Dji­bouti is worth its salt for loads of ‘White Gold’

Pretoria News - - BR | FOCUS - Neil De Beer is the pres­i­dent of the IFA and ad­vises nu­mer­ous African states on eco­nomic de­vel­op­ment. www.ifa.africa or [email protected]

A COUN­TRY named after its cap­i­tal, Dji­bouti City, Dji­bouti lies in north­east Africa on the Gulf of Aden in the Horn of Africa and at the south­ern en­trance to the Red Sea.

For­merly known as French So­ma­liland (1896-1967) and the French Ter­ri­tory of the Afars and the Is­sas (1967-77), the coun­try took Dji­bouti as its name when it gained in­de­pen­dence from France on June 27, 1977.

Bor­der­ing Ethiopia, Eritrea and So­ma­lia, the small coun­try is mainly a stony desert, with scat­tered plateaus and high­lands.

With an es­ti­mated pop­u­la­tion of 960 000 peo­ple and a gross do­mes­tic prod­uct of $1.97 bil­lion (R30.41bn) (World Bank 2018), the coun­try is home to the third most saline body of wa­ter in the world, Lake As­sal. The lake is a crater lake in the Danakil desert in cen­tral Dji­bouti. Dor­mant vol­ca­noes and black lava fields back its emer­ald wa­ter.

More than 155 me­tres be­low sea level, it’s the low­est point in Africa and the third-low­est point on earth after the Sea of Galilee and the Dead Sea. No out­flow oc­curs from the lake.

Due to its high evap­o­ra­tion rate, the salin­ity level of its wa­ters is 10 times that of the sea. Lake As­sal is the world’s largest re­serve of salt, which has been named the “White Gold” and has given life to its na­tion.

Dji­bouti has had its ge­o­graph­i­cal lo­ca­tion work­ing to its ad­van­tage, which can be seen in the de­vel­oped coun­tries’ in­ter­ests in set­ting up ei­ther a base or ship­ping rep­re­sen­ta­tion there.

Dji­bouti serves as a gate­way to the Suez Canal, lo­cated at the Gulf of Aden and the Red Sea, through which 10 per­cent of the world’s oil ex­ports and 20 per­cent of all com­mer­cial goods travel. The Gulf of Aden/Red Sea is a crit­i­cal wa­ter space, through which sig­nif­i­cant mer­chant ship­ping passes.

China has ad­vanced in tak­ing ad­van­tage of this by set­ting up a mil­i­tary base in Dji­bouti in 2017 – a step that el­e­vated the African na­tion’s sta­tus while spark­ing con­cerns over China’s mil­i­tary might. This forms China’s “Belt and Road Ini­tia­tive”, sup­port­ing Bei­jing’s jug­gling of com­mer­cial and mil­i­tary ob­jec­tives in Africa. It hosts other mil­i­tary bases for France, the US, Ja­pan, and the North At­lantic Treaty Or­gan­i­sa­tion, as well as other for­eign coun­tries with forces sup­port­ing global anti-piracy ef­forts.

The coun­try’s econ­omy has been driven by a state-of-the-art port com­plex, among the most so­phis­ti­cated in the world. The size of its econ­omy lim­its its abil­ity to di­ver­sify pro­duc­tion and in­creases its re­liance on for­eign mar­kets, mak­ing it more vul­ner­a­ble to mar­ket down­turns and ham­per­ing its ac­cess to ex­ter­nal cap­i­tal. The coun­try has low agri­cul­tural pro­duc­tiv­ity as only 4 per­cent of its land is arable, hence re­ly­ing on im­ports for food sup­ply.

On the Neil Eco­nomic Scale, the price of a can of coke in Dji­bouti is 90 DJF (Dji­boutian franc) (R7.48) and the price of a litre of petrol is 220 DJF (R17.30). The in­fla­tion rate is around 2.18 per­cent.

Dji­bouti’s Do­ing Busi­ness rank­ing im­proved from 171th in 2016 to 99th in 2018. The gov­ern­ment con­tin­ues to fo­cus on fi­nan­cial-, telecom­mu­ni­ca­tion­sand trade-re­lated ser­vices, so­lid­i­fy­ing the coun­try’s po­si­tion as an im­por­tant re­gional busi­ness and trade hub in the Horn of Africa.

The gov­ern­ment of Dji­bouti has main­tained a good and sta­ble po­lit­i­cal en­vi­ron­ment. Gov­er­nance is­sues are not part of the list of prob­lems.

How­ever, it has sig­nif­i­cant en­vi­ron­men­tal prob­lems – de­for­esta­tion, de­ser­ti­fi­ca­tion, wa­ter pol­lu­tion and the pro­tec­tion of its wildlife. The coun­try re­mains with great po­ten­tial big­ger and greater than its size.

NEIL DE BEER

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