DPFZA signs milestone agreement to make Djibouti key entry point to Africa on China’s New Silk Road

Djibouti sealed a deal with China to make the horn African country an entry point to the continent under the Chinese new initiative, New Silk Road. The Djibouti Silk Road Station Construction Strategic Cooperation Framework Agreement signed on January 25, 2015 by Aboubaker Omar Hadi, Chairman of Djibouti Ports & Free Zone Authority (DPFZA) and Hu Jinhua, Chairman of the Silk Road E-Merchants Information Technology Co. Ltd will expand the service based economy, Djibouti, the major logistics hub in the continent.
In the past few years that economic relation between Djibouti and China has shown significant growth milestone projects, which is the major sea port for Ethiopia.
A statement DPFZA sent to Capital indicated that the agreement will provide a unified customs system, which will improve enhance logistics efficiency and reduce costs for imported products; set up a payment settlement and clearing centre in Djibouti to ensure currency clearing for trade between China and Africa using Globebill payment solutions, and establish an O2O (online to offline) exhibition and trading centre in Djibouti, allowing potential customers in Eastern Africa to identify appropriate suppliers and then visit Djibouti based showrooms to finalize their transactions.
Creating an extensive data cloud computing platform in Djibouti through architecture of advanced cloud-computing; and establishing a Transit Trade Centre in Djibouti, including a commodity collecting and distributing centre, free trade zone and export processing zone for China-Africa trading have also included on the deal.
The DPFZA statement stated that a joint venture company, to be set up in Djibouti, will be tasked with implementing business operations, addressing policy issues and promoting the facility.
“DPFZA is taking forward its ambitious programme to make Djibouti the maritime and trade-hub centre for the whole of East Africa, linking the region to the global economy and stimulating trade and investment throughout the continent,” Aboubaker Omar Hadi said.
He says “The cooperation agreement further enhances Djibouti’s position as the foremost entry point to Africa on the New Silk Road. On top of our major infrastructure developments and upgrades, this agreement ensures that we will have a first-class IT infrastructure to match.” He further added “it will not only help us create new facilities, but also ensure that we can transport goods faster, smarter and more cheaply. We are on course to become Africa’s top Silk Road station.”
The Djibouti Silk Road Station is part of the “One Belt and One Road” (OBOR) initiative, launched by President Xi Jinping of China in 2013. China has announced plans to inject at least USD 62 billion to support the New Silk Road.
It will focus on creating new trading routes, links and business opportunities with China, passing through over 60 countries across Asia, Europe, the Middle East and Africa, covering a total population of about 5.1 billion, with total GDP of about USD 26 trillion.
The One Belt One Road project seeks to connect China’s main industrial cities with trading centres elsewhere in Asia, the Middle East, and Europe. The maritime Silk Road covers South East Asia and countries around the Indian Ocean.
In March 2015, DPFZA announced a major framework agreement with China Merchant Holding International to develop the Djibouti Free Trade Zone, covering an area of 48.2 km2, about a third of which will be on water. It will include an Export Processing Zone and Industrial Park Zone alongside other facilities.
Chinese government is providing several supports for Djibouti. The Far East country is mainly providing support for infrastructure development including ports and transport system.