DJIBOUTI CITY, May 31 (Xinhua) -- Djibouti, with its strategic advantage connecting Africa to Asia and Europe by sea, is poised to diversify its economy to become a regional hub for logistics, finance, tourism and information and communications technology (ICT) as cooperation with China injects crucial impetus to the Red Sea nation's development ambitions, a senior official has said.
In a recent interview with Xinhua, Slim Feriani, chief executive officer (CEO) of the sovereign wealth fund of Djibouti, said that as the gateway to Africa, Djibouti is endowed with significant development potential, and the country's drive to become the logistical hub for the region and beyond "is moving full-steam ahead."
"Our biggest advantage is the strategic location of the country controlling the entry into the Gulf of Aden and the Red Sea and linking the African mainland to the Middle East and beyond," Feriani told Xinhua.
Djibouti has been consolidating its position as a regional logistics hub through substantial development initiatives, including Chinese-built development projects such as the Doraleh Multi-Purpose Port (DMP), the Djibouti International Free Trade Zone (DIFTZ), and the 752-km electrified transnational railway connecting ports in Djibouti to the Ethiopian capital, Addis Ababa, among others.
"Djibouti provides vital service to land-locked African countries -- for example, around 90 percent of Ethiopia's trade passes through here. But that is only half the port's activities, which are wide-ranging, including trans-shipment to serve the whole sub-region in Africa, as well as the Gulf states, Europe and elsewhere. So, yes, it is truly the gateway to Africa and bridge between the region and the Middle East, a market of over 400 million people," the CEO said.
The country, through its development blueprint Vision 2035, aspires to create an attractive investment climate across various economic sectors, including port development, logistics, finance, tourism and ICT, with an overarching goal of diversifying its economy beyond from logistics and ports.
Highlighting Djibouti's socio-economic and political stability, albeit its location in the volatile Horn of Africa region, as an important economic advantage, Feriani underscored that the country is fast becoming an attractive destination to international investors, eventually fueling its economic diversification aspirations.
Noting the country's "huge tourism potentials," Feriani stressed that cooperation with China and other partners will play a crucial role in harnessing the country's aspirations of becoming a major international tourism destination.
"We are investing in wind and solar energy. Geothermy and waste-to-energy are other renewable sources of energy. We are aiming to become a digital economy hub in the region. The Djibouti Data Center is among the first data center facilities in East Africa, with access to all major international fiber-optic systems, connecting Europe, the Middle East and Asia Pacific regions with Africa," Feriani said, as he highlighted the country's ongoing economic diversification efforts.
Courtesy of its robust cooperation with China in realizing flagship development projects over the years, the country's economic diversification ambition is further propelling its win-win cooperation with China and other development partners.
"In addition to an ambitious program of expanding our port facilities, in which some Chinese companies are involved, there are several other areas of potential cooperation," he said.
Acknowledging flagship infrastructure projects that were realized as part of the country's expanding cooperation with China, such as the DMP, the Ethiopia-Djibouti railway and the DIFTZ, the CEO said such infrastructure projects "are playing a very significant part in our drive to become a logistical hub for the region and beyond. This is gaining increasing significance given the geopolitical tensions in the area and the imperative to keep vital trade routes open."
"Cargo volumes passing through Djibouti have been increasing. For example, they increased by 31 percent in the year to the end of September 2023. Chinese investment is playing a key part in maintaining this trend with China Merchants Group taking a 23.5 percent stake in the Doraleh Multi-Purpose Port," he said.
The DMP, built by Chinese enterprises and officially opened in 2017 with an annual design capacity of 7.08 million tonnes of cargo and 200,000 TEUs in container capacity, has increased the efficiency of vessel operations and reduced berthing time through highly automated and modernized loading and unloading methods, improving the port's competitiveness and cargo handling revenue.
According to Feriani, the Chinese-built Ethiopia-Djibouti Standard Gauge Railway is currently streamlining the transportation of a growing proportion of cargo between ports in Djibouti and factories in Ethiopia, ultimately bolstering regional connectivity.
"The railway line is now operating at close to full capacity and the plan is to double its capacity, including by investing in new locomotives and rolling stock. Chinese involvement in the Djibouti International Free Trade Zone, we believe, is also strategically important for the country to remain globally competitive," said Feriani.
The CEO further underscored Djibouti's keen interest to further augment its socio-economic and infrastructure development cooperation with China toward realizing its multifaceted economic diversification agenda.
"Our partnership with China goes a long way back and their support in upgrading our logistics such as ports and railways has been invaluable in our efforts to reach the next level. We are looking forward to continuing this partnership and deepening it for mutual benefit," Feriani stressed.
