Houthi-Saudi conflict threatens African economies via Red Sea chokepoint

In September, the conflict that has been grinding through Yemen for years suddenly acquired a new geography. Iran-backed Houthi rebels took control of Perim Island, a small piece of land that sits at the narrowest point of the Bab el-Mandeb Strait—the waterway that funnels traffic from the Red Sea into the Gulf of Aden and onward to the Indian Ocean. The island lies roughly twenty kilometers from Djibouti and a twenty-minute flight from Ethiopia. For the shipping companies that move goods through this corridor, the seizure was not an abstraction. It was a checkpoint now controlled by a force that had been firing on merchant vessels since the Gaza war began in 2023.

By early October, Yemen's armed forces and their Saudi allies had launched a counteroffensive to retake the island. But the damage to regional trade was already accumulating. Ships began paying nearly double their usual insurance premiums to pass through waters now deemed high-risk. Many captains chose to avoid the route altogether, adding weeks to journeys by detouring around the Suez Canal or down the southern tip of Africa. Those extra costs—for fuel, for fertilizer, for the raw materials that construction requires—would eventually reach consumers across the continent.

Djibouti, a Muslim-majority nation of just over a million people, sits at the entrance to the Red Sea and has become one of Africa's most strategically important pieces of real estate. The United States, China, France, Italy, and Japan all operate military bases there. The German Bundeswehr maintained a presence until 2021. The country's civilian ports function as transshipment hubs for global cargo, and so far the docks have not emptied. But the economics are shifting. Alessandra Roccasalvo, the UN Development Program representative for Djibouti, told reporters that the country was experiencing economic growth—the kind that normally requires cement, raw materials, building supplies. "Many ships no longer want to pass through the Suez Canal; many no longer want to pass through the Red Sea," she said. The money that would have flowed in is now staying away.

The human toll arrived almost immediately. According to the UN Refugee Agency, at least 3,700 people crossed from Yemen into Djibouti between September 10 and early October. Most were women and children. They landed in Obock, a region in the country's north that borders Eritrea and is characterized by extreme aridity. The UNHCR was preparing to assist another 10,000 people expected to arrive. But Obock has almost no groundwater. Everything—drinking water, water for sanitation, water for survival—must be desalinated, a process that requires resources a small country struggling with its own economic pressures can barely spare.

Ethiopia, the world's most populous landlocked nation, depends on Djibouti's ports for roughly 95 percent of its imports and exports. The higher insurance costs and shipping delays are hitting the country with particular force. Ethiopia had already endured months of scarcity from the blockade of the Strait of Hormuz, the chokepoint between the Persian Gulf and the Gulf of Oman, and had rationed fuel. Then, on September 23, fighting erupted in Ethiopia's northern Tigray region. The Ethiopian National Defense Forces reported gains against a Tigray-led rebel coalition, but the conflict briefly threatened the main corridor used to move goods between Djibouti's ports and the Ethiopian interior. As long as that fighting continues, the risk of another trade blockade remains real.

The regional picture grows more complicated when you add the historical grievances. Ethiopia and Eritrea have severed diplomatic ties. Ethiopia's Prime Minister Abiy Ahmed has repeatedly alluded to a long-standing resentment: Ethiopia has been landlocked since Eritrea's independence, and Abiy has suggested that this injustice might be rectified either through negotiation or by force. The port of Assab, located on the edge of Eritrea's territory, is widely seen as the most likely target if Ethiopia chooses military action. Experts have also flagged a potential collaboration between the Shiite Houthis and Al-Shabab, the Sunni terrorist group based in Somalia. Their ideologies differ fundamentally, but both are united by hostility toward Israel and the United States.

In mid-September, three African nations serving as non-permanent members of the UN Security Council—the Democratic Republic of the Congo, Liberia, and Somalia—held an emergency meeting and called jointly for free shipping lanes and a UN-led resolution to the Yemen crisis. But the tools available to African countries remain limited. Some economies may find unexpected opportunity in the disruption: ports in Kenya and Tanzania are becoming increasingly attractive as alternative transshipment hubs. Nigeria's Dangote Group has announced plans for a new refinery in Kenya. For now, though, the continent is absorbing the costs of a conflict that is not its own, and the risk of further escalation—whether from Ethiopia's regional ambitions, from deeper Houthi-Al-Shabab coordination, or from the simple fact that desperate people are still crossing borders—remains very much alive.