The memorandum of understanding was for the leasing of 20km (12 miles) of Somaliland’s sea coast to landlocked Ethiopia. In exchange, Somaliland will receive shares in its neighbour’s flagship carrier, Ethiopian Airlines – and receive formal recognition as a sovereign state.

International recognition has been a long-sought goal for Somaliland, a region in northern Somalia that has enjoyed de facto independence since 1991. But the groundbreaking agreement has created shockwaves in the region and fury in Somalia, which views it as a hostile violation of Somalia’s sovereignty.

“As a government, we have condemned and rejected the illegal infringement of Ethiopia into our national sovereignty and territorial integrity yesterday,” Somali President Hassan Sheikh Mohamud said in a statement on X shortly after convening an emergency cabinet session on Tuesday. “Not an inch of Somalia can or will be signed away by anybody.”

In Ethiopia, where for much of 2023 the government stressed the economic need for a seaport and even subtly hinted at possibly invading Eritrea for access to the Red Sea, the deal is being portrayed as a victory.

But the terms of that victory differ for Ethiopia and Somaliland, and that could further complicate the situation in the coming days.

While Somaliland insists that recognition has already been agreed upon and settled, Addis Ababa has been reluctant to firmly address the matter of statehood. In a published communique, the government said it had yet to formally recognise Somaliland. But social media posts by Ethiopian Ministry of Foreign Affairs official Mesganu Arga this week appear to support Somaliland’s interpretation of the deal.

The ambiguity of the messaging continues to fuel speculation. A draft of the agreement has yet to be published, but all indications suggest that it would all but nullify a 2018 tripartite treaty cementing ties between Ethiopia, Somalia and Eritrea, details of which were similarly never made public.

Pressure or patriotism?

Ethiopian officials have been far more eager to speak of the benefits the agreement is said to have secured.

“The agreement is mutually beneficial, and Ethiopia will share military and intelligence experience with Somaliland, so the two states can collaborate on protecting joint interests,” Redwan Hussein, Abiy’s national security adviser, said at the event announcing the agreement. “To facilitate this, Ethiopia will establish a military base in Somaliland as well as a commercial maritime zone.”

Abiy hopes the agreement can help kick-start Ethiopia’s revival after a year of worsening economic woes, internal conflicts and a breakdown in relations with Eritrea. Since the signing of the two countries’ widely heralded peace treaty in 2018, which helped Abiy land the Nobel Peace Prize a year later, Ethiopia has been keen to redirect its imports to Eritrean ports.

But this has never materialised.

“Previously, Abiy had cultivated a personal relationship with [Eritrean President] Isaias Afewerki for access to the Red Sea, but the Pretoria agreement has seen it stumble,” author and researcher Mohamed Kheir Omer explains, referring to the 2022 mediated peace process that ended Ethiopia’s war in its northern region of Tigray. Eritrea, whose troops were allied with Ethiopia in that conflict, opposed the deal.

Domestically, conflict with Faro militiamen in Amhara and unrest in Oromia has weakened key support bases for Abiy. Failure to make payments on Ethiopia’s eurobonds at the end of 2023 has also heightened pressure on the prime minister.

So there are whispers in the Horn of Africa and in foreign circles that he has turned to the popular move of getting port access for Africa’s second most populous nation to shore up his support.

There are also domestic woes in Somaliland, which has known relative stability for decades. The enclave is struggling with an uprising by local clan militia who pushed its forces out of the disputed town of Las Anod in August.

That conflict is seen as a blow to Somaliland’s hopes for recognition, which had been pinned on maintaining stability in a functioning state. But some observers said it is unclear if the conflict factored into Bihi’s decision to sign the agreement in Addis Ababa.

“It would be too speculative to link the agreement to Somaliland’s current domestic issues, considering its persistent pursuit of international recognition since 1991,” Muhammad Abdi Duale, founder and senior editor of the Somali news portal Horn Diplomat, told Al Jazeera. “Somaliland … established diplomatic ties with Ethiopia long before the port deal was announced.”

Ethiopia’s quest for a port

Diplomatic ties between them date back to the 1980s when Ethiopia supported Somaliland rebel fighters who helped win its de facto independence in 1991, the same year Ethiopia became landlocked after Eritrea’s successful war of independence.

