On January 1, the self-proclaimed Republic of Somaliland and landlocked Ethiopia signed a controversial memorandum of understanding (MoU) granting the latter port access to the Red Sea. In exchange for a 50-year lease of coastline near the strategic port of Berbera for commercial and naval uses, Addis Ababa agreed to consider recognizing Somaliland as a state—it would become the first country to do so.
The MoU has sparked backlash from neighboring states—particularly Somalia, Eritrea and Egypt—as Mogadishu considers Somaliland part of its sovereign territory. Last week, Egypt delivered another major shipment of weapons to Somalia, prompting fears in Ethiopia that the arms “would further exacerbate the fragile security [of the region].” With ten full-blown conflicts between Ethiopia and Somalia since the latter’s independence in 1960, the latest uptick in tensions now threatens the entire Horn of Africa’s stability, as well as substantial economic interests in the region from Middle Eastern countries ranging from the Gulf Cooperation Council (GCC) to Türkiye and Iran.
In this Council Views, experts from the Middle East Council on Global Affairs unpack various aspects of what is at stake in the Ethiopia-Somalia dispute, and what the port deal means for the Horn and MENA regions.
Somalia Rejects Ethiopia’s Coastal Aspirations
The MoU signed by Ethiopia and the breakaway region of Somaliland in January alarmed the neighboring coastal states. Whether Ethiopian Prime Minister Abiy Ahmed was using the deal as a deflection of domestic pressures or as a bargaining chip to obtain concessions from Somalia, it was a bombshell. The MoU promises Somaliland eventual Ethiopian recognition as a state and a stake in Ethiopia’s national airline in exchange of a 12-mile (20–kilometer) stretch of coastline along the Gulf of Aden for a naval base.
Somalia has not only rejected the validity of the MoU but also condemned Ethiopia’s hostile intentions. Ethiopia’s longstanding aspiration to break free of its landlocked borders precipitated past territorial and religious wars among the peoples in the region, including decades of meddling in Somalia’s internal affairs. This led Somali leaders to shore up defense pacts with Türkiye and Egypt and increase cooperation with Eritrea.
In response to the latest provocation, Somalia expelled Ethiopia’s ambassador and called for the closure of the consulates in Hargeisa and Garowe. It further threatened to not renew the participation of Ethiopian troops in the African peacekeeping forces in Somalia. The broader international community, including the United States, the United Nations, the African Union and the European Union, called for respect for international law, Somali sovereignty and the territorial integrity of all member states. Addis Ababa’s hostile actions will have significant political, security and economic implications for the Red Sea region and the broader East Africa.
Ethiopia Risks Regional War Over Port Access
Ethiopia perceives access to a seaport as vital for its development and global position. In 2018, Eritrea allowed Ethiopia to use the ports of Assab and Massawa. Since then, however, the two countries have drifted apart as Ethiopia’s ambitions have grown beyond port access.
Somaliland’s more recent willingness to lease a piece of land to Ethiopia for port facilities and a naval base in a quid pro quo for possible recognition as an independent state has shifted tensions between Ethiopia and Eritrea, albeit temporarily. If implemented, the MoU between Somaliland and Ethiopia signed in January 2024 could allow the latter to access a port in the Gulf of Aden.
However, the focus of Ethiopia is power projection in the Red Sea. Ethiopian Prime Minister Abiy Ahmed’s speech to parliament in October 2023 argued that his country has “natural rights” to access the Red Sea. There is frenzied debate regarding Ethiopia’s natural, historical and legal ownership of the Eritrean port of Assab; many claim it was given to Eritrea illegally and by mistake and should be returned.
Domestic factors are playing a decisive role in Abiy’s claim to a port. Multiple problems that he failed to address—including ethnic wars, an economic crisis, gridlock caused by ethno-federalism and constitutional reform—eroded his popularity and legitimacy. Therefore, he is trying to bolster his domestic support by stoking nationalist sentiment over maritime access.
Abiy’s move has effectively destroyed the agreement between Somalia, Ethiopia and Eritrea signed in 2018. Abiy was awarded Nobel Peace Prize for his rapprochement with Eritrea in the lead-up to the tripartite agreement. The high hopes generated when he came to power are now gone and the shadow of war is hanging over the Horn of Africa.
Egypt and Somalia: The Enemy of My Enemy Is My Friend?
