Prime Minister Abiy Ahmed arrived in Djibouti on January 11, 2026, accompanied by a senior delegation focused on security and economy, including Deputy Foreign Minister Birhanu Tsege, Finance Minister Ahmed Shideh, and Director of National Intelligence Redwan Hussein, underscoring the strategic importance of the visit. The visit, which comes just weeks after Egypt aggressively entered Djibouti’s infrastructure and energy sector, reflects growing geopolitical pressure on Ethiopia’s access and ties essential to regional stability. This is not a ceremonial engagement, but a consequential moment for a partnership facing calculated external efforts to exploit geography and divide aligned interests.
Historically, the Ethiopian-Djibouti partnership was forged in the geopolitical vacuum created by the 1998-2000 war between Ethiopia and Eritrea. Prior to this conflict, Ethiopia relied heavily on the ports of Assab and Massawa. The sudden separation of these routes transformed Djibouti from a secondary transit point to Ethiopia’s main maritime lung. This historic change necessitated the rapid expansion of infrastructure, particularly the 753 kilometers of standard gauge railway, which serves as a physical manifestation of mutual survival. Over the next two decades, this arrangement matured into a “logistics monopoly” with Ethiopia providing the quantities and Djibouti providing the gateway. This historical background created a fundamental alignment in which the political stability of one country was a precondition for the economic survival of the other, and established a precedent of non-interference and deep cooperation that characterized a generation of interactions between the two countries.
Today, this linkage is supported by statistics that demonstrate near-absolute economic interdependence. Ethiopia remains the world’s most populous landlocked country and is almost entirely dependent on Djibouti, with more than 95% of its maritime trade passing through Djibouti facilities. In 2023, Ethiopia exported approximately $128 million worth of goods to Djibouti, mainly agricultural products such as vegetables ($79.6 million), lettuce, and onions. Conversely, Djibouti’s economy is supported by its larger neighbour. Port fees generated from Ethiopian cargo contribute significantly to the country’s GDP of approximately $4.1 billion. In 2023, Djibouti exported $206 million to Ethiopia, mostly palm oil ($191 million) and scrap metal. Integration extends beyond trade to include important public utilities. Djibouti imports more than 65% to 70% of its electricity from the Ethiopian grid, and relies on cross-border pipelines for its freshwater supply. This “infrastructure for access” model has until recently been a stabilizing force in the region.
However, in late December 2025, Egypt began making advanced diplomatic and economic advances into Djibouti, disrupting the regional balance. On December 28, the Egyptian delegation led by Kamel El-Wazir, Deputy Prime Minister for Industrial Development and Minister of Industry and Transport, finalized three major cooperation agreements. These agreements include the development of a multi-purpose container terminal in partnership with Djibouti’s Great Horn Investment Holding and the establishment of a regional logistics center in the Khor Ambad Free Zone. Of particular strategic importance are energy agreements. The opening of a solar power plant in the Alta region and the development of a 23 MW solar power project at the Doraleh Container Terminal by the Egyptian company Elsuwedy Electric. These projects are designed to provide energy only to the port, fundamentally changing the electricity relationship in the corridor.
Egypt’s sudden investment in Djibouti’s energy and port sectors is often seen as a “logistics denialism” aimed at landlocked Ethiopia. By helping Djibouti achieve an energy surplus through solar power generation, Egypt is gradually weakening Ethiopia’s electricity supply, its main non-monetary asset. Establishing a presence at Doraleh port would be a significant influence for Cairo, which is currently engaged in a long-running dispute with Addis Ababa over the Grand Ethiopian Renaissance Dam (GERD). If Egypt were to influence or control the terminals that control nearly all of Ethiopia’s trade, it could introduce “security reviews” and logistical hurdles that could harm Ethiopia’s economy in times of political tension. This “maritime pincer” strategy reportedly includes similar upgrades to Eritrea’s Assab, with the aim of turning Ethiopia’s geographical vulnerability into a state of permanent containment.
