For the better part of three decades, Ethiopia's economic landscape has been heavily reliant on Djibouti, which has effectively capitalized on its geographical position as Ethiopia's main maritime access point. However, this long-standing dependency is currently being challenged, marking a significant transition in the Horn of Africa. The dynamics now at play resemble a 'Red Sea Cold War,' wherein the stability of established regimes is being tested, reflecting broader implications for regional power structures and the limitations of rentier statehood.

A pivotal development indicating this transformation is the Memorandum of Understanding signed in January 2024 between Ethiopia and Somaliland. This agreement aims to enhance Ethiopia's access to the sea through the port of Berbera, a strategic move intended to mitigate over-reliance on Djibouti. While Ethiopian officials present this memorandum as part of a strategy to diversify marine access, it also hints at underlying tensions and a need for Ethiopia to secure its economic future against unpredictable regional dynamics.

As Ethiopia navigates this new maritime landscape, the implications for Djibouti's economy and political leverage are substantial. The port of Djibouti has been a critical asset for its economy, and the loss of Ethiopia's exclusive dependency could compel Djibouti to reassess its strategic priorities and economic models. Conversely, this shift offers Ethiopia a chance to reshape its political and economic strategies in a way that is less reliant on its southern neighbor, which could significantly alter the geopolitical dynamics in the Horn of Africa and beyond.