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NEW DELHI: With the world’s attention focused on conflicts such as the Gaza war, it’s important to pay attention to the brewing tensions in the Horn of Africa. Recent events have escalated the instability in this region, notably with Somalia unexpectedly revoking a pact with Ethiopia on January 6, just five days after signing it. This dispute primarily centres on a contentious agreement between Ethiopia and Somaliland, the breakaway territory of Somalia.
During an exclusive interview with The New Indian, Zemedeneh Negatu, Global Chairman of Fairfax Africa Fund, delved into the geopolitical ramifications of the port deal between Ethiopia and Somaliland. He explored its possible impact on regional stability, whether it serves as a diversion from internal conflicts, the consequences of the African Union’s withdrawal from Somalia, and the involvement of Saudi Arabia and the UAE in influencing the resolution of the conflict.
Ethiopia has signed a deal granting it access to the Somaliland port in the Gulf of Aden, with the goal of establishing a marine force base to enhance political, economic, and security ties. Somaliland’s strategic location along the Red Sea, a geopolitically vital area for global powers like the US, China, and Russia, has heightened the significance of this agreement.
However, this port agreement is seen by some experts as a manoeuvre by the Ethiopian government to shift focus away from its economic challenges and internal turmoil stemming from the 2020-2022 Tigray War, which resulted in significant casualties, displacement of hundreds of thousands, and a severe humanitarian crisis, including widespread famine.
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Deliberating on the relationship between this agreement and Ethiopia’s domestic challenges, Negatu said, “So, understanding Ethiopia’s need for port requires delving into its recent history. Up until 1993, Ethiopia had two ports, but with Eritrea’s independence, these ports were lost. You have to understand, Ethiopians of all stripes agree that the country needs a port. This isn’t to divert attention; it’s been a long-standing discussion. Ethiopia spends $1.5 billion annually on Djibouti’s ports, but it’s insufficient. Therefore, the recent agreement with Somaliland is part of Ethiopia’s long-term strategy and you can expect similar arrangements with other neighbouring countries in the future.”
While Ethiopia views the deal as essential for Red Sea access, neighbouring countries, including Egypt and Eritrea, express concerns about potential naval access. This dispute could escalate tensions involving Ethiopia, Somaliland, Egypt, and Sudan, particularly concerning the Grand Ethiopian Renaissance Dam on the Blue Nile.
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Discussing the geopolitical implications of the port agreement between Ethiopia and Somaliland, Negatu remarked, “The Red Sea and the Suez Canal play a vital role in global trade, with 10 to 15 per cent of trade passing through this route. Recent conflicts, like those involving the Houthis, have led to ship diversions, causing delays and increased costs. A lot of ships have been diverted to the southern part of Africa via South Africa, the Cape of Good Hope. It’s adding 10 days each way for cargo from Asia, for example, from India, all the way from other parts of Asia and China. Therefore, what used to take 10 days will now take 20 extra days round trip!
“So, this part of the world is extremely important because on one side of the Red Sea are African countries – Egypt to Sudan, Eritrea, Ethiopia, Somalia, Djibouti, and others, while on the other side is the world’s largest oil exporter (Saudi Arabia). Now, the memorandum of understanding (MoU) between Ethiopia and Somaliland, signed on January 1, allows Ethiopia 20 kilometres of sea access for 50 years.
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“Somaliland, which has been operating semi-autonomously for the past three decades, has forged agreements independently, like the recent deal with Ethiopia, despite the ongoing dispute with Somalia. Although not internationally recognised, many nations conduct business with Somaliland as if it were independent. This arrangement mirrors historical precedents like the US’ management of the Panama Canal.”
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However, highlighting the benefits of the agreement, Negatu explained that it not only ensures Ethiopia’s crucial sea access but also promises economic advantages for the entire region. With Ethiopia boasting the third-largest economy in Sub-Saharan Africa and being the second most populous country on the continent, the potential for regional economic growth is substantial. Considering forecasts projecting Ethiopia among the world’s largest economies in the coming decades, such agreements hold immense promise for African collaboration and prosperity.
