Djibouti’s Strategic Gambit to Keep Ethiopia’s Booming Maritime Trade

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Port competition in the Horn of Africa has escalated in recent years, with growing geopolitical tensions and strategic interests at play. One of the latest developments in this rivalry is Djibouti’s decision to offer Ethiopia a concession to operate the port of Tadjoura. This move further complicates the already complex dynamics between the region’s key players and underscores the importance of port access for landlocked Ethiopia, whose rapid economic growth has made it a critical market for port operators and neighboring countries.

Ethiopia, with a population of 130 million, has experienced remarkable economic expansion over the past two decades, positioning itself as one of the world’s fastest-growing economies. As a landlocked country, Ethiopia’s access to reliable and efficient ports is crucial for its trade, imports, and exports. Given this, port services in the Horn of Africa are highly coveted. Historically, Ethiopia relied heavily on Djibouti for access to the sea after losing the ports of Massawa and Assab in 1993, following the secession of Eritrea. Djibouti has since served as Ethiopia’s primary gateway to international trade, with the port of Djibouti handling the majority of Ethiopian cargo.

However, Ethiopia’s dependence on Djibouti has long been a point of strategic concern for Addis Ababa. In recent years, the Ethiopian government has sought to diversify its access to maritime routes to reduce its reliance on a single port. The government has explored several alternatives, including the newly developed port of Lamu in Kenya. However, the progress of infrastructure projects, including vital road and rail connections between Lamu and Ethiopia, has been slow. Political and security challenges have also hindered Ethiopia’s efforts to secure alternative routes through Sudan and Eritrea, limiting the impact of these ports.

As a result, Ethiopia has increasingly turned its attention to other regional ports, particularly in the semi-autonomous regions of Somaliland and Puntland. Both territories—Berbera in Somaliland and Bosaso in Puntland—have been seeking to attract foreign investment, but their status remains contentious. While Somaliland and Puntland both claim independence, the Somali government in Mogadishu regards them as part of its territory, complicating the legal and political landscape for international investors.

The rivalry intensified after Dubai-based DP World, a global port operator, became a key player in the region. After losing the concession to operate the Doraleh Container Terminal in Djibouti in 2018, DP World shifted its focus to the ports of Berbera and Bosaso. It has secured long-term contracts in both locations, promising to invest heavily in their development and significantly improve their infrastructure. This strategy puts DP World in direct competition with Djibouti, which has traditionally been Ethiopia’s main port partner.

In January of this year, Ethiopia and Somaliland reached an agreement allowing Ethiopia to develop port facilities on 20 kilometers of Somaliland’s coastline for a period of 50 years. This agreement gives Ethiopia a foothold in Berbera, positioning it as a key alternative to Djibouti for Ethiopian trade. The move is part of Ethiopia’s broader strategy to diversify its port access and reduce its vulnerability to political and economic changes in Djibouti.

However, Djibouti’s latest strategic move—offering Ethiopia the opportunity to operate the Tadjoura port—appears to be a direct attempt to undermine Ethiopia’s growing involvement in rival ports. Tadjoura, located on the opposite side of the Gulf of Tadjoura from Djibouti’s main port, was completed in 2017. Despite its potential, the port is still relatively small and lacks significant capacity compared to other regional ports. Built at a cost of $90 million, it has just two berths, a short Roll-on/Roll-off (RoRo) quay, and a depth of 12 meters, which limits its ability to handle larger vessels. Nonetheless, Djibouti’s offer to let Ethiopia operate Tadjoura represents an effort to create a new avenue for Ethiopian trade, while also attempting to solidify Djibouti’s role as Ethiopia’s primary port partner.

Djibouti’s decision to involve Ethiopia in the operation of Tadjoura is likely motivated by several factors. First, it may be an attempt to secure Ethiopia’s continued reliance on Djibouti for access to the sea, even as Ethiopia seeks alternatives. By offering Ethiopia the chance to develop Tadjoura, Djibouti may be trying to ensure that Ethiopia does not fully commit to the rival ports in Somaliland and Puntland. Second, it reflects the growing importance of port infrastructure in the region, where access to seaports is not just an economic matter, but also a strategic one.

While Tadjoura’s infrastructure may still be modest, its potential role in Ethiopia’s broader trade strategy should not be underestimated. With ongoing regional competition for access to Ethiopia’s booming economy, the outcome of this port rivalry will likely have far-reaching implications for the Horn of Africa’s geopolitical and economic landscape. As Ethiopia continues to explore alternative port options, including its growing involvement in Somaliland, Djibouti will need to carefully balance its offers with the broader regional competition to maintain its position as Ethiopia’s primary maritime gateway.

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