Amid the growing tensions between Somalia and Ethiopia, Egypt delivered military aid to Somalia last month for the first time in more than four decades. The assistance, along with deepening Egyptian-Somali ties, are intricately linked to Cairo’s strategic concerns regarding the Grand Ethiopian Renaissance Dam (GERD) and its bitter, years-long dispute with Ethiopia.
While the recent backing of Somalia may further antagonize Addis Ababa, it highlights Cairo’s frustrations with the current stalemate over the negotiations on water allocation and the GERD. Egypt, which relies heavily on the Nile for its water supply, perceives the Ethiopian GERD as a threat to its water security. Ethiopia’s decision to construct and fill the dam without a comprehensive agreement in place with downstream countries like Egypt has led to heightened tensions. Talks broke down last December, with Egypt’s representative blaming their lack of success on Ethiopia’s “persistent refusal” to accept any compromise. For their part, the Ethiopians accused Egypt of putting up “roadblocks” in the discussions that prevented any consensus.
In this context, Egypt’s growing military and economic relationship with Somalia should be viewed as part of its broader strategy to counterbalance Ethiopia’s influence in the Horn of Africa and extend its own reach into the region. By deepening its engagement with Somalia, Egypt is hoping to consolidate an ally and expand its influence in the Red Sea and the Bab el-Mandeb Strait—a vital chokepoint in global maritime trade routes.
While Cairo’s military and economic backing of Mogadishu is mutually beneficial, it remains to be seen how durable it will be if the dispute over the Somaliland port deal erupts into a direct confrontation.
Türkiye’s Multiple Roles in the Horn of Africa
Türkiye is highly active in the Horn of Africa, where it is involved in everything from maritime and defense engagements to oil and gas exploration, humanitarian assistance and post-conflict stabilization. In Somalia, Türkiye has its largest overseas military base, while in Ethiopia it is the second-largest investor in the country.
It has been unsurprising then to see Ankara heavily involved in regional diplomacy, including in ongoing talks between Somalia and Ethiopia dubbed the “Ankara process.” Despite its influence, Turkish mediation has not produced a breakthrough in the current crisis. A third round of talks was supposed to take place in Ankara on September 17, 2024, but has been postponed with no new dates set. Nonetheless, Turkish Foreign Minister Hakan Fidan recently sounded hopeful about the prospect of a diplomatic resolution and said that Türkiye will engage with both sides separately to bridge the gaps between them.
For Somalia, the main issue is the protection of its sovereignty, and for Ethiopia, as a landlocked country, its access to the sea. At a time when the security dynamics between the Middle East, the Gulf and the Horn of Africa overlap, irrespective of result of the Türkiye-mediated Ethiopian-Somalian talks, Ankara’s diplomatic, geopolitical and economic footprint in the Horn is set to increase.
The UAE’s Possible Dilemma in the Horn
Ethiopia’s MoU with Somaliland threatens the already fragile peace and security in the Horn of Africa. The fact that each party to the deal contests its specifics should not be taken lightly as it could lead to unintended consequences. While tensions are currently limited to rhetoric and posturing, any military escalation will likely drag in other countries directly and indirectly.
This could include countries outside the Horn of Africa, such as Qatar, Saudi Arabia, Türkiye and the UAE, due to their growing economic, political and security engagement with the region. While these countries seem to be backing Somalia’s position—that the deal constitutes infringement on its sovereignty—they will likely have to hedge and balance their actions moving forward.
That is especially true of the UAE. For over a decade, the Emiratis have pursued an activist and somewhat disruptive foreign policy that mixes economic, political and security tools to gain leverage and advance national interests to varying degrees with actors in the region and others elsewhere. The UAE has used its powerful DP World and its subsidiaries to invest in and operate port terminals along the critical waterways of the Bab el-Mandab Strait and Gulf of Aden. This includes the Berbera port in Somaliland and the Bossaso port in Puntland (both autonomous regions in Somalia), as well as the Assab military base in Eritrea and, until 2018, the Doraleh terminal in Djibouti.
If the Ethiopia-Somaliland deal proceeds, how would this impact the UAE, as the majority owner and operator of the Berbera port? Could the UAE seek to use its warm relations with Ethiopia to build and operate the new facility—possibly stationing some of its own naval units there? In the case of a military escalation between any of the parties, the UAE will have a difficult choice: take sides overtly or covertly, or use its leverage to bring the region back from the brink.
