DJIBOUTI
SPECIAL ADVERTISING SECTION
DJIBOUTI A beacon for the region A business-friendly government, strategic location, and world-class port, make Djibouti an excellent prospect for companies wishing to tap Asian and African markets.
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he tiny desert nation of Djibouti, situated on the Horn of Africa, is easily the most politically stable country in the region and has its most liberal economy, thanks to the government of President Ismail Omar Guelleh and the Port of Djibouti, upon which the future of its 500,000 inhabitants largely rests. Indeed, the country largely exists because of the development of the port at the mouth of the Red Sea linking Europe and Asia, 111 years ago. “There is no Djibouti without the port. Everything revolves around it; it is the economy of the country, our portal to the world and provider of job opportunities,” says President of Djibouti Ports and Free Zones Authority (DPFZA) Abdourahman Boreh, a Djiboutian who realized the potential of the under-utilized installations whilst working in Dubai. In 2000, Boreh convinced one of the world’s biggest port operators, DP World, to embark on its first international venture, a 20-year operational concession, which has recently been increased to 30 years, and, since then, the port’s use and upgrades to its infrastructure have grown exponentially.
biggest container vessels for the next 30 or even 50 years. No-one else in the region will be able to match DP World’s investment.” Boreh’s plan is for Djibouti to act as a distribution hub for goods coming from the Far East in high-volume. “Importers can keep their goods in the free zone or under warranty and stored, while orders are placed in the U.S. or Europe and payment sent to Asia. Delivery from Djibouti will obviously be quicker as products will be closer to their market,” he says. Djibouti is also set to become a regional sales hub, beginning with second-hand vehicles via the Dahez project, an initiative which is seeing trade already passed from its previous hub in Dubai. “People from all over, especially from our neighboring countries, will be able to come here incurring far less expense on travel and hotels to buy trucks and cars,” says Boreh. “Customers will be able to find all makes here and we are also looking at the assembly of heavy trucks here too with companies like Iveco, which has shown interest. Again we are looking at a warranty system with big companies shipping here and stocking their
“The port is the economy of the country, our portal to the world, and a provider of job opportunities.” Abdourahman Boreh, President of Djibouti Ports and Free Zones Authority
At present, facilities include the original four-quay port, with the closest container terminal to Ethiopia and its 75 million inhabitants, and also one of Africa’s most efficient, Djibouti Free Zone, housing more than fifty multinational and national companies and managed by JAFZA, the world’s number one duty-free manager and the massive new development at nearby Doraleh. A new oil terminal has been operational since 2005 with a storage capacity of 370,000 cbm and two berths of 20 m water depth. A huge new container terminal was begun in 2007 in consort with Odebrecht and will already be operational by the beginning of 2009. The terminal will have a quay length of 1,050 m, 16 quays for general cargo, 18 m water depth, deeper than Africa’s currently largest port, Durban. The capacity will be 1.5 million TEUs (twenty-foot equivalent units) in the first phase and expanded to 2,000 m in a second phase with 3 million TEUs capacity. There will also be a new free zone, also to be managed by JAFZA. “When we open the first phase, our container capacity, already increased by 1,000%, will be filled in a year and we will begin on the second phase, which will make us bigger than any other port in Africa by far, including Durban,” says Boreh. “Unlike South Africa, we will also have the additional advantage of being on the route to Europe and America, apart from being able to attract the
goods whenever customers place orders and then delivering through the warranty. My intention is for Djibouti to excel in providing good services as we don’t have natural resources.” Besides the port’s natural and logistical advantages, the country also has the region’s most investor-friendly business climate by farCompanies are totally exempt from tax, duty taxes, patents and taxes on profit for 50 years and have the possibility of renewal. An investor can transfer capital freely, without having to pay customs duties. Free zone laws are the same as in Dubai. There is also minimal bureaucracy, as a company can be started within 24 hours of arrival in Djibouti, solely through the DPFZA. This one-stop shop registers businesses and can also organize visas or translation of documents. At Doraleh port, industrial, trading, general trading and services licences are available and a free zone establishment can be created with a single shareholder and U.S.$140,000 of capital, or a free zone company, with two to five shareholders and U.S.$10,000. Although Chinese investment in Djibouti to date has been limited to U.S.$92 million in desalination projects, Boreh is proud that he has pioneered Chinese products at Djibouti port and throughout DP World’s ports, with all cranes purchased from the Chinese ZMPC. Besides the obvious east-west transport links, 85% of Djibouti’s imports
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