Ethiopia-Eritrean rapprochement and what it portends for Kenya’s economy

Ethiopia’s pivot north also has grave implications for Kenya. For a long time, Kenya and Ethiopia have nursed a dream to build a giant port at Lamu that is then connected to Addis Ababa by road and rail link. This project, LAPSSET, is underway in Kenya, funded by billions in Chinese loans. But will Ethiopia need to use the LAPSSET facilities if it has access to Eritrean ports?

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KPA nears delivery of second container terminal. Commercial viability of such massive investments becomes questionable with neighbours abandoning partnerships midstream

BY PETER WANYONYI

Recent tidings out of Addis Ababa and Asmara make for interesting geopolitical reading. In July 2018, the leaders of Ethiopia and Eritrea ended decades of armed hostility between their two countries. Ethiopian Prime Minister Abiy Ahmed and Eritrean President Isaias Afeworki set aside an acrimonious history and agreed to re-establish ties between the two sister states. Progress from then on was super-swift: Ethiopian Airlines, Africa’s leading airline by some distance, immediately set up flights to Eritrea from Ethiopia. Immigration ties between the two nations were re-established, with citizens of the two countries receiving visa waivers when visiting.

Perhaps most importantly, trade and military ties were also quickly talked up. Eritrea gave permission for Ethiopia to invest in Eritrean ports on the Red Sea – giving Ethiopia yet another option in its quest to have a port. Ethiopia lost its entire coastline when Eritrea became independent in 1993. The Ethiopian Navy, which was based in the Red Sea coastal town of Massawa, was first relocated to Addis Ababa, and was then disbanded in 1996. But Ethiopia maintained a maritime training institute at Bahir Dar on Lake Tana, the country’s only large lake. This institute has been training Ethiopian sailors in engineering and seafaring, and there are persistent rumours that navy soldiers continue to be trained there.

Without a port, Ethiopia has hurt economically and militarily. The country has had to rely on tiny Djibouti next door as an outlet for its exports. With China having identified Ethiopia as the most serious of East Africa’s possible manufacturing bases, dozens of Chinese companies have built factories in Addis Ababa and other Ethiopian cities, with the products thus made being exported through Djibouti: 95% of Ethiopian trade is carried out via Djibouti. But Djibouti was not open to military overtures from Ethiopia, which has always wanted to re-establish its disbanded navy. On May 1 2018, Ethiopia signed an agreement for a huge stake in Djibouti’s largest port. Two days later, Ethiopia inked another agreement for a large stake in Sudan’s largest Red Sea facility, Port Sudan. Added to the renewed relationship with Eritrea, these agreements give Ethiopia some much-needed room to manoeuvre in its relationship with Djibouti, which charges Ethiopia high fees for port facilities usage.

There’s another angle to this relationship, though. Ethiopia and Eritrea are natural allies – they are culturally and ethnically quite similar, they share religions and languages. Ordinary Ethiopian and Eritrean people have always been very close to each other, and the resolution of this long-running feud paves the way for this relationship to blossom again. But it is in military terms that the geopolitics of this development should be seen.

The Horn of Africa region is brimming with port investments. This is not because a huge new market has suddenly opened up in the region, for the people of the Horn remain some of the poorest in Africa. Rather, the nations of the Horn abut some of the most strategic military real estate in the world. Eritrea, Sudan, Djibouti and Somalia all sit alongside a narrow sea lane that is the southern gateway to the Red Sea. Europe relies on that gateway to access oil from the Middle East – for obvious reasons, Arab oil headed for Europe cannot transit Israel into the Mediterranean. At the southernmost tip of the entrance to the Red Sea is the Bab al-Mandab straight, directly opposite Djibouti and southern Eritrea. Just 20km at its narrowest, this is the lane through which virtually all the Middle Eastern oil bound for Europe passes. And this is where the Ethiopian reconciliation with Eritrea becomes critical.

It wouldn’t take much to block this tiny gateway – sink several ships across the 20km width of the passage and it’s impossible for oil to reach western markets via the Red Sea. This would force such oil exports to go all the way around South Africa and through the perilous Atlantic to reach Europe, adding massively to the costs of transport and insurance and destabilising the export economies of the European Union. Add to this the instability of Europe’s other major energy supply – natural gas from Russia, which Moscow switches off when the Europeans annoy Putin, especially in winter – and the geopolitical significance of Eritrea and Djibouti grows way out of proportion to their respective sizes.

With Djibouti already hosting American, European, Chinese and even Middle Eastern military bases, and nearby Somalia hosting a Turkish military base, the competition is on to win Eritrea over – and Africa is fast losing out as world powers scramble for vantage points at what is going to be the definitive flashpoint of world energy politics going forward.

Ethiopia’s pivot north also has grave implications for Kenya. For a long time, Kenya and Ethiopia have nursed a dream to build a giant port at Lamu that is then connected to Addis Ababa by road and rail link. This project (the Lamu Port – South Sudan – Ethiopia Transport, LAPSSET) is underway in Kenya, funded by billions in Chinese loans. The port at Lamu is said to be on schedule to be opened in 2020. The highways needed to connect the port to Moyale and thence to Addis Ababa are largely complete, while the accompanying railway line appears to be held up in local Kenyan politics. But will Ethiopia need to use the LAPSSET facilities if it has access to Eritrean ports?

The Kenyan port facility has no room for Ethiopian Navy accommodation, which means Ethiopia will prefer the Eritrean ports. Other factors are also in play: Ethiopia is building giant dams on the River Nile, to lift its people out of poverty via irrigation of its parched lands. Egypt, the regional military hegemon, sees this as an existential threat, given how reliant Cairo is on the waters of the Nile. Egypt is said to have a military unit trained in highland and jungle warfare, just in case it needs to send troops into East Africa to destroy dams and bridges on Nile tributaries.

The Egyptians are staunch allies of Saudi Arabia, which itself is a sworn enemy of Iran. On July 2 2018, Iran threatened to block the Strait of Hormuz, a critical gate in the Persian Gulf through which Saudi, Emirati, Iraqi, Kuwaiti, and Qatari energy exports pass on their way to the Red Sea and Europe. With the UAE and the Saudis already ensconced in Djibouti, Iran will be looking for allies along the Southern Red Sea coast.

Ethiopia, looking to quickly build a navy that can menace Egypt enough to scare Cairo into thinking twice about striking Ethiopian Nile facilities, will want to engage allies opposed to the Saudis and their Egyptian allies. Iran will be waiting, and the Horn of Africa’s own version of the Great Game will begin in earnest.