By Li Ruohan in Djibouti -Mareeg.com-Local artists perform before the opening ceremony of the Djibouti International Free Trade Zone on July 5. Photo: Li Ruohan/GT
Though one of the smallest countries in Africa, Djibouti is aiming to become the shipping, trade and business center of the continent, or the “Dubai of Africa,” with ambitious projects co-developed by Chinese investors.
However, whether the country, whose unemployment rate fluctuates around 40 percent, could be an ideal destination for foreign investors, remains unsure, said analysts.
Since July 5, more than 20 local and foreign companies began to open offices in the Djibouti International Free Trade Zone (FTZ), and more than 30 other companies are in negotiations. Among them is the Yemen-based Al-hashedi company, which plans to open a warehouse that is around 2,000 square meters in the FTZ this month.
“The free trade zone is creating shortcuts for businesses,” Mouad Abdulwahab Al-Hashedi, general manager of the Yemen-based company, told the Global Times on Wednesday.
Investors from multinational companies are more secure when business is conducted in a multi-cultural environment and is free from political issues, he said, explaining the appeal of the FTZ.
The zone’s first phase, a 2.4-square-kilometer area that includes a logistics park, an area for processing export products and a services center, began operating earlier this month, while the rest of the 48-square-kilometer zone which will make the FTZ the largest of its kind in Africa, is under construction.
The FTZ comes with high expectations from the local government, as part of the government’s ambition to transition from a military center to a business hub. Chinese companies, which are also eyeing the country due to its strategic position for the Belt and Road initiative, are one of the most wanted investors.
“The FTZ makes it easier for Chinese companies to set up businesses closer to where their customers are. It also makes it easier for customers to conduct business without physically going to China,” said Dawit Michael Gebre-ab, senior director of Strategic Planning for the Djibouti Ports and Free Zones Authority.
The sooner the companies enter the FTZ, the closer they will be to African clients, and the greater market share they will gain in the fast growing Africa continent, Gebre-ab told the Global Times.
Political, military influences