Africa's Wager in a Fractured World: The Horn Between Leverage and Dependency

There is a phrase that has moved from academic papers into ministerial speeches and newspaper columns at remarkable speed over the past two years: geoeconomics. What it describes is the collapse of a distinction that once organised much of international policy — the separation between the logic of economics and the logic of geopolitics. For several decades after the Cold War, that separation held. Trade flows were managed for efficiency. Investment was routed to wherever returns were highest. Supply chains crossed borders without regard for the politics on either side of them. The resulting system was imperfect, unequal, and contested, but it operated according to broadly shared rules and generated real gains.

That system is now being deliberately unwound. Economic decisions are increasingly subordinated to security calculations. Supply chains are being rewired not to find the cheapest inputs but to reduce dependence on states that might become adversaries. Trade and access to critical resources are deployed as weapons. The rules-based multilateral order that underpinned the old system has not formally collapsed — but the major powers are no longer reliably committed to it, and the institutions designed to sustain it are visibly weakening.

For the countries of the Horn of Africa, this transition is not an abstract geopolitical development happening elsewhere. It is reshaping the environment in which every consequential domestic choice — about investment, energy, trade, security — must be made. The Horn sits at the intersection of some of the most contested elements of the new geoeconomic order: Red Sea shipping lanes that carry a significant share of global trade, mineral deposits that the competing powers need for their industrial transitions, and a coastline that every naval power with Indo-Pacific ambitions now considers strategically relevant. The question facing Horn governments is not whether this shift will affect them — it already has — but whether they can navigate it with sufficient clarity and coherence to benefit from the competition rather than simply absorb its costs.

The Floor Is Falling Out of Development Finance

The first and most immediate consequence of the fracturing world order for sub-Saharan Africa is fiscal. Official development assistance — the grants, concessional loans, and technical cooperation flows that have for decades helped governments fund public services, social safety nets, and infrastructure — is in sustained decline. The budget pressures in major donor countries, the reorientation of foreign policy toward strategic competition, and the growing preference for bilateral deals over multilateral channels have all combined to shrink the resource envelope that African governments can rely on.

This is not simply a technical problem of development finance. It is a structural shift in the terms on which African states relate to the rest of the world. The old ODA model — however paternalistic and conditionality-laden — provided a degree of predictability. Governments could plan budgets, staff ministries, and maintain services against a baseline of external support that, while never generous, was at least consistent. That baseline is no longer reliable.

Simultaneously, the development model that produced the most dramatic poverty-reduction results of the past half-century — outward-oriented, export-led industrialisation, the approach that transformed South Korea, Taiwan, and later China — is no longer available in the form that made it work. The tariff structures, the open export markets, and the tolerance for industrial policy that the Asian Tigers exploited emerged from a specific moment in global economic history. That moment has passed. Rich-country markets are increasingly closed or conditional. Supply chains are being reshored. The industrial policy space that was once fought over is now crowded with competing claims from far more powerful economies.

What this means for Horn countries pursuing industrialisation — Ethiopia most visibly, but also Kenya and an emergent Somalia — is that the path that others travelled cannot simply be replicated. A new development model is needed, and the outlines of what it might look like are not yet clear. That uncertainty is genuine and should be named as such, rather than papered over with slogans about the African century.

The Mineral Question: Leverage or Exposure?

Against that difficult backdrop, one shift in the geoeconomic environment works in Africa's favour: the sudden and intense competition for the continent's mineral resources. The energy and technology transitions underway in the major economies require lithium, cobalt, coltan, rare earths, and other inputs in quantities that current supply chains cannot easily provide. Africa holds a disproportionate share of these reserves. The result has been a rapid and sometimes aggressive surge of interest from China, the United States, Europe, the Gulf states, and a set of middle powers all simultaneously trying to lock down access.

The Horn has a stake in this competition. Ethiopia holds significant gold, tantalum, and potash reserves, and its hydropower capacity gives it a renewable energy advantage that is increasingly relevant to green industrialisation strategies. Kenya's rare-earth deposits have attracted renewed attention. Even Somalia, whose institutional capacity to manage resource extraction remains limited, is sitting on offshore hydrocarbon deposits that have drawn serious exploration interest.

The critical variable determining whether mineral interest translates into development benefit or into new forms of extraction and conflict is not the existence of the resources but the quality of the state that manages them. Countries with coherent institutions, clear negotiating objectives, and the political capacity to hold partners to agreed terms can use the current competition to attract capital, technology, and infrastructure investment on favourable terms. Countries without those attributes — which includes several Horn states — risk being played off against each other or finding that the revenue from their resources flows outward rather than accumulating domestically.

The Peacekeeping Gap

The deterioration of the multilateral security architecture is a specific and serious problem for a region that has depended on international peacekeeping capacity to manage some of its most dangerous conflicts. The UN Security Council's ability to agree on anything of substance has become a near-fiction. The African Peace and Security Architecture, which was always underfunded relative to its mandate, faces deeper cuts. The humanitarian agencies that tend to the consequences of conflicts that politics cannot resolve — UNHCR, WFP, OCHA — have been operating at reduced budgets precisely as the number and scale of emergencies they are asked to manage has grown.

