Landlocked since Eritrea’s independence in 1993, Ethiopia conducts the overwhelming bulk of its external trade through Djibouti, a dependence that Addis Ababa increasingly frames as a strategic vulnerability. The issue has re‑emerged sharply in 2024–2025 amid Ethiopia’s efforts to secure “reliable, safe and durable” routes to the Red Sea and Gulf of Aden, including an ill‑fated memorandum with Somaliland and renewed rhetoric touching Eritrean sensitivities about the ports of Assab and Massawa. Prime Minister Abiy Ahmed has recently called Ethiopia’s maritime ambition “historical, legal and existential,” a stance echoed in regional commentary that warns of escalating risk if diplomacy fails (APA News, 29 Oct 2025; Courrier international, 5 Sep 2025).
Economic lifelines and strategic geography: why Red Sea access matters to Ethiopia
Over 90–95 % of Ethiopia’s import‑export trade by volume moves along the Addis‑Djibouti corridor, underscoring how a single route—and a single set of ports—underpins Africa’s second‑most‑populous economy (World Bank, 20 Jul 2023). Djibouti, for its part, is structurally tethered to Ethiopian throughput, a symbiosis that concentrates benefits but also risk during shocks from the wider Red Sea theatre (World Bank country overview, updated 24 Apr 2025).
For Addis Ababa, diversification is not simply about port fees and schedule reliability; it is framed as a question of economic sovereignty. The proposed door to the sea via Somaliland, signed as a memorandum of understanding on 1 January 2024, envisaged leased coastline and prospective recognition of Somaliland in exchange—triggering a diplomatic rupture with Mogadishu (Reuters, 2 Jan 2024; AP, 1 Jan 2024). The episode illustrated both the intensity of Ethiopia’s quest and the costs of pursuing access outside internationally recognised sovereignty.
Route options and vulnerabilities
Djibouti (status quo). Strengths include scale, existing rail/road, and service ecosystem; vulnerabilities are single‑point dependence, fee exposure, and spillover risks from Red Sea insecurity.
Somaliland/Berbera (contested). Berbera’s upgrades and geographic proximity are attractive, but legal recognition hurdles and Somali sovereignty objections impose high political risk. Analyses by security and policy institutes cautioned that the 2024 MoU heightened regional tensions without delivering a bankable corridor (International Crisis Group, 6 Mar 2024; IISS, 6 Mar 2024).
Eritrea (Assab/Massawa). Geographically optimal for Ethiopia’s highlands, Eritrean ports remain sensitive touchpoints given the 1998–2000 war and fraught détente since 2018. Any arrangement would require a political breakthrough in Asmara and durable security guarantees.
Sudan/Port Sudan. In theory a diversifier, the Sudanese civil war renders this corridor operationally uncertain for the foreseeable future.
From war to uneasy peace: Eritrea–Ethiopia relations and the maritime question
Relations have swung from armed conflict (1998–2000) to rapprochement in 2018 and back to mutual suspicion after the Tigray war. Eritrea’s authoritarian consolidation and economic under‑performance—documented by international outlets and UN officials—coexist with a heavy security posture along its Red Sea coast, shaping Asmara’s incentives to resist any perceived encroachment. A recent feature depicts Eritrea as a “waning dictatorship” confronted by Ethiopia’s maritime ambitions and emerging intra‑Ethiopian alignments, including in Tigray (GEO, article text provided by user; original link).
Notably, Ethiopia’s armed forces publicly tied national sacrifice to the Red Sea issue on 27 September 2025, in messaging that referenced the Eritrean port of Assab; regional media captured the statement as reflecting a hardening line (APA News, 29 Sep 2025). As tensions rose through 2025, Addis Ababa sought outside mediation to defuse the rift with Eritrea, signalling awareness of escalation risks (Business Insider Africa, 29 Oct 2025).
Rhetoric, risks, and rules: law of the sea and the pursuit of access
International law provides landlocked states with transit rights but not unilateral claims to a neighbour’s coast. Under Part X of the United Nations Convention on the Law of the Sea, landlocked states enjoy freedom of transit “by all means of transport” to and from the sea, but the “terms and modalities” must be agreed with the transit state and do not infringe the latter’s sovereignty (UNCLOS, Part X; Art. 125(1)–(3)). The older 1965 Convention on Transit Trade of Land‑Locked States similarly codifies transit facilitation while respecting territorial integrity (UN Treaty Collection, X‑3).
