The Eritrean–Ethiopian War was one of the major conflicts in the horn of Africa between Ethiopia and Eritrea from May 1998 to June 2000, over the disputed town of Badme.

It led to hundreds of millions of dollars wasted on the war; casualties and people who suffered numbering tens of thousands; and only minor border changes.

Following the formal declaration of peace signed by both countries on 9 July 2018, the stage is set for a new era of harmonious relations and both countries stand to benefit from closer ties.

Here are some of the positives we have seen from the countries’ resumption of positive relations.

Commercial Impact

As they no longer need to prioritise millions for border patrols or acquiring and updating military equipment for a looming fear of war, both governments have been able to reallocate funds to infrastructural pursuits.

With a real GDP growth rate of 10.9% in 2017, Ethiopia has been one of the fastest-growing economies in sub-Saharan Africa over the past decade. Eritrean companies are benefiting from increasing their services to Ethiopia’s larger market and its economic momentum.

Prior to the declaration, land-locked Ethiopia spent over $1.5 billion annually to use Djibouti’s ports. Now, Ethiopia uses the Red Sea ports in Assab, in the south of Eritrea, and in Massawa in the north tax-free.

Before its conflict with Eritrea, Ethiopia was involved in 90% of business at Assab – one of Eritrea’s primary ports – and the loss of revenue following the conflict has negatively affected Eritrea’s business activity. Despite the UAE Navy’s lucrative use of the port in 2015, activity at Assab has only become consistently lucrative since after 2018’s declaration, because its proximity to Addis Ababa makes it an attractive route for Ethiopian trade.

The resolved conflict has also encouraged the interest of foreign investors. Italy’s recent agreement to fund a feasibility study for a 450-mile railway between Massawa and Addis Ababa is a positive prospect for both economies.

Because of the strong appetite for investment from the Gulf states, Russia and China, Eritrea has began to develop the infrastructure of its ports in Massawa and Assab. With millions already pledged to this project, these ports will have significantly more capabilities to hold more trade traffic in future.

Political Impact

There have also been positive political impacts as a result of the new-found peace.

The Ethiopian government has given higher education a central position in its much lauded strategy for social and economic development, to be realised in 2020. With this formal recognition of peace, many are hopeful that Ethiopian youth will now consider higher education as seriously as military service, when leaving mandatory education.

Long-standing and economy-crippling United Nations sanctions were lifted from Eritrea in 2018.

The Ethiopian embassy has been reopened in Eritrea’s capital Asmara.

Previously, the Eritrea-Ethiopia rivalry contributed greatly to security issues across the region, including Eritrea’s strained relationships with Djibouti and Sudan, and Ethiopia’s tensions with Egypt and Somalia. The region’s growing stability is now providing tremendous prospects for regional security, foreign investment and national integration.

Affect on other African countries

The peace is undeniably having a positive effect throughout the horn of Africa. Over the last few months, the horn of Africa has seen negotiations and reconciliation and the start of processes of normalisation between Eritrea and neighboring countries Kenya, Djibouti and Somalia.

The long-term prospect of Eritrean ports could dent Djibouti’s share of Ethiopian exports and lead to positive competition between ports in these countries. The availability of alternative port options can make the market more dynamic by increasing competition, thereby creating a better business environment for the area.

Such a development could improve Djibouti, in the long-run. By detracting from Djibouti’s geostrategic value as the region’s primary trading and logistics hub, Eritrea can expose the country’s overdependence on port infrastructure, forcing it to diversify its economy.

Lastly, the Eritrea-Ethiopia reconciliation can also be a positive example for other African nations.

Earlier this month, the leaders of both countries travelled to South Sudan for high-level talks with President Salva Kiir to discuss ways to strengthen the South-Sudanese peace process and help revive a struggling peace deal struck last year between his government and rebels.

Hopefully, their own reconciliation can lead to a Sudan South-Sudan reconciliation in the future.


The effects of the Ethiopia-Eritrea conflict raged on for 20 years despite the mediation efforts of many African and extra-continental countries, and a peace agreement being signed in 2000.

However, on 5 June 2018, the Ethiopian government – under new prime minister Abiy Ahmed – unexpectedly announced that it fully accepted the terms of the 18-year-old peace Agreement signed in Algiers.

Ethiopia also announced that it would accept the decision of the 2002 UN-backed Eritrea-Ethiopia Boundary Commission ruling which awarded Badme to Eritrea.

Eritrean President Isaias Afwerki welcomed the positive changes. And the thaw in hostilities saw Eritrea’s Foreign Minister, Osman Saleh, lead the first Eritrean delegation to Ethiopia in almost two decades when he visited Addis Ababa in late June 2018.

In July 2018, at a summit in Asmara, Isaias Afewerki and Abiy Ahmed signed a joint declaration formally ending the state of war between Ethiopia and Eritrea.


For Eritreans, Ethiopians and all Africans alike, hopefully this peace is long-lasting. For Ethiopia, it is an excellent opportunity to focus squarely on its treasured strategy for social and economic development; while for Eritreans, it is a chance to realise the promises of democracy that were the foundation of the three-decade-long struggle for independence from Ethiopia.