreign nations will strengthen Somaliland.^[v] In Ethiopia, Somalia and Sudan, a number of recent land acquisitions by foreign nations have negatively impacted local populations. Land leases granted to foreign agricultural and tourism investors have caused displacement, fueling local land disputes.^{[vi] [vii]} Across East Africa, multinational investors have imported their own laborers to work on projects, displacing local farmers, diminishing investments’ returns to local populations, and causing widespread food shortages.^[viii] In October 2018, Ethiopia responded to these harmful practices by revoking land leases held by dozens of investors after they failed to create the number of jobs they promised.^[ix] This action is an encouraging development in the effort to curb the negative impacts of foreign investments and an example of the proactive measures East African nations should be taking.

To maximize the opportunities these foreign dealings provide, East African leaders must get ahead of potential problems before they enlarge and cause further regional divisions. Increased engagement between African states should focus on the creation of a regional investment agenda, and prevent strained relations between Gulf states from worsening divides within African regional blocs as these foreign nations compete for influence on the continent. The creation of a Red Sea forum has been proposed as a vehicle for bolstering engagement between the Gulf and Horn of Africa.^[x] While this would be a positive step, East African states must establish formal mechanisms independent of foreign nations and investors. African nations should consider the potential use of existing regional institutions through which shared interests can be communicated and regional disputes settled.

The Intergovernmental Authority on Development (IGAD) is a capable home for such an instrument. IGAD is one of eight subregional trade-blocs on the continent, known as Regional Economic Communities (RECs). Across Africa, RECs provide significant strategic utility to their members.^[xi] Comprised of eight member states (Djibouti, Ethiopia, Somalia, Eritrea, Sudan, South Sudan, Kenya, and Uganda) the IGAD promotes regional cooperation on an array of issues including trade, security, health, and climate; adding this formal mechanism to its structure would fit well within its mission.^{[xii] [xiii]}

In practice, IGAD oversight of foreign investment could take the form of a committee that studies current foreign agreements, future risks, and related geopolitical shifts. Ultimately, their goal should be to inform future contracts and establish a consensus Red Sea Agenda for IGAD members to be used as a framework for engagement with foreign investment partners. To be clear, this kind of mechanism should not police or interfere with individual states’ investment agreements. Rather, this would provide a forum for members to better understand the impacts of these investments, alleviate risks, and address problems that arise.

Such an instrument could also help IGAD overcome one of its largest weaknesses: its lack of civil engagement.^[xiv] IGAD decisionmaking is hierarchically structured, meaning decisions and policies largely require consensus among heads of member states.^[xv] This makes policies with clear incentives for the entire region easier to pass, as there is less red tape. As a result, however, the process does not require the involvement of civil society. Taking a more proactive approach to managing foreign investment projects in East Africa would create greater incentives for IGAD to increase its civil engagement. This could be one avenue, albeit quite limited, in which the organization can improve its local outreach and strategic utility.

The problems caused by increasing foreign investment across East Africa cannot be left to fester. Bolstering engagement at the regional level on these issues should be a priority for all East African states. IGAD can provide a roadmap for future oversight and management of foreign investment in the region, while strengthening the utility of the organization. These are small but significant steps toward mitigating the negative consequences of these investments and ensuring stability in the region.