In practice, Ethiopia’s options fall along a spectrum:
- Contractual access (port lease, dedicated terminals, rail slots, dry‑port integration): commercially bankable if backed by long‑term concessions and corridor governance.
- Political‑security bargains (recognition‑for‑access, security cooperation): high diplomatic cost and legal contestation, as the Somaliland episode showed (The Guardian, 1–2 Jan 2024).
- Coercive scenarios: beyond law and carrying severe reputational, sanction, and insurance consequences for regional shipping.
For maritime commerce, uncertainty translates into premiums. Persistent rhetoric suggesting coercive solutions can lift war‑risk and delay premiums for carriers using the southern Red Sea—even without shots fired—as underwriters reprice corridor stability. While the precise pricing impact depends on underwriters’ threat models, the direction of travel is clear: predictable transit arrangements lower costs, while ambiguity raises them.
Regional and external actors: Djibouti, Somaliland, Gulf states and great‑power interests
Djibouti’s multipolar basing ecosystem and entrenched port services give it leverage: more than 95 % of Ethiopian trade revenue flows through Djiboutian infrastructure, which in turn anchors a significant share of Djibouti’s GDP (World Bank; World Politics Review, 2 Feb 2024). Diversion of flows—even marginal—would echo through Djibouti’s revenue model and its host‑nation arrangements with foreign militaries.
Somaliland remains a potential diversifier on paper, but the 2024 MoU provoked firm pushback from Somalia and required subsequent diplomacy brokered by Turkey to stabilise ties—highlighting the fragility of routes that rest on unresolved sovereignty questions (Reuters, 4 Apr 2024; The Guardian, 12 Jan 2025).
External investors—especially Gulf partners with logistics and port portfolios—will weigh commercial prospects against political risk. The calculus is straightforward: if Addis Ababa and its neighbours can embed access within a rules‑based framework, private capital is more likely to underwrite terminals, rails, and hinterland logistics; absent that, projects stall or demand sovereign guarantees priced to risk.
What would a sustainable settlement look like?
A workable pathway involves sequenced, legally robust arrangements rather than headline gambits. Three elements stand out:
- Codified transit guarantees and corridor governance. Ethiopia’s strategic objective can be met by deepening a “predictability compact” with Djibouti and any additional host, combining multiyear port leases, dispute‑resolution clauses, and joint corridor authorities. International law offers a scaffolding, but bankable confidence requires detailed agreements referencing the transit rights in UNCLOS Part X and associated practice (UNCLOS).
- Diversification without destabilisation. Addis Ababa can pursue supplementary throughput at Berbera or elsewhere only if arrangements are squared with internationally recognised sovereigns. That implies parallel diplomacy with Mogadishu and guarantees that avoid reopening boundary disputes. Analyses urging calibrated engagement rather than binary recognition‑for‑access suggest the route to durable capacity (International Crisis Group).
- De‑escalation with Eritrea. However remote today, an Eritrea track would deliver the most efficient geography. Here, mediation and confidence‑building—from hotlines to demilitarised logistics enclaves—are preconditions. Addis Ababa’s recent call for mediation is a constructive signal that should be matched with verifiable steps to dial down rhetoric tied to Assab and Massawa (Business Insider Africa, 29 Oct 2025). In parallel, Asmara’s incentives could include revenue‑sharing, employment, and infrastructure upgrades that do not threaten sovereignty.
Implications for commercial shipping
For carriers and insurers, the signal to monitor is institutionalisation: memoranda elevated into ratified, cross‑border corridor agreements; transparent tariff schedules; and predictable security coordination. Conversely, statements hinting at unilateral “rights” to coastal facilities will continue to elevate perceived political‑risk premia for voyages through the southern Red Sea chokepoint.
Ethiopia’s need for diversified sea access is undeniable; so is the legal reality that such access must rest on consent and codified transit. The Horn will remain exposed to higher risk until rhetoric yields to sequenced agreements that embed predictability for ports, rails and carriers. The choice now facing Addis Ababa, Asmara and regional partners is whether to turn the Red Sea from a bargaining chip into a governed corridor that lowers costs for all.
