Djibouti will inaugurate three ports next month and an additional port soon. Mr. Aboubaker Omar Hadi Chairman of the Djibouti Ports and Free Zones Authority talked with Capital about how Djibouti is taking advantage of its location and working not only to be a transportation hub but to establish free trade zones which will create thousands of jobs in a diverse array of economic sectors.
Capital: What are the facilities that the largest free trade zone in Africa will offer?
Aboubaker Omar Hadi: The Djibouti International Free Trade Zone (DIFTZ) will host a wide range of modern facilities and services that will help businesses set up and run smoothly. It will offer vital services for export processing, logistics, trading, warehousing and distribution.
This year we plan to construct office buildings and warehouses. Of course, all of these investments will be supported by the utilities needed for long term success, including high-speed telecommunications, power and water supplies.
History shows us what we need for free trade zones to thrive – they must be equipped with world-class infrastructure and have the right policies to facilitate trade and enterprise, and to attract investment. I am proud to say Djibouti has all of these.
Capital: What are the activities included in the zone?
Aboubaker: The project is also set to create employment and business opportunities for the people of Djibouti and the wider region, through the development of export manufacturing and processing businesses in a number of key sectors including food processing, assembly lines and heavy industries. Overall, the DIFTZ has the potential to create 200,000 new jobs over 10 years.
To begin with, this pioneer phase stage of 240 hectares of Free Trade Zone out of 600 hectares that consists of phase 1, will offer vital services in logistics and trading, including storage and distribution, and more importantly an export processing zone.
Customers will also benefit from an integrated ‘one stop shop’, managed through state-of-the art online platforms. This will enable them to conduct business quickly and efficiently, further increasing the ease of doing business in Djibouti.
We should also not forget that companies setting up in the DIFTZ will benefit from unique advantages such as 0% corporate tax, 100% foreign ownership, a duty free environment, low land and rental costs and much more.
Capital: When is it scheduled to commence operation and how much will it cost?
Aboubaker: Construction began on the DIFTZ in January 2017. We have invested USD 225 million at this initial stage which will represent the pilot phase.
Future phases are already planned which will bring the total size of the free zone to 4,800 hectares, and a total investment of more than USD 3.5 billion
Capital: Can you provide us with a general overview of projects taking place in Djibouti?
Aboubaker: For investors, our strategic location brings many opportunities. With over 70% of the world’s cargo transported by sea, we sit at the centre of one of the world busiest sea trade routes, connecting Asia, Africa and Europe. Djibouti not only provides investors with access to the world’s maritime trade routes, but also with access to Ethiopia’s dynamic economy as well as the wider East African economy.
We are currently investing across a range of infrastructure projects, including highways, ports, aviation, railways and bunkering. In fact, we have invested USD 15 billion in expanding our ports and related infrastructure.
These investments in multi modal transport facilities are also helping establish Djibouti as a critical junction on China’s “Maritime Silk Road”, which will allow it to trade more effectively with the rest of the world.
Capital: Can you tell us about the Doraleh Multipurpose Port (DMP) and its progress? What about Tadjourah, the Goubet Mineral Port and Damerjog Livestock Port?
Aboubaker: To help expand Djibouti’s role as a trade and logistics hub for East Africa and beyond, we are inaugurating four new ports (three will be inaugurated next month) as well as an LNG and an oil terminal, investing USD 15 billion in their development.
Progress is going well in all of our ports. We invested approximately USD 590 million in the Doraleh Multipurpose port. Construction on this container and oil terminal is due for completion this year and will have a capacity of nearly 8.78 million tonnes. Our multipurpose port of Damerjog is also on track for completion this year and will continue to see us being a key source of livestock for regions like the Middle East.
Construction and development of the Port of Goubet, which is dedicated to the export of salt gypsum, pearlite and has a capacity of around 6 million tonnes per year, is also progressing as planned. This port plays to our strengths, considering that Djibouti hosts Lake Assal, the world’s largest salt reserve.
Capital: Tell us about the operations of Air Djibouti and the new airports you are building?
Aboubaker: In August, Air Djibouti took delivery of the first Boeing 737 aircraft in Djibouti in preparation for the launch of Air Djibouti’s new commercial operations. The establishment of a flag carrier is an integral part of the DPFZA’s drive to achieve excellence in logistics and is also a key milestone in our journey to establish our nation as a regional trade and logistics hub.
We are currently offering passenger flights to Addis Ababa, Mogadishu, Dire Dawa, Bosaso, Hargeisa, Berbera – and we will soon be establishing further routes to London, Jeddah, Dubai and Khartoum.
Apart from offering cargo and passenger services, we will also work to inspire a new generation of young pilots in Africa. As the region continues to transform and develop, a thriving and open aviation industry is key to achieving intra-African trade and sustainable economic development.
Two new airports are currently under construction in Djibouti. The biggest will be the Hassan Gouled Aptidon International Airport. Construction of the facility, which will be located 25 km south of Djibouti City, started in early 2015 and is scheduled to be finalized by 2018. The airport will be able to handle 1.5m passengers and 100,000 tonnes of cargo annually, and will generate many jobs for the local population.
Capital: How do you assess the newly launched Addis Ababa – Djibouti railway’s impact on the DPFZA development projects?
Aboubaker: The newly established Addis Ababa – Djibouti railway will have a huge and positive impact on all other development projects taking place in Djibouti. To begin with, the new railway can reach speeds of 160 km/h for passenger trains and 120 km/h for cargo trains. It will cut cargo journey times between the Port of Djibouti and Addis Ababa from three days by road to just 12 hours.
It also offers vital links to the Djibouti International Free Trade Zone (DIFTZ), which will help spur the nation’s manufacturing industry and provide employment opportunities in the country.
The new railway marks a new dawn for the already very strong trade relationship between Djibouti and Ethiopia. It will also bring us closer to our Chinese partners, who have played a key role in financing and helping to manage the railway’s operations.
Capital: You recently acquired your first tanker ship called the Red Sea and you bought a bunker barge what purpose do they serve?
Aboubaker: In January we acquired our first tanker ship; Red Sea.The purchase of this vessel comes at a key point in Djibouti’s development as a regional centre for bunkering. The new LNG and oil terminals being built will further cement the nation’s role as a major refuelling, bunkering and trans-shipment centre in the region.
As a background to the company, Red Sea Bunkering is a ship-to-ship fuel bunkering servicing company exclusively operating in all ports and territorial waters of Djibouti. It offers full truck-to-port and ship-to-ship product supply of lubricants, fuel, and fresh water.