“They’re (experts) looking at a $6.2 trillion GDP. So, Africans working, collaborating, and rising together is the upside,” he remarked.
Egypt and Eritrea are apprehensive about Ethiopia’s naval activity in the Red Sea and Gulf of Aden. The nations are engaged in a Nile water dispute with Ethiopia and are wary of potential rivalry in the Red Sea. Egyptian President Abdel Fattah el-Sisi has declared solidarity with Somalia and criticised Ethiopia’s deal with Somaliland to secure sea access and set up a naval base.
Debating how the dispute over naval access might impact regional stability and relationships, Negatu said, “Right now, you’ve got the US Navy, the big name in naval power, and the UK Navy, also a major player, fighting the Houthis. They might not be big in comparison, but they’re still challenging these superpowers. So, when we are talking about naval forces, we have to keep things in perspective.
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“There’s been some talk about Ethiopia setting up a naval base, something they have been considering for a while now, dating back to around 2018-2019. It makes sense, really. If you’re going to have a merchant fleet, having your own Navy isn’t a bad idea. I mean, look at India, China, and the US—they all have theirs.
“Having a naval presence can help with neighbourhood security, protecting those important sea lanes we rely on. It’s just a natural step, you know? While I’m not exactly a naval expert, it’s clear that having stable countries in the area with strong navies acts as a kind of barrier against potential threats. And with all those ships getting redirected south, even with the US Navy around, it shows just how important it is for everyone to pitch in. These measures serve as vital safeguards, ensuring security and stability for the entire region.”
Ethiopia’s pursuit of access to the Red Sea goes beyond geopolitical strategies; it’s deeply tied to its fundamental security concerns. Addis Ababa’s commitment to recognising Somaliland as an independent entity faces resistance, particularly from Somalis who assert territorial claims over Somaliland. With the African Union planning to withdraw its peacekeeping forces from Somalia by the end of 2024, apprehensions rise about potential escalations in attacks by groups like al-Shabaab, further complicating an already fragile scenario.
Highlighting the risks and challenges, especially regarding security and potential attacks by groups like al-Shabaab, the Fairfax Africa Chairman divulged, “The stability of Somalia is important for the whole region. Somali political issues or the problems they have with al-Shabaab, I think, needs to be properly addressed and resolved because it impacts everybody in the neighbourhood. If you don’t have stability in Somalia, you can’t have stability in the rest of the world, whether it’s in Djibouti or Ethiopia or everywhere.”
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He further explained that the withdrawal of the African Union from Somalia may prompt the establishment of alternative security arrangements or buffer zones to address ongoing insurgencies, including those led by Al-Shabaab. There is anticipation that the involvement of other international actors, such as the US and European nations with bases nearby, may contribute to resolving the situation.
As per several geopolitical experts, Saudi Arabia’s stake in maintaining stability in the Red Sea extends beyond economic concerns, with plans to develop coastal resorts aimed at bolstering its emerging tourism sector. In fact, some reports suggest that the UAE, with increasing economic clout in the region, played a role in brokering the port agreement. Saudi Arabia also seeks to counter the significant influence wielded by its regional rival, the UAE, in the affairs of the area.
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Highlighting how these nations’ interests influence the resolution of the conflict, he stated, “Much like India in South Asia or the US in the Americas, Saudi Arabia and the UAE are deeply invested in the stability and prosperity of the Horn of Africa region due to their geographical proximity and strategic interests. They actively engage with countries in the region by providing financial support and promoting economic activities to achieve stability.
“For them, stability is paramount, as seen by their significant contributions to Egypt during its times of financial turmoil. These countries also prioritise food security by sourcing food from nearby regions rather than distant locations. So, their involvement is a positive thing as it contributes to the constructive development of the neighbourhood and fosters good relations with their neighbours.”
