Why is Somalia so angry about Ethiopia's new port deal on the Red Sea? | International trade news

An agreement under which Somaliland agreed to lease a seaport on the Red Sea to Ethiopia has sparked anger in Somalia. Somaliland is an autonomous separatist state, which Somalia says is part of its northern territory.

Mogadishu recalled its ambassador from Ethiopia on Tuesday to hold “deliberations” on the issue, noting that the port agreement signed the previous day would increase tensions and endanger stability in the broader Horn of Africa region.

Sentiment over the port agreement is already running high. Somalis took to the streets of Mogadishu to protest the agreement on Wednesday.

What's the deal about?

The agreement, signed in Addis Ababa by Ethiopian Prime Minister Abiy Ahmed and Somaliland leader Musa Bihi Abdi, gives Ethiopia a 50-year lease on a naval base with access to the port of Berbera in Somaliland for commercial maritime operations.

In return, Ethiopia says it will provide an “in-depth assessment” of Somaliland's bid for formal recognition as an independent state – the first time any other country has offered to do so. An Ethiopian government statement revealed that Somaliland will also receive a stake in state-owned Ethiopian Airlines, although details about this part of the agreement, especially regarding any additional cash payments, are scant.

In a separate statement published on X, Abiy's office described the agreement as “historic” that would allow Addis Ababa to “diversify its access to seaports.” She added that this will also enable the two parties to deepen relations in the economic and political sectors.

prime minister @Abi Ahmed Ali Somaliland President Musa Bihi Abdi signed a historic memorandum of understanding in Addis Ababa.#PMOEthiopia pic.twitter.com/6lPlCoepGr

— Prime Minister’s Office – Ethiopia (@PMEthiopia) January 1, 2024

It was a long-awaited agreement. In 2019, Ethiopia bought a 19 percent stake in the port of Berbera, while Somaliland retained 30 percent, while Dubai company and port manager DP World owned 51 percent. In exchange for funding the continued development of the port at approximately $442 million, DP World will manage the port for 30 years. The UAE group's investment in Berbera had previously sparked controversy in Somalia, with Parliament voting in 2018 to declare the deal null and void. This measure had little effect in halting the project.

The port will open Ethiopia to the Red Sea and the Suez Canal, giving it access to Europe. Details about when the lease will take effect are unclear.

Why is Somalia angry about this deal?

Somalia and Somaliland have a long and bitter history, as Mogadishu, an autonomous region with a population of four million people, is part of its territory.

Somaliland, which Britain ruled as a protectorate until 1960, briefly became independent before merging with Somalia to form a republic.

The region separated from Somalia in 1991 after fighting a war of independence largely along ethnic lines. These wounds have not yet healed among Somali families on both sides of the border.

Since then, Somaliland has operated independently despite little revenue and no access to international trade or finance. Somaliland's capital, Hargeisa, prints its own passports, issues Somaliland shillings, and holds elections. Some experts consider the region to be one of the de facto “most stable” countries in the world.

But Mogadishu considers any international recognition of Somaliland to be an attack on Somalia's sovereignty. The Somali government described the port deal with Addis Ababa as “outrageous” and “unauthorized.”

“The Federal Government of Somalia considers this a hostile step… constituting a flagrant violation and interference in the independence, sovereignty and territorial independence of the Federal Republic of Somalia,” a government statement issued on Tuesday said.

We strongly condemn and reject the heinous acts committed by the Ethiopian government in signing an unauthorized Memorandum of Understanding with Somaliland (Northern regions of Somalia) on January 1, 2024 in Addis Ababa. pic.twitter.com/84ngjhxvK9

— Office of the Permanent Secretary for Foreign Affairs 🇸🇴 (@PSMOFA) January 3, 2024

“We will not stand idly by and watch our sovereignty be threatened,” President Hassan Sheikh Mohamud told Parliament on Tuesday.

The agreement between Somaliland and Ethiopia came just days after Mogadishu and Hargeisa agreed to resume mediations led by Djibouti with the aim of convincing the two parties to resolve their deep issues. Many of these rounds of talks have not yielded results in the past.

Mustafa Ahmed, an independent researcher speaking from Hargeisa, told Al Jazeera that with this latest development, those talks may stall again. “The two sides have exchanged different interpretations of what the talks entail,” Ahmed said. “Mogadishu said it was talking about reunification, and Somaliland said it would decide its fate as an independent state. It was bound to fail, but the current crisis has catalyzed its collapse.

Why does Ethiopia want access to the sea?

Ethiopia is one of Africa's most populous countries with a population of 120 million, but its economy is constrained by a lack of access to the sea.

