The Inter-governmental Authority for Development (IGAD) regional economic community for the countries of the Horn of Africa (HoA) was hit by the COVID-19 pandemic in addition to the region’s recent and prevalent challenges of shocks such as conflict, recurrent drought/floods, environmental degradation and locust invasion. Thus, while many of the countries have registered strong and robust economic growth over the last decade or so and improvements in the Sustainable Development Goals (SDGs), the region suffered contraction in GDP and reversal of progress since the Pandemic. Access to affordable financial services has been widely acknowledged among policy makers and development partners alike as critical for ‘poverty reduction and economic growth as well as to increase opportunities and resilience for the poor, especially women and other vulnerable groups. Digital finance is increasingly being viewed as an important tool to achieve financial inclusion. A vast majority of people have been effectively excluded from financial services due to various factors hampering or blocking their access and the need to address such exclusion has long been recognized. But, progress has been slow. Advances in digital technology have, however, created renewed hope; such technologies offer those excluded affordable ways to save, make payments, get small loans, send remittances or buy insurance. Innovation and advances in technology such as mobile phones, the internet, and other digital technology are making it possible to avail low-cost and convenient financial services to all those who need and have access to them. This report thus picked on the theme of digital technology for financial inclusion in the HoA for some detailed investigation. The report also provides an overview of the macroeconomic performances and prospects amid the COVID-19 pandemic in the HoA countries. The thematic part of the report looks at the strategies, institutional frameworks and initiatives being pursued to advance financial inclusion and the status, challenges and prospects of digital financial inclusion in four IGAD countries, namely Ethiopia, Kenya, Somalia and South Sudan.
