What’s The Best Way For Ethiopia To Diversify From Its Dependence On The Port Of Djibouti?

The best-case scenario would be if BRICS – whether as a whole, just its RIC core, or those three plus the group’s new Emirati member – helps resolve whatever disputes are impeding the implementation of summer 2018’s Eritrean-Ethiopian port deal.

The Ethiopian News Agency recently reported that Prime Minister Abiy Ahmed told members of parliament in a televised program that their country’s “access to the sea is a matter of existence”. This latest statement comes several months after he reportedly said earlier this summer that “Ethiopia will secure direct access to a port – peacefully or, if necessary, by force.” Speculation has therefore swirled around the Horn of Africa (HoA) region about what exactly Ethiopia plans to do in the coming future.

Some thought that PM Abiy’s words amounted to saber-rattling against neighboring Eritrea, with whom he initiated a game-changing rapprochement half a decade ago and which later won him the Nobel Peace Prize, but there are reasons to be skeptical of that interpretation. Certain forces are interested in dividing-and-ruling these fraternal nations, and there’s no indication that Ethiopia is preparing for war against Eritrea, let alone over this issue after they agreed in 2018 to resume their port use agreement.

While progress has been lackluster since then largely due to Ethiopia’s well-known domestic troubles, both countries’ objective national interests are served by implementing that geo-economic pact, which aims to turn the HoA into a leading trade hub in the emerging Multipolar World Order. Ethiopia’s recent inclusion in BRICS as well as its and Eritrea’s close relations with that group’s Russia-India-China (RIC) core raise hopes that this bloc can help revive their stalled talks that they’ll all benefit from if successful.

Therein lies the problem that neither party has officially recognized up until this point, however, namely that talks do indeed appear to have stalled this past year despite the end of the Northern Ethiopian conflict last November that some thought would have led to those two making tangible progress by now. It’s with this in mind that some interpreted PM Abiy’s words in the way that was earlier described with respect to saber-rattling against Eritrea, whose Ministry of Information responded to them as follows:

“Discourses – both actual and presumed - on water, access to the sea, and related topics floated in the recent times are numerous and excessive indeed. The affair has perplexed all concerned observers. In the event, the Government of Eritrea repeatedly reiterates that it will not, as ever, be drawn into such alleys and platforms. The [Government of Eritrea] further urges all concerned not to be provoked by these events.”

This was a mature reaction that sought to de-escalate the situation by discrediting speculation about an impending rupture of their relations over this issue, and it did so in a way that carefully avoided offending PM Abiy or Ethiopians and thus inadvertently fueling the flames of mutual suspicions. The signal being sent is that whatever problems have apparently crept into their talks and are responsible for no real progress being made over the past year should be resolved diplomatically behind closed doors.

It's irresponsible to speculate about what possibly lies at the heart of their likely disagreements, but nobody should doubt that it would be disadvantageous to both of their objective national interests if this spiraled out of control to the point of another military conflict. In the event that no breakthrough is achieved even if BRICS as a whole or some of its members try to mediate a compromise, then it would be best for both to move beyond this dispute and for Ethiopia to look elsewhere for access to the sea.

The reason why it’s prioritizing this in the first place despite already having such access via Djibouti is because the latter reportedly charges Ethiopia an estimated $2 billion a year in port fees, which is extremely onerous for this developing country and especially as it tries to recover after two years of war. Amidst these circumstances, China’s $4 billion Djibouti-Addis Ababa Railway (DAAR), which was planned to be the Belt & Road Initiative’s (BRI) flagship project in the HoA, will struggle to reach its full potential.   

Ethiopia also owes China $13.7 billion in debt, and although payments on this were suspended in August until July 2024, it still adds to that the overall financial pressure that’s been placed on this country. Taken together with the estimated $2 billion a year in port fees to Djibouti and recalling the economic devastation brought about by the latest war, it’s difficult for anyone to be optimistic about Ethiopia’s prospects unless one of the two aforesaid costs – port access or debt payments – is greatly lessened.

