Ethiopia-Somaliland Red Sea Deal Raises Risks For Investors

[Deeq A.]

Ethiopia has signed a landmark deal with Somaliland to gain access to ports on the Red Sea, in a controversial move that could significantly raise the risks for foreign investors in East Africa.

Ethiopia, which is the world’s most populous landlocked country, has long considered access to the Red Sea as a strategic imperative. Addis Ababa briefly secured a coastline in the years after the Second World War, when Eritrea was subsumed into Ethiopia, but then lost this in 1993 following Eritrean independence.

Since then, Ethiopia has been highly dependent on neighbouring Djibouti for its imports and exports. Over 95% of Ethiopia’s import-export trade volume passes along the corridor between Addis Ababa and Djibouti. Read more here

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