Djibouti - A country on the rise

Monday, September 4, 2017

by Business Council for Africa

A series of major infrastructure developments in Djibouti has placed the country firmly on the radar of international investors.

In June 2017, the East African country opened the third of four ports – a move designed to significantly increase import and export capacity, and led by the Djibouti Ports and Free Zones Authority (DPFZA). Djibouti currently handles around 90% of Ethiopia’s inbound trade and is regarded as the gateway to one of the fastest growing regions in the world.

The ports form part of a wider US$15billion infrastructure drive, which also includes a Liquefied Natural Gas facility and oil terminal. Two airports will also be constructed, which will be served by the newly relaunched Air Djibouti. The national carrier will play a crucial role in establishing Djibouti as a major logistics centre for the region and has already taken delivery of a number of planes, including a Boeing 737 and Boeing 767-200.

As well as the seas and skies, capacity has also been increased overland. This year saw the completion of the new Addis Ababa-Djibouti Railway; 752km of track linking Ethiopia’s capital with the Port of Djibouti. With trains reaching speeds of 160km/h for passengers and 12km/h for cargo, it has cut journey times between the two hubs to 12 hours, compared to 3 days by road.

These dramatic improvements will serve the development of Djibouti’s International Free Trade Zone (DIFTZ). When fully realized, DIFTZ is set to become the largest in Africa. Phase I is due to be completed by the end of 2018, covering 240 hectares. It is expected to handle $7billion in trade within two years.