NAIROBI: The Ethiopian government on Wednesday defended a controversial deal with the breakaway Somali region of Somaliland, saying no laws have been transgressed.
The agreement — which gives landlocked Ethiopia long-sought access to the Red Sea — has been condemned by the government in Mogadishu as an “aggression” and a “blatant assault” on its sovereignty.
Somaliland declared independence from Somalia in 1991, a move not recognized internationally and staunchly opposed by Mogadishu although in reality the central government exercises little authority over the region’s affairs.
The memorandum of understanding signed in Addis Ababa on Monday gives Ethiopia a military base and access to commercial maritime services on the Red Sea.
Somaliland’s president Muse Bihi Abdi said in a statement that in exchange, Ethiopia would “formally recognize” Somaliland, a former British protectorate of about 4.5 million people.
But the Ethiopian government has not confirmed this.
In a statement on Wednesday it said the deal “includes provisions for the Ethiopian government to make an in-depth assessment toward taking a position regarding the efforts of Somaliland to gain recognition.”
The deal has infuriated the government in Mogadishu, which has vowed to defend its territory “by any legal means” and also recalled its ambassador in Ethiopia.
But the Ethiopian statement said: “No party or country will be affected by this MOU. There is no broken trust nor is there any laws that have been transgressed.”
It said that even though Somaliland has not been fully recognized, it has nevertheless signed agreements with various countries, including for port development.
“Yet there has been no murmur or complaint when this materialized,” it added.
The deal was signed several months after Ethiopian Prime Minister Abiy Ahmed said his country, Africa’s second most populous, would assert its right to access the Red Sea, sparking concerns among its neighbors.
Ethiopia was cut off from the coast after Eritrea seceded and declared independence in 1993 following a three-decade war.
Addis Ababa had maintained access to a port in Eritrea until the two countries went to war in 1998-2000, and since then Ethiopia funnels most of its trade through Djibouti.
Ethiopia’s economy has been constrained by its lack of maritime access, and the Berbera port in Somaliland offers a gateway to the Red Sea and further north to the Suez Canal.
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Ethiopia defends sea access deal with Somaliland
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Ethiopia defends sea access deal with Somaliland
- Somaliland declared independence from Somalia in 1991, a move not recognized internationally and staunchly opposed by Mogadishu although in reality the central government exercises little authority over the region’s affairs
Crash course: Vietnam’s crypto boom goes bust
HANOI: As a first-year computer science student in Hanoi, Hoang Le started trading crypto from his university dorm room, egged on by his gamer friends who were making a killing.
At one point his digital holdings swelled to $200,000 — around 50 times the average annual income in Vietnam.
But they crashed to zero when the bottom fell out of bitcoin and other cryptocurrencies in recent months.
Getting wiped out “hurt a lot,” he told AFP, but he also learned a valuable lesson: he has come to think of the losses as “tuition fees.”
“When profits were high, everyone became greedy,” said Le, now 23, adding that “it was too good to be true.”
Unlike neighboring China which has banned cryptocurrencies outright, communist Vietnam has allowed blockchain technology to develop in a legal grey area — barring its use for payments but letting people speculate unimpeded.
As a result the young-and-upwardly mobile country of 100 million has been at the forefront of crypto adoption, with an estimated 17 million people owning digital assets.
Only India, the United States and Pakistan have seen more widespread usage, according to a 2025 ranking by the consultancy Chainalysis.
But what once looked like first-mover advantage increasingly looks like a liability as investors stare down a crypto winter.
The price of bitcoin has almost halved since hitting a record high above $126,000 in October, and other digital tokens have slid even further.
Vietnamese crypto startups hawking everything from NFTs to blockchain-based lending and trading services have been hammered, with bankruptcies and layoffs roiling the industry.
$100 billion market
“Many companies have shut down because of this crisis,” said Tran Xuan Tien, head of Ho Chi Minh City’s blockchain association.
He added that others are “downsizing and conserving capital to extend their runway.”
Nguyen The Vinh, co-founder of blockchain firm Ninety Eight, told AFP his company has laid off nearly one-third of its staff since last year.
There was more “restructuring” to come, he added, given the gloomy outlook.
“The market will likely remain difficult for years, not just months, so we need backup plans.”
Until recently, Vietnam’s crypto scene was a wild west, with highly speculative ventures and outright Ponzi schemes flourishing alongside startups offering legitimate products.
The government warned about the dangers of crypto and broke up several huge scam operations, including one that allegedly swindled nearly $400 million from thousands of investors.
But it did not move to crush the industry as Beijing did, instead opening “a window for domestic businesses to experiment,” according to Tien.
Under top leader To Lam, who has pursued sweeping growth-oriented reforms, Vietnam has formally embraced the blockchain industry and is gradually asserting control over the estimated $100 billion market.
