Analysis & Opinions - Belfer Center for Science and International Affairs, Harvard Kennedy School

The Other Side of the Strait: The Strategic Significance of the Houthi’s Aggression for East Africa

| Mar. 06, 2024

Iranian-backed militants in Yemen are clashing with the United States and British naval forces in the Red Sea over Israel’s operations in Gaza, all in a complex dance for geopolitical leverage in the Middle East. Yet, there is another region with a stake in the conflict brewing in the Bab al-Mandab strait, one seemingly beyond the world’s purview – the Horn of Africa. 

Attacks on merchant vessels by the Houthis, a Yemeni Shia militia group, put the nations of East Africa at risk of severe economic decline and have the potential to exacerbate political instability in an already fragile region. Shipping disruptions in the Red Sea have an amplified effect on these trade-reliant economies. The fallout from impeded commercial flows will likely worsen existing humanitarian crises and aggravate ongoing regional tensions. Should the situation further deteriorate, regional and global actors with interests in East Africa may be affected to the point of altering their strategic position toward the region.

 

Houthi Attacks Diverting Shipping from the Red Sea   

Late last fall, the Houthis began using anti-ship ballistic missiles fired from their territorial stronghold in northwest Yemen, as well as small boats and drones, to attack and even hijack merchant vessels in the Bab al-Mandab strait. The Houthi movement emerged from the mountainous northern region of Yemen, and their campaign has become a focal point for regional power dynamics. Funded and armed by Tehran, the Houthis claim the disruption is an economic lever to pressure Israel towards ending its operations in Gaza. 

Since the first strike on November 19th, the Houthis have launched over 57 attacks on military and civilian merchant vessels, in addition to firing drones and missiles at U.S. and British naval ships. The result is massive disruptions to global shipping; as of January, nearly 25% of international shipping capacity has or will be diverted from the Red Sea, according to an analysis from Flexport, a global logistics firm.

These maritime route changes have directly impacted the economies of East African countries that rely heavily on seaborne imports and exports through the vital artery of the Bab al-Mandab. In particular, the attacks have drastically cut activity at two vital regional ports: the Port of Djibouti and Port Sudan. For example, on January 19th, Denmark’s Maersk announced it was suspending booking to Djibouti from Asia, the Middle East, Oceania, East Africa, and South Africa. The situation has also had a tangible impact on all Red Sea shipping: roughly 150 ships sailed through the Suez Canal in the first two weeks of 2024, compared to 400 ships in the first two weeks of 2023.


 

Trade flows and foreign military bases in the region. Source: Authors

Decreased Maritime Trade Impacts East African Economies 

Trade with Europe and Asia is crucial for most economies of the Horn of Africa. As the conflict drags on, a continued decrease in economic activity could have severe implications across the region.

 

Trade Disruptions

The largest port in the Horn of Africa, the Port of Djibouti, is essential for Ethiopia, the second most populous country and the fifth largest economy in Africa. Land-locked, 95% of Ethiopia’s trade by volume moves via the Addis-Djibouti corridor (a World Bank infrastructure project), including $334 million in exports to the United States and $851.8 million to Europe, according to Trading Economics. Yet, rising shipping costs will make Ethiopia’s exports more expensive and less accessible, depressing overall economic growth.

The region’s other central trade hub, Port Sudan, remains equally vulnerable to shipping disruption. According to S&P Global, nearly 90% of Sudan’s $11 billion in exports and 30% of Sudan’s GDP flow through the port, most of it gold or oil bound for Middle Eastern or Asian markets through the Bab al-Mandab. Additionally, the port is the gateway for food and imports headed to South Sudan, Chad, and the Central African Republic, all poor and fragile states currently experiencing civil wars and humanitarian crises.

Food Insecurity

The past three years have yielded record lows in rainfall throughout East Africa, and the resulting drought has affected 26 million people. East Africa relies heavily on wheat shipments from Ukraine and the European Union (E.U.) through the Red Sea to supplant domestic production. Djibouti and Somalia import all their wheat supply, while Kenya and Sudan are also heavily dependent, importing 86% and 77% percent, respectively.

The global wheat trade is already under strain. Russia’s invasion has destroyed crop production in Ukraine, while its blockage of Black Sea shipping has reduced export volume, both of which have resulted in volatile prices. Insurance premiums are set to spike for freighters who continue to sail through the Strait, while those who re-route around the Cape of Good Hope face higher fuel and overall transit costs. In either scenario, East African consumers will likely face increased prices on a critical food supply.

For fragile countries in the greater region, such as Chad or South Sudan, disruption to overland imports from maritime trade adds additional strain on a dismal food outlook. The IPC acute food insecurity scale lists many East African nations as “crisis,” but below-average wheat imports or higher prices could push the region into “emergency” - indicative of malnutrition between 15% and 30% of the population. Houthi interference also threatens the movement of humanitarian assistance bound for destinations beyond the Horn of Africa, a concern highlighted in a Joint Statement on Houthi Attacks made by the U.S., E.U., and NATO leadership in December. 

The direct effect of the Red Sea conflict on East African markets is clear. As the Bab al-Mandab Strait remains too dangerous, African economies with no alternative trade routes will suffer. Such disruption in a fragile region will likely destabilize development and governance.

 

Economic Pressure Could Fuel Regional Security Concerns

The economic pressure from impeded trade flows and inflated prices could aggravate current hostilities or spark the outbreak of suppressed conflicts.

