Policies

Foreign Policy

Since independence from France in June 1977, Djibouti maintains a neutral political position in the Horn of Africa. The focus of its foreign policy is on strengthening relations with Arab countries and Ethiopia. It is a member of the League of Arab States and the OIC. Djibouti plays an active role in enhancing and promoting peace and stability and the peaceful resolution of conflicts in the region.

Economic Policy

Djibouti’s location is its main economic asset. The Port of Djibouti is strategically located at the crossroad of sea routes between Far East, the Arabo-Persian Gulf and Africa. It is the maritime outlet of the Horn of Africa and has therefore served as an important entrée pot and transshipment point for the region’s landlocked countries. Djibouti has focused on the service industry for the development of its economy. In order to strengthen the competitiveness of the Port of Djibouti, the management contract for both Port and Airport has since June 2000 been given to Dubai International Ports for 20 years for control of day-to-day management.

Djibouti initiated a comprehensive reforms programme in 1996 with the assistance of the World Bank, the IMF and the French. In 1999 the initiative “Poverty Reduction and Growth Facility (PRGF)” was introduced aimed at poverty reduction and linked to targets set by the IMF.

Djibouti is a member of the UN, NAM, OIC, Arab League, AU, NEPAD, IGAD, COMESA, EU-ACP, IMF, WTO, ADB, IFAD, UNCTAD and others. Major Industries, global companies, etc.

The Port of Djibouti, located at the crossroad of three continents provides an important transshipment point for landlocked countries in the Horn of Africa and for ships transiting through the Port. The Port is central to the economy of Djibouti. It is the main entrée pot for the Ethiopian cargo.

The 781 kms Ethio-Djibouti rail link is being overhauled through a Concession Project and a Project for Rehabilitation/Upgradation. The Doraleh Project located 8 kms east of the Sea Port is being developed for third generation container ships. It will include an Oil Terminal, a Container Terminal, an Oil Refinery, an Industrial and Commercial Free Zone and a Bulk Terminal. The first phase of the project, that is, the Oil Terminal, is expected to complete by May/June 2005. The project include jetty for tankers, building of 20 storage tanks to store fuel oil each of around 50,000 cubic meters capacity. A Brazilian company is involved in the construction of the Berth and an Italian company is involved in the construction of storage tanks.

Significant economic activities:

The economy is dominated by the service industries, which represent about 82 % of the GDP. The services are centered on the Port, Railway, Civil Service and the French and American Military Garrison. Primary industry contributes only an estimated 2% and extensive rearing is practiced. The secondary sector including power and water contributes a little over 16% with manufacturing activities of a little over 2%. The modernization programme of the Port of Djibouti includes the acquisition of handling equipment for Container Terminal, creation of a Dry Port and the installation of a new complete computer system for the Container Terminal. The Container Terminal would therefore be able to handle approximately 350,000 TEU (20 ft container)/year. The Bulk Terminal and the project of the Port of Doraleh are also expected to change the picture of the region.

Total Imports-Exports of Djibouti for all countries

Source: EIU

Trade 2003: Main Trading Partners

Direction of External Trade 2003: Main Trading Partners

Source: EIU

Investment highlights

The Government of Djibouti has initiated structural adjustment programmes which include liberalization of the transportation and telecommunication sectors by opening up the Government-owned

Corporations to private capital

The Port and Airport of Djibouti have been given to Dubai Port International on a management contract for 20 years in order to boost efficiency and attract foreign investment.

Djiboutian laws favour domestic and foreign investment without any restrictions or fear of nationalization. There are no exchange restrictions and the Djibouti Franc pegged to the US dollar is freely convertible.

In addition to being the maritime outlet of the Horn of Africa to the Indian Ocean and the Red Sea, Djibouti has also the potential to become the gateway to COMESA free trade area with potentials for access to a market of more than 340 million consumers of COMESA member countries.

The Djibouti Dry Port located 2.1 kms from the Sea Port has a total area of 40 ha. It has a containers storage capacity of 1,600 TEU, an area for vehicles storage of 32,000 sq. m.. It also has a warehouse of 6,900 sq.m. for the storage of containerized cargoes enabling quick return of empty containers to the Lines. In addition, in the vicinity, there is a parking zone for around 100 trucks that are waiting for loading/unloading.

The Container Terminal is also being managed efficiently through COSMOS software that puts in place a Container Terminal Control System (CTCS) which allows an integrated system of management control of all administrative and operational activities. This enables the customer to obtain quick information about the position and status of his/her container through internet at any time.

The project of the Port of Doraleh, at the locality of Doraleh, located 8 km to the East of the Sea Port is being developed with the following facility:

Developed facilities:

• An Oil Terminal with storage capacity of 200,000 t in the first phase and 400,000 to 450,000 t in the second phase;
  
• A Containers Terminal offering 16 m of depth able to accommodate the largest container ships, backed by a storage yard of 700,000 sq. m.
  (400,000 sq. m. in the first phase and 300,000 sq. m. in the second phase).