Djibouti, Gateway to East Africa
The Republic of Djibouti is a country of the Horn of Africa, located between Ethiopia to theNorthwest, Somalia to the Southeast and Eritrea to the Northwest and the Gulf of Aden to the East.
With a population of just under one million, Djibouti, whose capital bears the same name, is a republic occupying a prime geographical position because of its overlooking position on the Strait of Bab al Mandeb, which is one of the busiest shipping corridors in the world. In
2016, Minister Hassan Houmed Ibrahim in charge of trade and Small and Medium Enterprises said: "Djibouti enjoys a privileged geographical position between three continents: Africa, Europe and Asia". A very strategic crossroads, if we add to this that Djibouti shares with Ethiopia a market of more than one hundred million consumers.
Thanks to this enviable geographical position, Djibouti is positioned as a hub of maritime traffic and world trade. The country also has an economic and regulatory environment with significant investment benefits. We can mention in particular the development of its port
activity or its monetary policy focused on a currency freely convertible in fixed parity with
the US Dollar.
An encouraging economic situation
After a few years of gloom due mainly to the effects of the global economic recession, Djibouti has regained its economic dynamism before the crisis. Indeed, the country has experienced a level of economic growth more interesting than in 2016 with 6.5%, which is expected to consolidate and reach the 7% according to forecasts for the year 2017.
Sustained growth by the services sector, which is the most dynamic in the country with an estimated contribution to nearly 79.3% of the wealth of Djibouti. It is heavily dependent on port activity, which for its part relies heavily on Ethiopian imports (80% of this country’s imports go through Djibouti). The port sector is also very important in the development of the manufacturing and services sector, which relies almost entirely on it.
Trade and investment also contribute to GDP growth in Djibouti. Indeed, the country has important resources such as natural gas, zinc, copper, gold, iron and aluminum.
Djibouti is a republic under construction, which is based on a development strategy, entitled Djibouti Vision 2035, in order to make the country a middle-income state and a logistics and commercial center for East Africa.
One of the most modern port sectors in Africa
Due to its geographical position, Djibouti very early bet on the development and modernization of its ports. By the early 1980s, the port of Djibouti was already operational.The current situation of its neighbors today makes 80% of the activity of the port provided by the Ethiopian traffic.
Aware of the opportunities offered by the port sector, the state has implemented a policy of creation and modernization of its ports. For example, significant investments were made for the construction of the Port of Doraleh in 2008 and lastly for the Doraleh Multipurpose Port (DMP) inaugurated with great pomp in June 2017 on the eve of the celebration of the fortieth anniversary of Djibouti’s Independence Day , which is supposed to allow it to benefit more from its strategic position at the entrance of the Red Sea to become a regional trading platform.
The port, whose construction cost $ 590 million (€ 527.5 million), is part of a series of major new infrastructure, along with three other ports and the train linking Djibouti city with Addis Ababa, the capital of Ethiopia, inaugurated in October 2016. This new investment follows on from the first in Dubai Port World (DPW) at the Port of Djibouti in the early 2000s.
With the modern port complex of Doraleh and the other ports recently delivered such as the Port of Tadjourah in the north of the country and that of the Goubet in the center, the country strengthens its competitiveness compared with neighboring ports and positions itself as a strategic gateway entry to East Africa. The performance of its port sector is a benchmark in Africa with the example of the port of Djibouti, which experienced between 2004 and 2015 an increase in the number of containers received that only the port of Tanger Med in Morocco had witnessed. In 2015, the port achieved a 6% increase over the previous years, resulting in 15.5 million tones of goods passing through its docks.
Figures show the performance of the port sector in Djibouti and are continuing to progress and prospects are radiant.
Djibouti a safe Eldorado for foreign investors
Despite the tumults its neighbors have been through, the rise of terrorism and piracy in the region, Djibouti remains a relatively safe country. It is for this reason that foreign direct investment has continued to increase in recent years, particularly through the development of new strategic partnerships in the field of logistics infrastructure. This new collaboration, particularly with China, has enabled the investment of almost $ 14 billion (€ 12.2 billion) for the development of railway and port infrastructures.
In addition to China, the United States and France, Djibouti is attracting interest of many Western countries, as well as the interest of the Middle East.
The Republic of Djibouti is a natural gateway to the main countries of the sub-region. With a strategic plan to 2035, the country aims to revitalize its economy not only through the modernization of its infrastructures which already started, but also through the attraction of new investors to the country. To this end, a one-stop shop was set up in March 2017 to facilitate the formalities for investors. Djibouti, with its stable growth and the desire to modernize its transport infrastructure, has real assets to become the economic hub of East Africa.
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