Results of the forum "Russia - Ethiopia - Djibouti: prospects for business development"
Part 1. Djibouti is not just a major logistics hub
While talking to the audience and Djibouti’s representatives at the forum
, Russian Ambassador in Djibouti Mikhail Golovanov made sure to point out Djibouti’s strategic location as a logistic hub and its importance on global business. About 12% of world trade and 30% of world oil shipments pass through the Bab-el-Mandeb Strait, which provides great potential for the further development of the Djibouti port infrastructure.
Djibouti's ports and Africa's first fully electrified railway line, Addis Ababa - Djibouti, are already the main gateway for Ethiopia's trade relations with foreign countries. As part of the "Vision 2035" strategy
adopted in 2014, Djibouti is planned to become a logistics hub not only for Ethiopia, but also for other countries in East and Southern Africa with a combined population of over 400 million people.
Since 2017, Djibouti also has a free economic zone (DIFTZ)
of 48 km², offering residents a wide range of preferential conditions and tax breaks.
Ambassador Mikhail Golovanov confirmed the intensification of interaction between Russia and Djibouti at all levels. Signing of the Memorandum of understanding between Chamber of Commerce of Russian Federation and Chamber of Commerce of Djibouti, the visit of the Djibouti Foreign Minister Mahamoud Ali Yusuf to meet with Sergey Lavrov in June 2021, the visit of Djibouti governmental delegation to Moscow in October 2021 to participate in the "Russian Energy Week", cooperation with JSC "Rosgeologiya" and many other steps indicate the great interest in developing relations. In the context of regional cooperation, it is worth mentioning the twinning agreement signed between the city of Ufa and Djibouti City Hall in May 2021.
The Russian ambassador also announced a request of the Minister of National and Higher Education of Djibouti to visit Moscow in order to establish cooperation in the space sector with specialized Russian research institutes and agencies. Djibouti has already launched a national space program that envisages the development and launch of two nano-satellites by the end of 2023.
The representative of the Chamber of Commerce of Djibouti Yusuf Musa Davale, Director of the National Tourism Authority Osman Abdi Mohammed, Director of the Sovereign Fund Slim Feriani, Counselor of the Embassy of Djibouti Kadiga Ibrahim Mohamed and others spoke on the Djiboutian side.
On the issue of attracting investors, they noted the importance of stability in the banking sector in the country, which uses the Currency Board regime, in which the exchange rate of the local franc is pegged to the dollar, so the rate of the Djibouti franc has not changed for more than 20 years.
The authorities of Djibouti create the most comfortable business environment for startups and small businesses. The Republic of Djibouti is also the first in the region in terms of reforms to facilitate investors. The country is open to all forms of economic interaction, including PPPs and concessions.
In addition to logistics and transport infrastructure, energy (including geothermal, wind and solar), livestock and fisheries have great potential for development.
The director of the Djibouti Sovereign Fund, Slim Feriani, spoke about the details of his organization, which was created 2 years ago by presidential decree. The fund is part of the Vision 2035 strategy, helping transform the Djiboutian economy.
"Djibouti is a diamond and like any diamond it needs clarity, the right color and the perfect cut in order to shine. And we want our partners to help us achieve this goal" Slim Feriani said.
Tourism has been cited as a priority for the country's economy. Djibouti surpasses the neighboring leaders of the world tourism industry - the UAE and Egypt - in many natural indicators. The lake Assal which is located in Djibouti with a salinity of 35-40% is considered the second in the world after Don Juan (Antarctica) by this indicator. Assal is 155 meters below sea level and is also the lowest point in Africa. Recently, Lake Assal has become one of the main tourist attractions in Djibouti. Representatives of the country have made a special emphasis on the unique conditions for diving near the sea coast of the country.
The tourism sector is actively supported at the government level. The only limiting factor for the development of tourism potential of Djibouti remains underdeveloped infrastructure, so the country won’t say no to foreign investment, including - Russian. In addition to natural resources, Djibouti can offer tourists a large list of archaeological sites.
In the framework of the February business mission AFROCOM
plans to inaugurate Russian Business Support Center in Djibouti, the ceremony will be personally headed by Chairman of the Coordinating Committee, Russian Senator Igor Morozov.
At the last forum it was announced a wide range of domestic companies from various fields, planning to participate in the business mission.
Economic talks were not the main focus at the Russia-Ethiopia-Djibouti forum
. It was announced that during the February mission planned to carry out activities to perpetuate the memory of the Russian Orthodox mission headed by Archimandrite Paisiy, sent in 1889 to establish direct contacts with the Ethiopian Orthodox Church, but defeated at the intermediate stop in Djibouti by French colonial forces.
In addition, during the upcoming mission, it is planned to finally agree on the construction of monastic cells on the territory of the Ethiopian Orthodox monastery established in Djibouti at the expense of Russian patrons. We believe that such initiatives by Russian business correspond to the goals and objectives of the course announced by the Russian Orthodox Church to establish itself in Africa.