Strategic Risks in the Horn of Africa’s Port Cities: Sovereignty, Militarisation, and Competing Interests

14/03/2025 - Written by Irshad Nur

Introduction

The Horn of Africa—spanning Somalia, the self-proclaimed state of Somaliland, the semi autonomous Puntland, Djibouti, Eritrea, Sudan, and Kenya—has emerged as a linchpin of global trade. Approximately 15% of global maritime trade transits through the Red Sea, with the Suez Canal  serving as a critical conduit for this traffic. Additionally, the Red Sea facilitates about 30% of the  world’s container traffic.

Yet this strategic value has turned the region into a  battleground for competing interests, as Gulf states, Turkey, China, and Western actors militarise hubs like Djibouti (hosting six foreign military bases) and Eritrea’s Assab (a former UAE staging  ground), while commercial giants such as DP World secure quasi-autonomous concessions in Bosaso (Puntland) and Berbera (Somaliland). These developments increasingly bypass fragile central  governments, exacerbating sovereignty risks: the 2024 Somaliland-Ethiopia MOU, granting Ethiopia naval access in exchange for recognition, has inflamed tensions with Somalia’s federal authority, and China’s debt-laden Lamu corridor in Kenya underscores how foreign backed projects fuel governance fragmentation.

The rise of autonomous port cities, empowered by external financing and militarisation, threatens to redraw political loyalties, destabilising already fractured states and  creating volatile flashpoints where trade ambitions collide with national sovereignty. 

Sovereignty Risks and Militarisation

Foreign Military Expansion:

This concentration of foreign forces has turned Djibouti into a “garrison state,” with military leases generating over $125 million annually, contributing significantly to the economy. The country hosts U.S., French, Chinese, Japanese, Italian, and NATO military bases, making it a strategic hub for global  military operations. The U.S. alone pays over $60 million annually for Camp Lemonnier, its primary African base. Beyond military revenues, Djibouti relies heavily on foreign aid and financial assistance. The U.S. provided over $16 million in FY2023, including $9 million for development aid and $6 million in military assistance. Additionally, the IMF and African Development Bank extended $43 million in loans and $41 million in grants to address economic vulnerabilities, while Djibouti’s external debt remains a significant challenge, exceeding $2.5 billion.

Similarly, Eritrea’s Assab Port became a focal point of militarisation during the Yemen conflict, when the UAE leased the facility in 2015 to support its military campaign. The port served as a logistics hub for Emirati and Saudi operations. The UAE’s withdrawal in 2021 left Eritrea with a militarised port and strained relations with neighbouring Ethiopia, highlighting how foreign military presence can exacerbate regional instability.

Implications for Sovereignty: 

The militarisation of ports in Djibouti and Eritrea underscores the broader sovereignty risks facing the Horn of Africa. Foreign military bases often operate under extraterritorial agreements, limiting host  nations’ control over their own territory. For example, Djibouti’s lease agreements grant foreign powers exclusive jurisdiction over their bases, raising concerns about national sovereignty. Moreover, the presence of rival powers—such as the U.S. and China in Djibouti—creates a volatile environment  where host countries risk becoming collateral damage in geopolitical disputes. 

In Eritrea, the Assab Port lease side-lined local governance as  the UAE negotiated directly with the authoritarian regime of Isaias Afwerki. This dynamic has left  Eritrea increasingly isolated, with its reliance on foreign military partnerships undermining its long term stability and sovereignty. 

Commercial Encroachment

Foreign investments in the Horn of Africa’s ports often prioritise strategic interests over local  governance, creating sovereignty risks for host nations. A prime example is Kenya’s Lamu Port, a  flagship project of China’s Belt and Road Initiative (BRI). Funded by $3.2 billion in Chinese loans, the  port aims to transform Lamu into a regional trade hub. However, the project has exposed Kenya to significant debt vulnerabilities, with debt-to-GDP ratios exceeding 70%. This financial strain has  granted China substantial leverage, as seen in the 2019 near-seizure of Kenya’s Mombasa Port over unpaid debts—a stark reminder of how infrastructure financing can erode sovereignty. 

Similarly, DP World’s investments in Bosaso (Puntland) and Berbera (Somaliland) have side-lined  Somalia’s federal government, enabling subnational entities to negotiate directly with foreign firms. This fragmentation undermines Mogadishu’s authority and risks legal disputes, as seen in Somalia’s  opposition to the 2024 Ethiopia-Somaliland MOU, which grants Ethiopia naval access in exchange for  recognition. These cases illustrate how commercial encroachment, coupled with weak governance,  empowers foreign actors to reshape political loyalties and challenge national sovereignty - all fuelling regional instability.

Key Insights

Sovereignty Risks Are Escalating:

• The rise of autonomous port cities—such as Berbera (Somaliland) and Bosaso (Puntland)—challenges the authority of federal governments, creating legal and operational uncertainties for investors. For example, DP World’s investments in these ports have sidelined Somalia’s federal government, leading to disputes over revenue sharing and regulatory oversight.

• Foreign military bases, such as those in Djibouti, operate under extraterritorial agreements, limiting host nations’ control and exposing them to great power rivalries. The 2018 U.S.-China tensions over alleged laser attacks at Camp Lemonnier underscore how militarisation can entangle host countries in geopolitical conflicts.

Debt Diplomacy and Commercial Encroachment:

• China’s Belt and Road Initiative (BRI) has left countries like Kenya vulnerable to debt  traps, with Lamu Port’s $3.2 billion loan pushing the country’s debt-to-GDP ratio above 70%. The near-seizure of Mombasa Port in 2019 over unpaid debts serves as a stark warning of the risks associated with overreliance on foreign financing.

• Gulf states and Turkey are also leveraging infrastructure projects to secure strategic footholds. These projects often bypass local governance frameworks, exacerbating  fragmentation and instability.

Regional Stability Hangs in the Balance:

• The 2024 Ethiopia-Somaliland MOU, which grants Ethiopia naval access in exchange  for recognition, has inflamed tensions with Somalia’s federal government and risks  sparking broader regional conflict. Such unilateral deals highlight the fragility of governance in the Horn and the potential for escalation.

• Eritrea’s Assab Port, once a UAE logistics hub for the Yemen conflict, remains  militarised and underutilised, symbolising the long-term risks of foreign military  presence.