Port of Berbera: A New Epicenter of Tensions and Conflicts in the Horn of Africa
Somaliland leasing the Port of Berbera to Ethiopia presents a multifaceted security threat to the region. While this agreement may be a strategic step for Ethiopia in its quest to enhance its maritime influence, it simultaneously raises serious security and political concerns. The primary challenges lie in the potential escalation of existing regional tensions.
Firstly, this development could exacerbate disputes between the Somali central government and the breakaway Somaliland region, with the potential for spillover. Secondly, Ethiopia’s presence on the Red Sea coast could alarm neighboring countries that might consider it a challenge to their strategic sphere of influence.
Regional powers may exploit this development to enhance their influence in the area by supporting local militias and forming new military alliances, thereby exacerbating armed conflicts and transforming the region into a new battleground, which threatens maritime and navigational security. Armed groups in the region, such as the Yemen-based Houthis and Al-Shabaab in Somalia, may take advantage of the crisis to step up their activities and facilitate arms smuggling operations. Al-Shabaab is already trying to capitalize on Somali public anger to increase its recruitment.
Moreover, the threat of Somali piracy has resurfaced with the redeployment of U.S. naval forces from the Indian Ocean and Red Sea and could develop a nationalist component around a “defense of Somali lands” narrative, thereby complicating the maritime security situation.
Despite Ethiopian claims that a military base near the port could contribute to combating piracy and terrorism, the experiences of other military bases in the region have not proven effective in this regard. In fact, this presence may exacerbate tensions with local and regional armed groups. Ultimately, this development could represent a significant geopolitical shift in the Red Sea region, with potentially wide-ranging implications for regional security and global trade. Ultimately, the repercussions will depend on how the development is managed by all concerned parties and their ability to balance conflicting interests and avoid escalation.
Djibouti Seeks Greater Leverage Over Ethiopia
The 2018 peace agreement between Ethiopia and Eritrea granted Addis Ababa direct access to the ports of Massawa and Assab. However, this has since failed to materialize and is not politically viable in the short-term, leaving the world’s most populous landlocked nation desperate for an alternative.
The Berbera lease would be a significant breakthrough for Ethiopia, as Djibouti currently has a stranglehold on its trade. An estimated 95% of Ethiopia’s trade goes through the port of Djibouti, at the cost of at least $1.5 billion in fees annually. Ostensibly to ease regional tensions in the wake of the MoU signing, Djibouti has offered for Addis Ababa to jointly operate the northern port of Tadjoura. However, Ethiopia is likely reluctant to cede further economic leverage to Djibouti rather than gaining direct port access under a deal that includes naval uses.
A fairer offer from Djibouti that could meaningfully de-escalate tensions would necessarily involve economic concessions to reduce the fees and facilitate more transparent, legal trade. This in turn could help reduce the level of illicit trade between Ethiopia and Somaliland along the Berbera trading corridor. Other options for Addis Ababa to consider in the short-term include limiting its demands for port access to commercial purposes, channeling negotiations through the private sector, and focusing on business-to-business cooperation.
Gulf Influence Is Key to Easing Horn Tensions
Many Gulf states, as well as Türkiye and Iran, are expanding their footprints in the Horn of Africa region. At the core of this engagement are investments into agribusiness, energy, critical minerals and connectivity infrastructure—especially ports. The Horn’s proximity to the Red Sea situates it at the center of global trade routes, and the Bab el-Mandeb strait remains a strategic chokepoint while ambitious alternative corridors, such as the Washington-backed India-Middle East-Europe Economic Corridor (IMEC) and the Development Road Project, face significant financing and implementation hurdles.
These economic interests have fueled increasing competition amongst these states in the security sphere, rendering the Horn a proxy battlefield for MENA and global powers. In this volatile context—and as Israel’s nearly year-long war on Gaza continues to fuel Red Sea instability—the full depth of Gulf involvement in the Horn and its geopolitical implications remains an open, but crucial, question.
In any case, Gulf countries are well-positioned to profit from greater stability in the Horn and have the leverage to de-escalate tensions and broker and guarantee alternative deals to address Ethiopia’s and its neighbors’ concerns. Achieving this, however, will necessitate promoting cooperation within the Horn, rather than exploiting divisions for short-term political and economic advantage—a strategy whose catastrophic impacts are still unfolding in Sudan, Yemen and elsewhere.