Trade into countries around the Horn of Africa could pick up following the signing of a peace treaty between Ethiopia and Eritrea.
The two countries, linked through language, ethnicity, and a long line of history going back to antiquity, have been involved in an intractable war over the little-known town of Badme.
Since Eritrea gained independence from Ethiopia in 1993, the two neighbours have struggled to establish their dominance over the small hamlet marking the most important border crossing on the route to the Red Sea port of Massawa.
Losing the port was a major blow to the economy of Ethiopia which refused to cede control of Badme and its ill-defined borders.
Around 2000, following years of internecine fighting and diplomatic wrangling, Eritrea successfully claimed ownership of Badme, a decision that was eventually sanctioned by a UK ruling in 2002.
But Ethiopia, which became landlocked following Eritrea’s independence, refused to pull out of Badme, effectively causing a state of limbo around customs and other arms of governance affecting the disputed town.
Not only did it undermine trade on one of Eritrea’s most important hinterland routes, but it also bought Ethiopia time in strengthening its supply lines with Djibouti on whom it relied for sea trade.
Announcements that Eritrean President Isaias Afwerki and his Ethiopian counterpart, Abiya Ahmed, had formerly accepted a peace declaration between the two countries, have been welcomed by trade interests in the southern Red Sea.
AFP reported that “the re-establishment of diplomatic and trade ties after years of bitter separation could mean big benefits for both nations and the wider Horn of Africa region, plagued by conflict and poverty.”
The agency added that “Ethiopian access to Eritrea’s ports will be an economic boon for both, as well as posing a challenge to the increasing dominance of Djibouti, which had benefited from importing and exporting the majority of goods to Africa’s second most populous country.”
