Ilyas Moussa Dawaleh, Djibouti’s Minister of Economy, Finance and Planning says that it needs to become simpler to trade between Ethiopia and Djibouti. He sees Djibouti as a place where China can distribute all of its products throughout Africa.
Capital: There is a forecast by IMF that your economy will grow by 7.8%, what is your thought about this and how much different is it?
Ilyas Moussa Dawaleh: It’s not that much different. It’s about less than half a point from the GDP, from our perspective model of forecasting implemented by the Ministry of Economy. That shows some elements which we consider will impact the growth in the coming years. We are in the process of development, especially because of the speed we are growing in Djibouti and in Ethiopia too. That was the major difference. It is more about our own model which is different from the one IMF uses to calculate forecasts.
Capital: As a non-oil producing country this is a great success, how do you manage to do this?
Ilyas Moussa: That is the important thing to emphasize. There is a regional dynamic in this part of Africa and from Djibouti’s perspective we believe the correlation between Ethiopia’s and Djibouti’s economy is dynamic. There are a number of key and important infrastructure investments going on. That also dramatically increases growth. From the other side when it comes to the size of Djibouti’s economy and the number of investments, the difference can look flashier than other countries.
Capital: Investments in Djibouti are mainly financed by China. What is your plan to attract other foreign investments?
Ilyas Moussa: It is not really about China only. We have other investors. We have investors from Gulf countries, USA, Europe and others. German companies are investing as we speak. We have people from the Netherlands investing in cold chain logistics development. But of course everyone will be focusing on China investments because they are the largest and they take more risks than any other investor. However we will continue with additional investors from different continents and countries. We will also push forward to other Chinese investors too because they are really good in taking risks and can mobilize funds quickly.
Capital: During the 2018/19 fiscal year you plan to attain double digit growth, is this feasible?
Ilyas Moussa: Yes. If we continue to observe and to make macroeconomic fundamentals with strong discipline, if we continue to develop our own transformational strategy, it means looking for diversification in our economy, with regards to the numbers of investments, I believe it is very easy to reach that. But it’s not about figures; it’s really about growth to be shared by the country, by the people and by the region to some extent. What we are looking is more quality growth than double digit figures.
Capital: The construction of the new free zone has started, what kind of new things will be included when it starts operation?
Ilyas Moussa: The International Free Trade Zone will be very important in terms of Djibouti’s industrialization. We cannot look into the same models of industrialization Ethiopia did because we have different backgrounds and strengths. We are looking more to the processing and packaging and some other key products, where we believe there is a need for sensitive transit time and sensitive logistics. Those industries will be, for us is absorbing the employment of our youth. But our destiny is to another level of industrialization of adding values from the Djibouti’s competitive advantage. To look in the whole value chain of the region, what every country can make better than the other one, let them concentrate and do it. When it comes to the financial center it will be something very important for Djibouti and also for the whole region. From the other side we believe there will be many shipments of goods from China to be redistributed to the African countries, in order to make a distribution hub in Djibouti an Industry Cluster, Financial Cluster and Logistics Cluster will be developed in the new International Free Trade Zone.
Capital: What kind economic cooperation should the two countries have?
Ilyas Moussa: Actually we have to simply change the overall ways of doing business between Djibouti and Ethiopia. We did a number of investments together. We think, plan, execute them as one in key set of infrastructures that are also costly but that are very important for the future of our countries. From joint infrastructure development we have to move to joint soft development. We cannot afford to have bureaucratic hold ups between the two countries. The trade must be very smooth. It should not be more difficult to import from Ethiopia than other places. Some products are more difficult to import from Ethiopia than other places. How can you explain this? This has to be changed and this is the spirit of the two leaders and governments to really make a more business friendly environment between the two countries. We believe the time has come to make our soft development stronger together from trade from logistics and other fields.