Assab Port: A Win-Win Economic Opportunity for Eritrea and Ethiopia

A moment of opportunity for the Horn of Africa

In the heart of the Horn of Africa, Eritrea’s Assab Port could soon become one of the most important economic gateways on the Red Sea. With Ethiopia actively seeking better access to maritime trade, and Saudi Arabia showing interest in port development, a real opportunity has emerged. This moment offers not just potential gains for Ethiopia but also a once-in-a-generation chance for Eritrea to unlock long-term economic growth.

By modernising Assab Port and opening it to regional cooperation, Eritrea can create jobs, attract foreign investment, and strengthen its economic standing. For Ethiopia, gaining access to a second port—beyond Djibouti—means greater trade flexibility and lower transport costs. If done right, the result will be a win-win for both countries.

Why Ethiopia needs alternative sea access

Ethiopia, one of Africa’s fastest-growing economies, is landlocked. Since Eritrea’s independence in 1993, Ethiopia has relied on Djibouti for over 95% of its imports and exports. This dependence has come at a high price—more than $1 billion in port fees each year—and it leaves Ethiopia exposed to supply chain disruptions, regional tensions, and rising logistics costs.

To reduce this risk, Ethiopia is urgently seeking new port options. Agreements with Somaliland over Berbera Port are ongoing, but Assab offers a closer, more direct route—especially if modernised through Saudi or regional investment. For Ethiopia, Assab could provide both economic resilience and strategic diversification.

Assab Port: A gateway to growth for Eritrea

Assab is located on the Red Sea, just north of the Bab el-Mandeb Strait, a key global shipping route. Though underused today, the port has the potential to become a regional logistics hub.

Modernising Assab would generate massive economic benefits for Eritrea:

• Job creation in construction, logistics, port operations, and related services.

• New revenue from port fees, customs duties, and supporting industries.

• Improved infrastructure, including roads, utilities, and housing in the Assab region.

• Foreign investment, especially from countries like Saudi Arabia, which is actively expanding its influence in the Red Sea corridor.

Assab Port could become the cornerstone of Eritrea’s economic future. And if managed well, this growth can be inclusive, sustainable, and stabilising.

A shared future: how Ethiopia and Eritrea both benefit

Eritrea and Ethiopia have much to gain by working together. Opening Assab to Ethiopian trade under a fair agreement, with support from investors like Saudi Arabia, offers major advantages for both countries:

For Eritrea:

• Secures long-term foreign investment.

• Diversifies its economy beyond mining and agriculture.

• Builds stronger political and economic ties with neighbours and global investors.

• Positions itself as a key transit country in East African trade.

For Ethiopia:

• Gains a faster, cheaper route to the sea.

• Reduces overreliance on Djibouti.

• Expands trade capacity to match its growing economy.

• Strengthens national resilience in times of crisis or conflict.

This is more than a port—it’s a chance for peace, progress, and regional cooperation. A joint development model could turn Assab into a symbol of reconciliation and shared prosperity.

Saudi Arabia’s strategic interest and what it means

Saudi Arabia has plans to invest billions into upgrading Assab Port. This is not just an economic move; it’s also part of the kingdom’s broader push to strengthen its presence along key maritime routes. A modern Assab could act as a Saudi-linked trade hub in the Red Sea, complementing existing UAE, Turkish, and Chinese interests in nearby ports like Djibouti, Berbera, and Port Sudan.

For Eritrea, this investment would fast-track the port’s development and bring in capital, technology, and global trade connections. For Ethiopia, Saudi involvement in Assab presents both opportunities and challenges:

Potential Benefits for Ethiopia:

• New trade routes that ease pressure on Djibouti.

• Better transport logistics, lowering the cost of goods.

• Regional influence through shared infrastructure and trade partnerships.

Potential Risks for Ethiopia:

• Increased competition for influence in the Red Sea.

• Dependence on external powers, which may come with political trade-offs.

• Shifting power dynamics in the Horn of Africa, where alliances are already delicate.

Nonetheless, if Ethiopia and Eritrea work closely with regional partners, these risks can be managed—and the benefits maximised.

Balancing economic opportunity and political risk

Any development in the Horn of Africa brings some level of political risk. Eritrea must be careful not to become overly dependent on one outside partner. At the same time, Ethiopia must balance its strategic needs with diplomacy, especially given tensions with Egypt over Nile waters and with Somalia over Somaliland.

The key to success lies in transparency, shared benefits, and regional diplomacy. If Saudi Arabia’s role is limited to infrastructure and trade, and not military control or political pressure, both Ethiopia and Eritrea can enjoy the benefits of a modern Assab without destabilising the region.

Involving multilateral bodies like the African Union, IGAD, or the UN in oversight or support roles could also reduce tensions and build confidence among all parties.

A smart investment for the future

Developing Assab Port is not just a short-term project. It’s a long-term investment in economic transformation. The global economy is shifting, and regions that control trade routes and supply chains will hold more influence in the years ahead.

Eritrea, often overlooked in global development plans, has a chance to step forward. The port can become a platform for industrial zones, logistics centres, and even tourism. With improved rail and road links into Ethiopia and possibly Sudan or South Sudan in the future, Assab could become a gateway to Africa’s interior.

For Ethiopia, investing in this relationship—and helping to develop the infrastructure it needs—makes good economic sense. It secures trade flexibility, reduces reliance on a single partner, and strengthens the Horn of Africa’s role in global logistics.

Now is the time to act

The window of opportunity for Eritrea and Ethiopia to cooperate on Assab Port is wide open. With Saudi Arabia willing to invest and Ethiopia eager to diversify its port access, the stars are aligned. But like any strategic project, this one needs planning, trust, and shared commitment.

For Eritrea, this is a defining moment. Developing Assab Port can power its economy for decades, attract global investment, and reposition the country as a serious regional player. For Ethiopia, Assab offers relief from trade bottlenecks and a chance to build a stronger, more balanced maritime strategy.

Together, Eritrea and Ethiopia can turn the Red Sea into a corridor of opportunity—not just for themselves, but for the whole Horn of Africa.

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