The Horn of Africa is a region marked by complex infrastructural interdependencies, where the decline and emergence of trade corridors continue to reshape the economic and political relations within and between states. This study draws on the Memorandum of Understanding (MoU) signed in January 2024 granting Ethiopia access to the sea in exchange for recognition of Somaliland to examine why and how these corridors divert and recirculate political and economic capital. Drawing on interviews with key stakeholders, public statements, and previous work on corridors and ports, the paper illustrates how national security considerations are the driving force behind these seemingly commercial agreements.

Summary

• Donor and stakeholder expectations for the Berbera corridor—centred on technical issues including increased economic activity and efficiency gains driven by the competition between the ports of Berbera and Djibouti—overlooked growing domestic and regional tensions and political instability. 
• The MoU was driven by the Ethiopian government’s growing perception of encirclement by hostile states, particularly Egypt, at a time when the spectre of geopolitical conflict looms in the waters of the Red Sea. 
• Regional tensions have implications for domestic politics in both Ethiopia and Somaliland, as domestic conflicts are further fuelled by regional actors. For Somaliland, the MoU raises questions about the balance between pursuing recognition, and economic autonomy, while managing internal tensions.
• Fundamentally, the Ethiopian government’s vision extends beyond trade liberalisation, aiming to position Ethiopia as a regional superpower with grand ambitions of geopolitical significance.
• The signing of the MoU marks a tactical shift in Ethiopian foreign policy, breaking longstanding taboos and setting a new narrative around the Red Sea’s importance.
• From the perspective of some of Ethiopia’s neighbours, this strategy evokes memories of its former imperial ambitions, while domestic critiques view these manoeuvres as a distraction from ongoing internal conflicts and a tactic to reignite nationalistic fervour around a generational legacy.
• Ethiopia’s trade corridors transcend their role as conduits for goods and services; they serve as critical arenas where local, national and international actors negotiate—and occasionally contest through conflict—their visions of sovereignty, autonomy and security.

XCEPT programme

This report is a product of the Cross-Border Conflict Evidence, Policy and Trends (XCEPT) research programme. XCEPT brings together leading local and international experts to examine conflict-affected borderlands, how conflicts connect across borders, and the factors that shape violent and peaceful behaviour. The programme carries out research to better understand the causes and impacts of conflict in border areas and their international dimensions. Funded by UK International Development, XCEPT offers actionable research to inform policies and programmes that support peace, and builds the skills of local partners. The views expressed do not necessarily reflect the UK government’s official policies.