Ethiopia’s Port Diversification Strategy Reshapes Horn of Africa Dynamics
A long-standing economic arrangement in the Horn of Africa is unraveling as Ethiopia actively pursues alternative maritime access, challenging Djibouti’s decades-long monopoly and triggering a broader regional realignment.
For over 20 years, Djibouti served as the near-exclusive maritime gateway for landlocked Ethiopia, handling more than 95% of its seaborne trade by early 2024. This dependency formed the bedrock of Djibouti’s rentier economy, funding state operations and patronage networks under President Ismaïl Omar Guelleh. However, this model faces strain as Ethiopia seeks to diversify its port access to enhance economic sovereignty and resilience.
The January 2024 memorandum of understanding between Ethiopia and Somaliland, targeting access through the port of Berbera, marks a pivotal shift. Backed by UAE-based DP World and the Berbera Corridor development, the agreement directly challenges Djibouti’s dominant position. Ethiopian officials frame the move as a logistical and economic necessity, while analysts note it strikes at the core of a system built on monopoly rather than competition.
Djibouti’s response has been political. Tensions have escalated along Somaliland’s borders, and a tripartite alliance comprising Egypt, Eritrea, and Somalia has deepened, including military deployments in Mogadishu. This alignment is partly fueled by regional rivalries, notably a growing Saudi-UAE divide. Saudi Arabia, seeking to counter Emirati influence in Berbera, has reportedly aligned with the tripartite pact, positioning Djibouti’s leadership as a local partner in this contest.
Simultaneously, Somaliland is leveraging the Ethiopia deal to pursue de facto statehood through economic integration. President Abdirahman Mohamed Abdullahi promotes an “Irro Doctrine” of “Sovereignty through Trade,” using the Berbera Port Free Trade Zone to attract international investment and bolster its international standing.
Domestically, Djibouti faces mounting pressures. External debt nears 70% of GDP, according to the IMF, and constitutional changes removed presidential term limits ahead of 2026 elections. With high youth unemployment and restricted political space, observers warn the government may resort to external distraction to manage internal discontent, including alleged support for militias opposed to Somaliland.
The structural shift has wide implications. The era of a single gatekeeper controlling regional trade is ending. Ethiopia’s push for diversified access, Somaliland’s bid for recognition through commercial partnerships, and the intersecting geopolitical interests of regional and extra-regional powers are redrawing the Horn of Africa’s economic and strategic map. For international actors, the transition presents both opportunities in emerging trade corridors and risks of heightened instability as the old order dissolves.