Ethiopia-Somalia-Somaliland

Amid recovery from a brutal civil war in the northern region of Tigray, Ethiopian Prime Minister Aiby Ahmed is pivoting towards bolstering the economy through increased exports. Since losing its own Red Sea access when Eritrea gained independence in 1993, Ethiopia has relied on the Port of Djibouti for maritime trade. However, this arrangement costs $1.5 billion in fees annually. A hefty price tag and the Houthis' disruptive actions amplify Ethiopia's urgency to find alternative, more economical port access.

On January 1st, Abiy signed a treaty with the leader of the semi-autonomous Somaliland region, Muse Bihi Abdi. The deal allows Ethiopia access to the port of Berbera and 20 km of coastline, where Aiby plans to construct an Ethiopian naval base. Although expected operating fees remain unknown, they are presumed to be lower than those Djibouti charges.

The deal with Somaliland heightens regional tensions. As part of the agreement, Ethiopia promises to recognize the break-away region as an autonomous country. It would be the first formal international recognition of Somaliland since the region announced its independence from Somalia in 1991. This move has evoked criticism from the Somali government in Mogadishu, which does not recognize Somaliland’s independence and views the leased land in the agreement as its sovereign territory.

 

Sudan

In contrast to Ethiopia, Sudan’s civil war is still raging. According to the International Food Policy Research Institute, the conflict has shrunk Sudan’s economy by nearly half. Disrupted maritime trade will only exacerbate increasing competition over scarce resources between the two warring parties: the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF). Although the SAF maintains control of Port Sudan (and its flow of resources, aid, and profits), recent victories for the RSF have brought speculation about an impending campaign to secure the port – whether by RSF main forces or local tribal militias who resent the government in Khartoum.

Both sides in the war rely on trade through the Bab al-Mandab. The SAF’s control of Port Sudan’s exports is a source of revenue. Vital aid shipments have been diverted to alternate shipping routes or for air freight, increasing costs and delivery times and leading to significant shortages of medical and food supplies. The RSF finances much of its operations by selling gold mined in territories under its control. The gold is then shipped through the Bab al-Mandab to the UAE before heading around the world, so disruptions in the Strait could slow the RSF’s main funding channel.

 

Regional and Global Players with Interests in East Africa

Framing the Houthi’s actions within a larger “Middle East Crisis” reflects that for regional and global stakeholders, disruption of Red Sea trade is only a part of their strategic calculus to the area. However, the economic, political, and humanitarian effects in East Africa stemming from the attacks in the Bab al-Mandab may tip the scales and influence broader policy changes from Gulf Nations, Russia, China, or the United States.

Saudi Arabia has long backed the SAF and invested heavily in the Sudanese economy – namely in infrastructure, agriculture, and mining. Riyadh brokered a short-term cease-fire in Sudan last year, likely to secure Sudanese food imports on which Saudi Arabia relies. Prolonged instability in Sudan jeopardizes the Kingdom’s Vision 2030 projects, such as Red Sea Global, while victory for the RSF would be a win for one of its regional competitors, the UAE.

Although partner to Saudi Arabia in the battle against the Houthis in Yemen, the United Arab Emirates competes directly with Saudi Arabia in Sudan. The Emiratis plan to invest over $6 billion in the country, including building a rival Red Sea port. Along with Russia’s Wagner Group, the UAE supports the RSF to ensure access to gold exports, especially since the rebels took control of the Jebel Amer mines in North Darfur. The Houthi actions can be considered a boon for the Emiratis, as the SAF is affected more by shipping disruptions and because cargo bound for Sudan via the Strait has been diverted to Abu Dhabi or Dubai and then flown to Africa, boosting profits for the UAE.

Russia has penned a deal with Sudan’s government to build a naval base in Port Sudan. Yet despite the formal agreement between Moscow and Khartoum, Wagner and its allies in Libya are supporting the RSF, ensuring that Russia wins regardless of the conflict’s outcome.

China opened its first and only overseas military base in Djibouti in 2016 to secure its Doraleh Multipurpose Port and project power into the Bab al-Mandab. However, China has abstained from counter-Houthi operations, opting to stay neutral in the conflict. This move has resulted in vessels advertising their ties to China to win safe passage through the Strait, as the Houthis have not targeted ships flying Chinese colors.

The United States formally established Camp Lemonnier in Djibouti in 2003 to support “security, regional stability, and humanitarian efforts across the region,” according to the US Department of State. The American footprint in the country also includes the Chabelley Airport, the launch pointfor armed drones conducting strikes in Yemen and the greater region. With more than 5,000 troops stationed across East Africa and a few of its largest embassies on the continent, the U.S. has a vested interest in regional partnerships and stability to maintain its forward presence. 

Conclusion 

Policymakers should not think of the Houthi conflict only in terms of the Arabian Peninsula and the broader Middle East but also consider its effects on East Africa. A prolonged conflict in the Bab al-Mandab strait and decreased maritime trade risk severe economic repercussions for nations heavily reliant on ship-bound commerce. Additional economic instability can exacerbate regional tensions and risk a humanitarian crisis. When calculating involvement and solutions for the region in the wake of the latest Western-Houthi clash, international policymakers must take a holistic view of all the regional stakeholders – including the major African players on the other side of the Strait.

 

 

Statements and views expressed in this commentary are solely those of the authors and do not imply endorsement by Harvard University, the Harvard Kennedy School, or the Belfer Center for Science and International Affairs.

For more information on this publication: Belfer Communications Office
For Academic Citation:

Olsen, Nils and Jones, Grace.“ The Other Side of the Strait: The Strategic Significance of the Houthi’s Aggression for East Africa.” Belfer Center for Science and International Affairs, Harvard Kennedy School, March 6, 2024.

The Authors