Prolonged conflicts in the Middle East (particularly involving the Gulf) are disrupting trade routes like the Red Sea, increasing shipping and insurance costs, and reducing Gulf investment in the Horn of Africa, affecting ports, infrastructure, agriculture, and energy projects.

Remittances and banking ties between the regions are under pressure: Gulf economic uncertainty could reduce money sent home by Horn workers, while Horn banks face higher costs and tighter credit through correspondent relationships with Gulf institutions.

The article emphasizes that peace is an economic asset: Both regions would benefit from stability and cooperation, as Gulf banks show resilience but cannot fully escape the ripple effects of war, and the Horn needs predictable investment and trade for growth.

War is often described as expensive, but that hardly captures the reality. It drains economies, shakes financial markets, and leaves ordinary people paying the highest price. As the Roman statesman Cicero wisely observed, “The sinews of war are infinite money.” Today, nowhere is this more evident than in the relationship between the Gulf states and the Horn of Africa States region. While Gulf banks continue to demonstrate remarkable resilience, the ripple effects of prolonged conflict are felt far beyond the battlefield, reaching ports, businesses, and households across the Horn of Africa States.

The Gulf Cooperation Council (GCC) countries, including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, and Oman, have built strong banking systems supported by oil wealth, sovereign investment funds, and effective financial........

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