Ethiopia continued to use Eritrea’s Red Sea ports until the two states severed ties and fought a 1998-2000 border war, which killed 70,000 people.

Since then, Ethiopia has used Djibouti’s port as its main trade conduit, but the billions Djibouti is believed to charge Ethiopia annually in port fees has had it exploring alternatives in Sudan, Somaliland and Kenya since the mid-2000s.

Agreements between Ethiopia and Somaliland over the use of its Berbera port date as far back as 2005, but issues including logistics and potential harm to relations with Mogadishu have prevented Addis Ababa from implementing a wholesale shift from Djibouti.

In 2017, Ethiopia acquired shares in Berbera port as part of a deal involving Emirati logistics management company DP World to expand the port and turn it into a lucrative trade gateway catering to the needs of 119 million Ethiopians. At the time, Somalia denounced the deal as illegal. Ethiopia did not follow through on commitments and eventually lost its stake by 2022.

Despite this history and the generally warm relations between authorities in Addis Ababa and Hargeisa, Addis Ababa had never openly considered granting Somaliland full recognition.

Even now, Redwan has stressed that the agreement signed this week is only a starting point for negotiations – with no specified timetable – that would require extensive deliberations and approval of both parliaments.

Nevertheless, the possibility of Ethiopia becoming the first state to formally acknowledge Somaliland’s independence threatens to damage diplomatic relations between Ethiopia and Somalia, two states with a lengthy history of military conflict and animosity.

A new strain in relations

After Somali independence in 1960 and until the end of the Cold War, the status of Ethiopia’s Somali region, its second largest by area, has been hotly contested between the two countries.

The region, also known as Ogaden, is home to ethnic Somalis, who make up about 7 percent of Ethiopia’s population. It has witnessed numerous conflicts. One was the Ogaden War from 1977 to 1978, which killed tens of thousands of people before Ethiopia, with the assistance of Soviet military advisers and Cuban troops, reasserted dominance over the land.

Under the governments of Ethiopia’s Mengistu Hailemariam and Somali President Siad Barre, both countries supported rebel factions in each other’s countries, which would go on to weaken and eventually lead to the overthrow of both leaders by 1991.

Somalia has never regained the stability it knew during the Barre era. Swathes of the country currently are under the control of fighters from al-Qaeda offshoot al-Shabab.

A considerable segment of Ethiopian troops has been part of the African Union peacekeeping mission mandated to fight the rebels in Somalia. Their semi-permanent presence in the country since 2006 has fuelled further resentment.

So Monday’s agreement has only further strained fragile relations between the neighbours.

“This is by far the most egregious violation of the sovereignty of Somalia by a foreign country in about a decade and a half,” Abdi Aynte, a Somali politician and former minister of planning, told Al Jazeera. “The last country to have violated Somalia’s sovereignty was Ethiopia when it invaded in 2006, which ended disastrously. [The 2006 invasion] in fact led to the rise of al-Shabab, the most violent militant group in the region, so you can only imagine what this could do in Somalia and across the region.”

Another politician, lawmaker Abdirahman Abdiskakur, has called for the African Union’s headquarters to be moved away from Ethiopia, according to the Somali National News Agency.

With military action unfeasible, Somalia will likely use formal diplomatic channels at the AU or United Nations to prevent any implementation of the agreement. Thus far, the European Union and the United States have issued statements expressing support for Somalia’s position.

The stance of other influential players in the region isn’t as clear yet.

“It’s possible that the UAE, which has cordial relations with both Ethiopia and Somaliland, may have encouraged the parties to proceed with the deal,” Mohamed explained. “The UAE is ambitious to have presence in ports along the Red Sea, Gulf of Aden and the Indian Ocean. With the Rapid Support Force [paramilitary] it supports gaining ground in Sudan, the UAE may be keen on consolidating its gains in the region.”

Meanwhile, Israel’s bombardment of the Gaza Strip has had a ripple effect, including most recently, Houthi rebel attacks on ships in the Red Sea, impacting the strategic Bad al-Mandeb Strait.

With both areas just off Somaliland’s coast, the New Year’s Day agreement in Addis Ababa could set off more than just economic activity in Ethiopia’s latest quest for a seaport.