The potential negative impact of this tension on both Ethiopia and Djibouti goes beyond regional rivalries. For Ethiopia, the loss of guaranteed and unrestricted access to Djibouti’s ports would immediately lead to a spike in inflation and the collapse of its industrial export strategy. For Djibouti, the risk of a “sovereignty auction” – hosting competing foreign interests that threaten a major economic partner – is a risky gamble. If Djibouti allows an Egyptian presence that threatens Ethiopia’s national security, there is a risk of retaliatory “corridor diversification” by Addis Ababa. Ethiopia has already indicated plans to transfer cargo to Somaliland’s Berbera port and Kenya’s Lamu Corridor. A significant drop in Ethiopian trade would be disastrous for Djibouti, whose financial stability relies on port revenues. The decline in trust over recent weeks has thus left both countries in a vulnerable situation where short-term tactical moves by Djibouti could lead to long-term abandonment by Ethiopia.
In direct response to these events, Ethiopia launched a high-level diplomatic counterattack to restore the importance of bilateral relations. Ahead of the prime minister’s visit, a high-powered delegation was sent to Djibouti, including Prosperity Party deputy leader Adem Farah. Alem Sime, Minister of Transport and Logistics; Ambassador Hadera Abela, Deputy Minister of Foreign Affairs. The composition of this group was strategically important. Adem Farah provided political influence, Alem Sime focused on the technical stability of the transit corridor, and Hadera Abela was responsible for diplomatic messages. Their goal was to ensure that the Ethiopian-Djibouti partnership is a sovereign priority that cannot be overshadowed by third-party investments. These talks laid the foundation for Prime Minister Abiy’s visit today and ensured that discussions focused on practical ways towards economic integration, rather than simply guaranteeing peace.
The Prime Minister’s visit to Doraleh port this morning, just weeks after the Egypt-Djibouti agreement, was a deliberate demonstration of “ownership of the corridor.” By being physically present at the terminal, the Ethiopian leadership sent a clear message to Cairo and the international community. Doraleh Port is an extension of Ethiopia’s economy and its management is a matter of Ethiopia’s national security. An outcome of the visit, highlighted by both President Guelleh and Prime Minister Abiy, was efforts to promote trade, logistics and development. This shows that Djibouti continues to welcome investment from Egypt, while remembering the vital importance of its partnership with Addis Ababa. Although the visit effectively reduced the imminent risk of a diplomatic rupture, it did not resolve the underlying tensions caused by Egypt’s presence in the maritime domain. After all, Djibouti-Ethiopia relations are characterized by a “codependency trap” from which neither side can escape without serious consequences. The “exemplary” nature of their partnership is not based on shared beliefs but on the harsh realities of geography.
Djibouti’s strategic importance rests solely on its role as Ethiopia’s gateway. Without the Ethiopian market, Djibouti’s world-class port would remain underutilized, a symbol of a lost monopoly. Meanwhile, Ethiopia’s growth depends on Djibouti’s stability. The involvement of external actors like Egypt introduces a zero-sum dynamic into a relationship that has historically been beneficial. To survive this new situation, the two countries will need to formalize their integration, perhaps moving from basic transportation agreements to shared ownership of critical infrastructure and integrated security protocols.
The future of the Horn of Africa will largely depend on whether the Addis-Djibouti corridor remains a bridge for regional integration or a front line for external containment. Diplomatic actions in early 2026 show that while external actors may promise attractive investments in solar energy and logistics, they cannot replace the decades-long ties that Ethiopia and Djibouti have shared. The challenge over the next decade will be for the two countries to build a relationship strong enough to withstand pressure from global and regional rivals, and to ensure that common economic and security interests are the driving force behind foreign policy. Stability in the Red Sea will not be achieved by surrounding regional powers, but by strengthening the natural economic corridors that have historically supported the Horn people.
Bezawit Eshetu, Horn Review Researcher
