Ethiopia and Eritrea sever diplomatic ties as northern fighting escalates

Ethiopia and Eritrea have severed diplomatic ties, a move that could have significant implications for the region. This escalation in tensions comes as fighting continues in northern Ethiopia, with both countries accusing each other of fueling internal conflicts. The situation is particularly concerning as it raises fears of a return to the devastating civil war that occurred between 2020 and 2022, resulting in an estimated 600,000 deaths. This deterioration in relations may impact regional trade and economic stability.

Why it matters

Ethiopia and Eritrea are escalating their conflict, which could lead to instability in the region. This instability may negatively impact investor sentiment and reduce investment in Ethiopian assets.

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