The Nexus Between Logistical Infrastructure and Sovereignty - The Case of Djibouti
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The Nexus Between Logistical Infrastructure and Sovereignty - The Case of Djibouti
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By Martin Nkonge
April 2025
Ports in the Horn of Africa serve as critical infrastructure with dual roles - they are essential economic conduits and also strategic geopolitical assets. This is particularly evident in the complex dynamics among Ethiopia, Somalia, Somaliland, Eritrea, and Djibouti, a tiny nation whose strategic location at the base of the Red Sea has made it both a shield against bigger neighbors and a focal point for simmering tensions in the Horn. Djibouti’s modern ports have fueled its economic rise, handling over 90% of landlocked Ethiopia’s trade, but as Ethiopia’s recent gambit with Somalia and Somaliland where an agreement was signed to lease part of Somaliland’s coastline near Berbera, this reliance also breeds tension that could unravel the region’s fragile peace.
Djibouti's stability in an otherwise volatile region raises a critical question: What has allowed it to maintain resilience where others have struggled? The answer lies in its strategic port infrastructure, which serves as both an economic engine and a geopolitical safeguard. By positioning itself as an indispensable logistical hub, Djibouti has secured a unique form of protection - its neighbors, deeply reliant on its ports for trade and security, cannot afford instability within its borders.
Djibouti’s ascent as a logistic hub is undeniable. Nestled beside the Strait of Bab el-Mandeb - where 52 vessels and four million barrels of oil pass daily - its stability amid the chaos among some regional neighbors like Sudan and Somalia has drawn global powers like China, the US, France, and Japan to establish military bases. The Doraleh Container Terminal, a sprawling 690-hectare facility, and the upgraded Ethiopia-Djibouti Railway, completed in 2017, cement its regional logistics dominance. For Ethiopia’s nearly 120 million people, Djibouti is a lifeline, processing 95% of its imports and exports. This dependency generates over $1 billion annually in port fees for Djibouti, employing a quarter of its formal workforce and anchoring its service-driven economy.
Yet, Djibouti’s logistical infrastructural prowess is a double-edged sword. Ethiopia, chafing at Djibouti’s high fees and monopoly, has long sought alternatives. Its January 2024 Memorandum of Understanding (MoU) with Somaliland - offering recognition of the breakaway region’s sovereignty in exchange for a 20-kilometer stretch of Gulf of Aden coastline - was a bold bid to diversify. For Somaliland, the deal promised a path to legitimacy after decades of de facto independence. But for Somalia, which claims Somaliland as its own, it was a violation of territorial integrity, prompting protest and diplomatic retaliation. For Djibouti, Ethiopia’s maneuver jeopardized its economic dominance and regional influence.
In late 2024, Turkey’s President Erdogan intervened, forging a tentative peace between Ethiopia’s Abiy Ahmed and Somalia’s Hassan Sheikh Mohamud through the Ankara Agreement. Ethiopia dialed back its Somaliland ambitions, opting to negotiate port access within Somalia’s sovereign framework. While tensions have presently subsided, it would be premature to regard this latest resolution of the Horn crisis as a definitive or lasting peace. Djibouti’s unmatched ports and the vested interests of global players might stave off immediate clashes, but regional dynamics will always remain integral in the Horn's fragile balance.
Eritrea’s role adds complexity. Eritrea’s recent military mobilization and Ethiopia’s border troop deployments risk escalating into conflict, with analysts warning of a “dry tinder” situation. In this recent development, tensions between Eritrea and Ethiopia, rooted in Eritrea's 1993 independence and the 1998-2000 border war, have recently resurfaced. Eritrea's exclusion from the peace talks following the 2020-2022 Tigray conflict is also beginning to prove problematic for the region. Further west, Sudan’s civil war between the Sudanese Armed Forces and Rapid Support Forces has been ongoing since 2023 and it spells instability across borders, straining Ethiopia’s western flank and emboldening groups like Al-Shabaab in Somalia.
Ultimately, Djibouti’s port infrastructure is not merely an economic asset - it is the bedrock of its sovereign strength. By serving as the primary conduit for regional trade, these ports secure substantial revenue streams and underpin the nation's economic stability, which in turn reinforces its geopolitical influence in a region where minor disruptions can precipitate broader instability. The Djibouti port for instance is a vital hub for refueling, transshipment, and transportation, acting as the region’s primary maritime gateway for both imports and exports. Each year, an estimated 2,500 ships call at this busy facility, with its container terminal playing a crucial role in facilitating global trade. It is this control over critical maritime gateways that ensures Djibouti’s neighbors, who depend on these facilities for trade and security, have a vested interest in maintaining its stability.
However, this advantage is not unassailable. Should demand for Djibouti’s logistical infrastructure decline - whether due to shifting global trade patterns, alternative routes, or waning foreign investments - the country’s economic strength and strategic leverage could diminish. Looking ahead, Djibouti must navigate the delicate balance of sustaining its economic edge amid the Horn of Africa’s shifting geopolitical currents. If its logistical dominance weakens, it risks increased vulnerability to external pressures, potentially eroding its sovereignty and opening the door to greater regional influence from more powerful actors. Maintaining its strategic significance will be essential to securing its future in an unpredictable landscape.
The key could lie in diversifying its economy beyond its logistical sector or investing in value-added industries that make it indispensable beyond its ports. Without proactive adaptation, its status as a strategic linchpin could transform into a liability, exposing it to coercion, economic stagnation, or even territorial encroachment by stronger regional actors. In an increasingly uncertain global environment, Djibouti must act decisively to reinforce its long-term viability, ensuring its stability is built on more than just its current logistical advantage.
Martin Nkonge is a Senior Analyst at Botho Emerging Markets Group