Djibouti launches ‘biggest free-trade zone in Africa’
DJIBOUTI on Thursday launched the first phase of Africa’s biggest free-trade zone, seeking to capitalise on its strategic position on one of the world’s busiest trade routes.
At a ceremony in the capital, President Ismael Omar Guelleh hailed the scheme as the culmination of infrastructure projects “boosting Djibouti’s place in international trade and commerce”.
The Horn of Africa nation, located at the mouth of the Red Sea and south of the Suez Canal, in 2017 unveiled three new ports and a railway linking it to landlocked Ethiopia, as part of its bid to become a global trade and logistics hub.
Somalia’s president, Mohamed Abdullahi Mohamed, hailed the free-trade zone as a “victory for East Africa”, in comments echoed at the ceremony by Ethiopian Prime Minister Abiy Ahmed and President Paul Kagame of Rwanda.
Sudan’s President Omar alBashir, who is wanted by the International Criminal Court on charges of crimes against humanity and war crimes, was also there.
The zone, which is connected to Djibouti’s main ports, aims at diversifying the economy, creating jobs and luring foreign investment through tax-free incentives and full logistical support.
The pilot phase launched Thursday comprises a 240-hectare site.
On its scheduled completion 10 years from now, the $3.5 billion initiative will span 4,800 hectares – the largest free-trade zone on the continent.
The project hopes to see for- eign companies setting up manufacturing plants within the zone, adding value to products instead of merely importing and exporting raw materials.
“The volume of goods travelling to East Africa keeps increasing. Every time a product [leaves] the continent without being transformed it is a missed opportunity for Africa,” said Aboubaker Omar Hadi, chairman of the Ports and Free Zones Authority.
A row of Djiboutian and Chinese flags fluttered side-by-side above the freshly painted bright yellow walls surrounding the expansive project – a symbol of the tiny country’s close ties to the Asian giant whose loans have funded its lightning-fast infrastructure growth.
Djibouti – which is also the site of China’s only overseas military base – is a critical part of Beijing’s “Belt and Road” global infrastructure initiative along what has been dubbed the “Maritime Silk Road”.
The key policy initiative has seen Beijing loan developing countries across Asia and Africa huge amounts of money to develop their infrastructure and ease trade.
However last year Sri Lanka was forced to hand over majority control of its Hambantota port to China after being unable to repay its debt, raising concerns over the vulnerability of poor nations to such massive debt.