Keypoints:
- Emirati investment in Ethiopia symbolised by a vast new palace in Addis Ababa
- Riyadh pushes back as Abu Dhabi deepens ties across the Horn
- Analysts warn Gulf power plays could trigger a wider regional war
FROM a breezy ridge above Addis Ababa, the skyline is being rewritten. Cranes circle a sprawling new presidential palace rising from raw concrete, its scale audacious even by the standards of a fast-growing capital. Funded by the United Arab Emirates, the project gleams like a statement carved in stone: money now shapes power in the Horn of Africa.
The palace is far more than a vanity build. It has become a visible emblem of how rival Gulf monarchies are remapping politics across the Horn — a fragile, strategically priceless region — as Abu Dhabi and Riyadh compete through cash, ports, security deals and proxies, with escalating risks of a broader conflict.
A contested corridor
The Horn — Ethiopia, Somalia, Djibouti and Eritrea — sits astride shipping lanes linking the Suez Canal to the Indian Ocean and lies just across the Red Sea from the Arabian Peninsula. Whoever holds sway here holds leverage over global trade.
Speaking to AFP, regional specialist Anna Jacobs said the contest has moved from quiet diplomacy to open rivalry. ‘For Gulf states, the Horn of Africa is a crucial battleground for geopolitical and geo-economic competition,’ she warned, noting that ports and airfields now matter as much as armies.
Emirati reach and backlash
Among Gulf players, the UAE has built the most visible — and most criticised — presence. In Sudan’s brutal civil war, Abu Dhabi is widely accused of backing the Rapid Support Forces (RSF) paramilitary group in Sudan, allegations it formally denies.
In Somalia’s breakaway region of Somaliland, Emirati logistics giant DP World has poured hundreds of millions of dollars into Berbera’s deep-water port and airstrip, operating them with scant regard for Mogadishu’s authority. Many analysts believe Abu Dhabi quietly encouraged Israel’s December move to recognise Somaliland — the first state to do so — a diplomatic shock that upended regional politics.
Jacobs described that recognition as ‘a high-risk attempt to redraw the regional order’, one that has deepened resentment across the Horn.
Saudi counter-moves
These manoeuvres have sharpened tensions with Saudi Arabia, once Abu Dhabi’s closest partner. The two monarchies fought together in Yemen from 2014, but now back opposing factions.
Last month, Riyadh struck what it said was an arms shipment bound for Yemen that originated from the UAE — a rare and pointed rebuke.
Traditionally, Saudi policy in the Horn focused on propping up existing governments. That stance has shifted. Riyadh is now actively countering Emirati influence through new security alignments.
There are credible reports of a trilateral military arrangement in the works between Saudi Arabia, Egypt and Somalia aimed at balancing Abu Dhabi’s reach. In a dramatic signal, Somalia cancelled all existing agreements with the UAE last month.
Ethiopia in the crossfire
Ethiopia, with around 130 million people, has become the biggest prize in this rivalry. Shortly after Abiy Ahmed took office in 2018, the UAE extended a $3bn loan. In 2023, Abu Dhabi followed with an $800 million currency swap to stabilise Ethiopia’s economy.
The scale of Emirati investment — symbolised by the new palace — has led some to question Addis Ababa’s autonomy. Former CIA analyst Cameron Hudson told AFP that Ethiopia risks becoming ‘effectively a vassal state’ of Gulf interests.
Tensions spiked in December when Sudan’s army accused Ethiopia of hosting a training base for the RSF, implying Emirati financing. Addis Ababa declined to comment when contacted by AFP.
Fault lines and flashpoints
Gulf cash is flowing into a neighbourhood already riven by rivalry. Ethiopia’s relations with Eritrea have soured, while Cairo remains furious over Addis Ababa’s mega-dam on the Nile.
In response, Egypt and Eritrea have drawn closer to each other — and to Saudi Arabia — in what many see as a loose anti-Emirati alignment.
Ethiopian researcher Biraanu Gammachu told AFP that the imbalance is perilous. ‘It’s an asymmetric relationship between emerging middle powers and donor-dependent states,’ he said. ‘Gulf influence in the Red Sea is sustaining instability, not solving it.’
Eritrea’s reclusive president Isaias Afwerki made two rare trips to Saudi Arabia in 2025 and publicly criticised the UAE’s ‘destabilising’ role in Sudan. Hudson warned that Asmara could be drawn deeper into the Sudanese war, dragging neighbours with it.
Why this matters
The cranes above Addis Ababa are not just building a palace — they are erecting a new political order in the Horn. Ports are turning into pawns, loans into levers, and alliances into flashpoints.
Unless Gulf competition cools, analysts fear today’s proxy battles could harden into a multi-state conflict spanning the Red Sea to the Nile.
For the Horn’s citizens, the question is stark: will this torrent of money bring stability — or pull the region closer to war?
