Geopolitical Ramifications of Ethiopia’s Port Deal with Somaliland

In 2024, Ethiopia signed a deal with Somaliland’s President Muse Bihi Abdi, granting the landlocked country direct commercial and military access to the Red Sea.  Somaliland agreed to lease a military port in the Gulf of Aden and 20 kilometres of Somaliland’s coastline to Ethiopia for 50 years, in return for Somaliland’s formal recognition as a sovereign state and a portion of Ethiopian Airlines’ shares.

This makes Ethiopia the first African country to recognize Somaliland as an independent state and the second in the world after Taiwan. Ethiopia’s quest for Red Sea access has been a diplomatic success, fulfilling its long-standing need for immediate sea access.

Djibouti, a port on the Red Sea, has served as Ethiopia’s most important trade route since Eritrea’s independence. However, Ethiopia faces significant port fees from Djibouti, prompting the country to explore other alternatives in neighboring countries.

Ethiopia has been eyeing Berbera and Port Sudneighbouring05, but faced challenges such as logistical problems and potential conflict with Somalia. In 2018, Ethiopia acquired a 19-percent stake in Berbera Port under an agreement with Emirates logistics management company, DP World. However, Ethiopia failed to meet its obligations and ultimately had to give up its share.

In 2023, Ethiopia’s Prime Minister Abiy Ahmed declared that his landlocked country must break the “geographic prison” of approximately 120 million Ethiopians and claim access to Eritrea’s Red Sea ports. This agreement raised concerns about the possibility of another Ethiopia-Eritrea War in the short run. However, it is not a catalyst for peace in the region and has further increased uncertainty.

Somalia deemed this as a significant breach of its sovereignty and promptly recalled its ambassador to Ethiopia. On 6 January, Somali President Hassan Sheikh Mohamud signed a bill nullifying the agreement, and the Somalian President also requested Ethiopia and Somaliland to withdraw the agreement. Neither Somaliland nor Ethiopia is prepared to relinquish this historic pact.

Somaliland, located in the northwestern part of Somalia, gained de facto independence in 1991 after a bloody secessionist struggle. Despite being the only East African country with free political rights and civil liberties, Somaliland is not officially recognized by any country.

The region gained international attention when Taiwan announced its formal ties with Somaliland in 2020. Somaliland is an important strategic asset for Ethiopia, with an 850-kilometer coastline on the Gulf of Aden, free from piracy proble850-kilometreing the entrance to the Bab al-Mandeb, A chokepoint is a crucial point in global trade, used by one-third of all transactions.

Ethiopia and Somaliland have agreed to establish a military base and commercial maritime zone in the Red Sea, in exchange for military and intelligence information. The deal could increase security in the region due to the strategic importance of the Bab al-Mandeb Strait.

The United Arab Emirates (UAE), a major player in the region, has friendly ties to both Ethiopia and Somaliland. In 2016, Somaliland signed a 30-year concession agreement with Dubai-based port operator, DP World, to expand and modernize Berbera port. The UAE is also a major funder for the Berbera Corridor, connecting Somaliland to the Ethiopian hinterland.

However, the agreement is a geopolitical minefield, causing dissatisfaction among stakeholders. Eritrea, Djibouti, Saudi Arabia, and Egypt may be concerned about the Ethiopian fleet near their coast, while the UAE may gain control over the Red Sea.

China has reportedly imposed sanctions on Somaliland due to its alleged involvement in the Las Anod region, a region known for its close ties to Taiwan. The move is seen as China’s first proxy war in Africa, with Xue Bing appointed as the Special Envoy to the Horn of Africa. The deal also threatens diplomatic relations between Ethiopia and Somalia, two countries with a history of hostility and military confrontation. Somalia has appealed to the UNSC and the international community for intervention, despite the potential military intervention being unlikely at this time.

The US, UK, EU, OIC, and Arab League have all urged Ethiopia to withdraw from an agreement involving the Red Sea, despite the country’s 20-year border war with Eritrea. The agreement has allowed Ethiopia to secure access to the sea and diversify its seaports, despite the backlash.

Despite the backlash, Ethiopia and Somaliland remain determined to stick to the agreement. The declaration has set the framework for this year’s interstate relations in the Horn of Africa, as the country’s Red Sea conundrum dates back to its 20-year border war with Eritrea.

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