Ethiopia has cemented an important agreement that will provide it with improved access to seaports, after Prime Minister Abiy Ahmed and Somaliland President Muse Bihe Abdi signed a Memorandum of Understanding in Addis Ababa.
As a part of the agreement, Ethiopia set to officially recognize Somaliland as a republic. In exchange, Ethiopia has secured a 20 km coastal land lease from Somaliland. This arrangement will provide Ethiopia access to the vital Bab-el-Mandeb Strait region, allowing both commercial port access in Berbera and construction of a naval base.
A main objective of the MoU is to assist Ethiopia in securing access to seaports as the landlocked country works to diversify its import and export routes. Ethiopia believes this will boost its access to maritime trade networks, which are crucial for its development goals.
Ethiopia has long struggled with the heavy economic burden of being landlocked. According to government officials, Ethiopia currently spends over $1.6 billion annually on port fees to use the facilities in neighboring Djibouti - which handles more than 90% of Ethiopia's trade flows.
As Prime Minister Abiy Ahmed highlighted in an address to lawmakers last October, direct access to sea trade routes could potentially boost Ethiopia's economic growth by 25-30% based on a UN study.
In a televised session with parliamentarians, Abiy said it was paradoxical for Ethiopia not to actively pursue discussions on gaining Red Sea access, while other countries freely negotiate terms for shared water resources like the Grand Ethiopian Renaissance Dam (GERD).
The landmark deal establishes a framework for multi-sector cooperation across political, economic, security and diplomatic relations between Ethiopia and Somaliland. It also aims to strengthen security cooperation and promote regional stability in the Horn of Africa.
"The MoU reaffirms the principled position of the Ethiopian Government to advance mutual interests through cooperation on the basis of reciprocity," reads a statement from the Prime Minister's Office.
Following calls for discussion on Ethiopia’s direct access to the sea rights, neighboring country officials including from Somalia and Djibouti responded saying access was non-negotiable and calling the calls a threat to sovereignty.
