President Bihi Abdi said as part of the agreement, Ethiopia would be the first country to recognize Somaliland as an independent nation in due course.

The MoU paves the way to allowing Ethiopia to have commercial marine operations in the region by giving it access to a leased military base on the Red Sea, Abiy's National Security Adviser Redwan Hussien said.

Somaliland would also receive a stake in state-owned Ethiopian Airlines, Hussien said, without providing further detail.

Somaliland has not gained widespread international recognition despite declaring autonomy from Somalia in 1991. Somalia says Somaliland is part of its territory.