The East African country was cut off from the Gulf of Aden after a three-decade war that led to the secession of Eritrea in 1993, taking with it all of the country's former coastline.

Since then, Ethiopia has mainly relied on the smaller Djibouti for its port operations. The Port of Djibouti handles more than 95 percent of Ethiopian imports and exports. Addis Ababa even managed to operate a shipping line from the port of Djibouti.

On October 13, Abiy told Parliament that the sea was important for Ethiopia's survival.

He said: “Ethiopia is an island surrounded by water, but it is a thirsty country.” “The Red Sea and the Nile will define Ethiopia. They are interconnected with Ethiopia and will be the fundamentals that will lead either to Ethiopia's development or to its demise.

His statement sparked concern across East Africa. Analysts wondered whether he was referring to a possible military invasion of Ethiopia's neighbors in a region already experiencing multiple political crises and climate change-related events such as drought. But Addis Ababa later clarified that the prime minister was not referring to any kind of military action against its neighbours.

However, it may not be possible to avoid regional ripples as countries gauge which side to support in this latest dispute, researcher Ahmed said. Ethiopia contributes to the United Nations peacekeeping mission in Somalia, and this agreement could be threatened. Ahmed said that the internal conflict may score points for the troubled Ethiopian government.

“It will give Abiy the opportunity to rehabilitate his unpopular image in the country due to his wars in the Tigray region, the violent insurgencies in the Amhara and Oromo regions, as well as the economic stagnation the country has faced in the past few years. Access to the sea has been presented as an existential issue for Ethiopian leaders on the Over the years, this new agreement would give Abiy domestic political gains.

Is there a risk of armed conflict?

With the tense and provocative rhetoric, there are fears of a long-term diplomatic rift between Ethiopia and Somalia. But there were no talks of armed conflict on either side.

There is a history of regional conflict between the two countries. In 1977, Somalia invaded the Ogaden region, a disputed border region now located in Ethiopia. With the support of the Soviet Union and Cuba, which were seeking to establish a socialist alliance across the continent, Ethiopia responded and ultimately won the war. The decimation and defeat of the Somali army and the eventual rebellion it provoked internally are linked to Somaliland's secession from Somalia.

At the moment, Somalia cannot match Ethiopia. Somalia has an army of 20,000 soldiers, while Ethiopia has more than 130,000 soldiers.

Both countries already face a great deal of internal instability. Mogadishu is locked in a long war with the armed Al-Shabaab movement. Ethiopia is dealing with the repercussions of the Tigray war as well as a new conflict in the Amhara region.

An all-out war could also disrupt the operations of the African Union Transitional Mission in Somalia, which includes thousands of Ethiopian soldiers, who will likely be withdrawn.

How did the world respond?

Several countries and international organizations have fought this conflict, most of which support Somalia. The African Union, Egypt, Qatar, Turkey and the United States issued statements this week urging Ethiopia to respect Mogadishu's sovereignty.

So did the European Union, the Organization of Islamic Cooperation, and the League of Arab States. In a statement on the X website, the association, of which Somalia is a member, advised Ethiopia to “adhere to the rules and principles of good neighbourliness.”

The Intergovernmental Authority on Development (IGAD), a trade bloc in East Africa, refused to take sides on Wednesday, calling instead on all parties to resolve the issue amicably. Mogadishu criticized this response, saying it did not rise to the level of an appropriate condemnation.

What then?

Despite the controversy and concerns about escalating tensions, Somalilanders celebrated in the streets on Monday after the port deal was announced. Generally, they are excited by the prospect of recognition of their region by other countries, and the economic opportunities that they believe await them outside Mogadishu's sphere of influence.

“The feeling now in Somaliland is cautious optimism,” analyst Ahmed said. “People are happy that Somaliland’s quest for international recognition has become a reality, but at the same time they are wary about the uncertainties that lie ahead, including how regional and global powers will support or oppose recognition.”

All eyes are now turning to Somalia to see how he will challenge this deal. So far, Mogadishu has not identified any clear legal measures it intends to take, other than indicating that leasing the port in Somaliland is illegal.

Instead, it severed diplomatic relations with Ethiopia and pressured countries via official phone calls to make statements against the port deal. It also prompts regional bodies such as the Intergovernmental Authority on Development to denounce the agreement.

Meanwhile, Ethiopia doubled down on Wednesday with a long statement stressing that no laws were violated when the port agreement was signed. The statement sounded a sympathetic tone about Somaliland's plight, noting that the region has not been recognized as a state even though Addis Ababa and other countries have consular relations with Hargeisa.

The deal enables “Somaliland to receive the kind of assistance and partnership it cannot get from any other country and also responds to its long-standing demands,” the statement said.