This financial context explains the urgency with which Ethiopia is seeking to diversify from its dependence on the Port of Djibouti since its policymakers already ruled out defaulting on their debt to China, hence why the only choice that remains is obtaining alternative and lower-cost access elsewhere. As was already explained, some problems have apparently afflicted Ethiopia’s talks with Eritrea to this end, so there’s now a need to consider other options if those half-decade-long plans can’t be revived.

Kenya might seem attractive to some, but after thinking more deeply about this possibility, that country quickly loses its luster. Not only was it perceived as sympathetic to the government’s opponents during the latest war, but its closest port of Lamu that’s part of the Lamu Port-South Sudan-Ethiopia (LAPSSET) corridor is in proximity to Somalia and thus vulnerable to related security threats. Although progress has recently been made on implementing their rail plans, this project therefore can’t be fully relied upon.

As for Somalia itself, that country still remains too unstable for Ethiopia to place any serious hopes in it functioning as a viable alternative to Djibouti, not to mention the lingering animosity among some Somalis for what they perceive to be Ethiopia’s patronizing attitude towards their country over the years. If pressed to choose between the two, then Kenya is obviously the better option, but there exists a third one that’s arguably better than both and that’s the breakaway Somali region of Somaliland.

This unrecognized but self-governing entity is universally considered part of Somalia, but that hasn’t prevented Ethiopia and its close Emirati partners from cultivating bilateral ties with Hargeisa independent of Mogadishu. The UAE also joined BRICS earlier this summer alongside Ethiopia, and those two have grown extremely close since PM Abiy entered office, so much so that its leader even awarded him and his Eritrean counterpart in summer 2018 for their peace deal that he helped mediate.

Of relevance, the UAE’s DP World took control of Somaliland’s Berbera Port in 2017. Earlier this year, they opened an economic zone and also finished a $366 million expansion project, both of which work to Ethiopia’s geo-economic benefit by facilitating its access to the sea. Addis Standard published a brief but insightful report about Berbera Port’s importance to their country earlier this month here that was authored by Somaliland’s Director-General for the Ministry of Trade and Tourism Abdirashid Ibrahim.

The Berbera Corridor that they’re working on implementing can peacefully resolve Ethiopia’s maritime dilemma in the absence of a breakthrough with Eritrea by representing a viable alternative to Djibouti that’s much more secure than Somalia proper and Kenya’s adjacent Lamu Port. The UAE has an interest in helping its strategic Ethiopian partners tap into their promising geo-economic potential so it’ll probably ensure that costs remain much lower than those that it’s presently paying to Djibouti.

For that to happen, then Somaliland must also agree to this deal as well in order to become Ethiopia’s reliable conduit to the sea, for which it might predictably request something significant in return. This could most realistically take the form of official recognition of its self-declared independence and/or a mutual defense pact for deterring Somalia from any military attempts to change the status quo. Either option would entail considerable political risks, however, and thus requires the appropriate will.

For example, Somalia could call upon the international community to condemn Ethiopia for meddling in its affairs, which might resonate with many in the West if Mogadishu compares Addis’ moves to Moscow’s in the run-up to the latter’s special operation and warns about a similar such regional conflict. Foreseeing this scenario and expecting that its Western partners would probably be receptive to it for political reasons, Ethiopia might therefore naturally be reluctant to strike such deals with Somaliland.

There’s also the chance that the West might turn a blind eye to this, but only if Ethiopia agrees to distance itself from the Sino-Russo Entente in exchange, though the UAE might object to that but it too could possibly be won over if the West leaves those two’s strategic partnership untouched. That said, there aren’t any grounds for speculating that any such agreement is in the works and the preceding scenario was shared solely to account for all possibilities, however far-fetched they might be.

All in all, the best-case scenario would be if BRICS – whether as a whole, just its RIC core, or those three plus the group’s new Emirati member – helps resolve whatever disputes are impeding the implementation of summer 2018’s Eritrean-Ethiopian port deal. If that’s not possible, then Ethiopia might take the political risks connected to relying on Somaliland for diversifying from its costly port dependence on Djibouti since it’s more secure than Kenya or Somalia, with all that entails for the region.