The agreement between Ethiopia and Somaliland creates a significant impact in the Horn of Africa region.

The defense minister of Somaliland, a self-declared republic, has resigned due to a controversial agreement with Ethiopia. Abdiqani Mohamoud Ateye stated that cabinet ministers should have been consulted about the deal, which involves leasing part of Somaliland's coastline to Ethiopia. Somalia, which considers Somaliland to be part of its territory, strongly objected to the agreement. The US and the African Union have called for calm and urged all parties to diffuse tensions. The exact details of the deal have not been disclosed, leading to conflicting interpretations. While the agreement is not legally binding, it is believed that Somaliland is willing to grant Ethiopia access to the sea for commercial traffic through a port. Additionally, Ethiopia's navy could lease a section of Somaliland's coast. In return, Somaliland would receive a stake in Ethiopia Airlines. However, the question of whether Ethiopia agreed to recognize Somaliland as an independent state remains unresolved. Somalia views any dealings with Somaliland without its approval as problematic and an infringement on its territory. The signing of the agreement prompted protests in Mogadishu, and Somalia's president vowed to defend the country by any means necessary. Somaliland declared independence from Somalia in 1991, though it has not been internationally recognized as its own country. If Ethiopia were to recognize Somaliland, it could have significant implications for the region. Ethiopia's access to the sea is considered crucial, as it is the most populous landlocked country in the world. Ethiopia has emphasized that its intentions are peaceful and that it does not seek war. The African Union and the US have expressed concern over the tension between Ethiopia and Somalia, while Turkey and Egypt have pledged support for Somalia.