Last year it passed a law recognizing digital currencies, bringing them under a regulatory framework for the first time.
It came into effect last month but investors have questions about how it will be implemented.
Hanoi has also announced a five-year crypto trading pilot program, which will allow Vietnamese firms to issue digital assets.
But lingering regulatory ambiguity has kept many firms based in the country from formally registering there, opting instead to file paperwork in places such as Singapore and Dubai.
‘Downhill badly’
Vinh says some firms are folding and others downsizing or pivoting because of both the “prolonged downturn and an unclear legal framework.”
And new entities are struggling to gain traction as investor sentiment sours.
Huu, 24, said fundraising for his crypto-product startup has suddenly become much harder, and asked that only his first name be used for fear of hurting his business.
Foreign investors were once enticed by promises of 400 and 500 percent returns, he said, but were now discovering they “might lose everything.”
“Over the past few months, things have gone downhill badly.”
Founders including Huu and Vinh said the current downturn is part of a natural business cycle, and stronger firms would eventually emerge offering better products.
But that is cold comfort for the nearly 55 percent of individual Vietnamese crypto investors who according to one market analysis reported losses last year.
“In Vietnam, a lot of people trade crypto,” Huu said.
“When prices fall, people complain about losses and the overall mood becomes very gloomy.”
At one point his digital holdings swelled to $200,000 — around 50 times the average annual income in Vietnam.
But they crashed to zero when the bottom fell out of bitcoin and other cryptocurrencies in recent months.
Getting wiped out “hurt a lot,” he told AFP, but he also learned a valuable lesson: he has come to think of the losses as “tuition fees.”
“When profits were high, everyone became greedy,” said Le, now 23, adding that “it was too good to be true.”
Unlike neighboring China which has banned cryptocurrencies outright, communist Vietnam has allowed blockchain technology to develop in a legal grey area — barring its use for payments but letting people speculate unimpeded.
As a result the young-and-upwardly mobile country of 100 million has been at the forefront of crypto adoption, with an estimated 17 million people owning digital assets.
Only India, the United States and Pakistan have seen more widespread usage, according to a 2025 ranking by the consultancy Chainalysis.
But what once looked like first-mover advantage increasingly looks like a liability as investors stare down a crypto winter.
The price of bitcoin has almost halved since hitting a record high above $126,000 in October, and other digital tokens have slid even further.
Vietnamese crypto startups hawking everything from NFTs to blockchain-based lending and trading services have been hammered, with bankruptcies and layoffs roiling the industry.
$100 billion market
“Many companies have shut down because of this crisis,” said Tran Xuan Tien, head of Ho Chi Minh City’s blockchain association.
He added that others are “downsizing and conserving capital to extend their runway.”
Nguyen The Vinh, co-founder of blockchain firm Ninety Eight, told AFP his company has laid off nearly one-third of its staff since last year.
There was more “restructuring” to come, he added, given the gloomy outlook.
“The market will likely remain difficult for years, not just months, so we need backup plans.”
Until recently, Vietnam’s crypto scene was a wild west, with highly speculative ventures and outright Ponzi schemes flourishing alongside startups offering legitimate products.
The government warned about the dangers of crypto and broke up several huge scam operations, including one that allegedly swindled nearly $400 million from thousands of investors.
But it did not move to crush the industry as Beijing did, instead opening “a window for domestic businesses to experiment,” according to Tien.
Under top leader To Lam, who has pursued sweeping growth-oriented reforms, Vietnam has formally embraced the blockchain industry and is gradually asserting control over the estimated $100 billion market.
Last year it passed a law recognizing digital currencies, bringing them under a regulatory framework for the first time.
It came into effect last month but investors have questions about how it will be implemented.
Hanoi has also announced a five-year crypto trading pilot program, which will allow Vietnamese firms to issue digital assets.
But lingering regulatory ambiguity has kept many firms based in the country from formally registering there, opting instead to file paperwork in places such as Singapore and Dubai.
‘Downhill badly’
Vinh says some firms are folding and others downsizing or pivoting because of both the “prolonged downturn and an unclear legal framework.”
And new entities are struggling to gain traction as investor sentiment sours.
Huu, 24, said fundraising for his crypto-product startup has suddenly become much harder, and asked that only his first name be used for fear of hurting his business.
Foreign investors were once enticed by promises of 400 and 500 percent returns, he said, but were now discovering they “might lose everything.”
“Over the past few months, things have gone downhill badly.”
Founders including Huu and Vinh said the current downturn is part of a natural business cycle, and stronger firms would eventually emerge offering better products.
But that is cold comfort for the nearly 55 percent of individual Vietnamese crypto investors who according to one market analysis reported losses last year.
“In Vietnam, a lot of people trade crypto,” Huu said.
“When prices fall, people complain about losses and the overall mood becomes very gloomy.”
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