The Horn bears a disproportionate share of these consequences. Sudan's civil war — the world's largest displacement crisis — has generated over eleven million displaced people. The international response has been inadequate not because of a shortage of concern but because the funding mechanisms and the political will to deploy them have both eroded. Somalia's trajectory toward stability depends on a security transition from ATMIS that assumes external financial and logistical support that is no longer guaranteed. South Sudan's precarious peace requires sustained international engagement that is competing with more strategically prominent crises for attention and resources.

What is perhaps most troubling about this gap is that it falls heaviest on the states least able to fill it. Countries already under severe fiscal strain — Ethiopia managing a post-war reconstruction burden, Kenya absorbing refugees from multiple directions, Sudan itself the epicentre of the largest crisis — are increasingly expected to fund peace operations in their neighbourhood and absorb the displaced populations that those operations fail to protect. These are resources that should be generating domestic returns, not underwriting the failure of a multilateral system that wealthier states have allowed to atrophy.

The Ethiopian Adaptation and Its Broader Lesson

Ethiopia's experience over the past decade offers something more useful than a simple success story: it offers an example of adaptation under sustained pressure. The Ethiopian model from the 2000s — state-led industrialisation through manufacturing zones, infrastructure investment, and an export-oriented growth strategy designed to replicate the Asian Tigers — ran into compounding shocks: the Tigray war, currency crisis, inflation, and the changed global economic environment described above. The model required significant revision.

What has emerged in its place is not a clean new template but a more diversified and domestically grounded approach. Ethiopia has maintained its growth trajectory by shifting the emphasis toward renewable energy — it now exports hydropower and is positioning the Grand Ethiopian Renaissance Dam as a regional asset rather than purely a domestic one — expanding agricultural productivity, and mobilising domestic resources more intensively. The macro-level result, sustained growth through multiple severe shocks, is real. The institutional and social costs of getting there — the war, the currency liberalisation and its inflationary consequences, the debt management challenges — are also real and should not be elided.

The lesson for other Horn states is not to copy Ethiopia's specific policy choices, which reflect Ethiopia's specific endowments, political structures, and historical moment. The lesson is about the attitude toward adaptation itself. In an environment where external conditions are volatile and the development consensus keeps shifting, the governments most likely to sustain progress are those that maintain clear long-term objectives while remaining genuinely willing to revise the means of achieving them — not governments that either rigidly follow a model that has stopped working or opportunistically abandon strategy altogether in favour of purely transactional relationships with whoever is offering the most attractive short-term deal.

What African Unity Can and Cannot Do

The argument for African solidarity in navigating this environment is not sentimental. It is structural. Individual Horn states — even Ethiopia, the region's most populous — are small relative to the powers competing for influence. Their negotiating leverage in bilateral relationships is limited. Their ability to set terms for resource extraction or infrastructure investment is constrained by the credible threat that a partner refused here will simply move to a neighbour who will say yes.

The African Continental Free Trade Area offers a partial response to this problem. A genuinely integrated African market — with the population and purchasing power that implies — changes the terms on which external investors and partners engage with the continent. It shifts negotiation from bilateral relationships in which the power asymmetry is stark to multilateral frameworks in which African states can at least coordinate positions and present more unified conditions. The AfCFTA is not close to delivering that potential yet. The infrastructure that would make intra-African trade cost-competitive with imports — road and rail connections, energy capacity, digital infrastructure — requires investment that none of the member states can provide individually and that the international partners who might fund it have not prioritised.

But the more immediate case for intra-African coordination is not economic integration but strategic coherence. Horn states that coordinate their positions toward external powers — on port access, on peacekeeping financing, on terms for mineral development — can resist individually unfavourable deals more effectively than those negotiating alone. The record of such coordination in the Horn is not encouraging: competitive dynamics between Ethiopia, Kenya, and Somalia over ports and security partnerships have repeatedly allowed external actors to exploit the divisions. That pattern is not inevitable. It is a choice, and it is one that the states of the region are in a position to revise.

The Choices Ahead

The fracturing world order is not an event that has happened and is now complete. It is an ongoing process, and its final shape is not yet determined. For the Horn of Africa, the conditions of the next five to ten years — which external partnerships prove durable, which development models generate sustainable growth, which security arrangements hold — will be shaped significantly by choices that Horn governments make now, not by forces entirely beyond their control.

The governments best positioned to navigate the transition will be those that enter it with a clear understanding of what they actually need — capital, technology, security guarantees, market access — as distinct from what partners are offering; that maintain strategic patience rather than accepting the first term sheets that arrive; and that invest in the institutional capacity to negotiate, implement, and enforce complex agreements. The governments most likely to emerge from the transition in worse shape are those that allow the urgency of immediate fiscal pressures to crowd out the longer-term thinking that the moment demands.

The familiar model that drove Asian prosperity is gone. The new development model is not clear. But there is hope for those who approach the new reality with agility and pragmatism — and with a clear sense of what they are trying to achieve.

That clarity is the prerequisite. Africa's leverage in a fractured world is real — in its minerals, its maritime geography, its demographic trajectory, and the choices it now has among competing partners. Whether that leverage translates into durable benefit or dissolves into a new round of external dependency depends on whether the region's governments can act, individually and collectively, with the discipline and foresight that the moment requires. The fracture in the world order has opened a window. It will not stay open indefinitely.