Djibouti’s Development & Progress Positions: Becoming a World-Class Trading & Logistics Hub

The State of Djibouti terminated the 30-year concession agreement for the Doraleh container terminal last year following a dispute between the government of Djibouti and the Dubai-based shipping company DP World.

Now, after a year of termination of the concession, the Doraleh container terminal has established itself as a powerful port structure. The port terminal, which is located at the mouth of the Bab el Mandeb strait, at the crossroads of the main trade routes of the world, has multiple vocations- to serve its region, and the sister Ethiopian nation, as well as to position itself as a great transhipment platform, in direct line with Asia. It is currently under the control of the government-owned Doraleh Container Terminal Management Company.

Earlier this month, General Thomas Waldhauser, Commander-in-Chief of Africom (United States Africa Command) said before the members of the United States Senate Armed Services Committee,  that the Doraleh container port provided better services post departure from DP World.

He also said that the Republic of Djibouti was an important strategic partner of the United States through the logistical and strategic platforms that the country offers to US forces in the region and in Africa.

Notably, the container terminal is one of the cornerstones of an ambitious national development project that is aimed at making Djibouti a leading trading and logistics hub between Asia, Africa and the rest of the world. The development plan also saw the opening of a new multipurpose port on the same site in May 2017 and the ports of Goubet and Tadjourah in June 2017.

Djibouti also launched Africa’s biggest free-trade zone last year to capitalize on its strategic position on one of the world’s busiest trade routes as well as started new rail link to Addis Ababa in January 2018.

More recently, Ethiopia and Djibouti entered into an agreement to build a 765km a gas pipeline between the Ogaden Basin natural gas deposits in Ethiopia and the Djiboutian coast. China’s POLY-GCL Petroleum Group Holdings Ltd. also provided private financing of around $ 4 billion for the construction and operation of a natural gas liquefaction plant and a gas terminal in the Damerjog area.

Furthermore, in the last few years, Djibouti has massively invested in the development of promising infrastructure and in a legal framework strongly favorable to the private sector and service companies. The country’s development and progress can be judged by the jump of 55 places in the 2018 ranking of Doing Business. The development project in Djibouti is clearly underway. The major investments, the amounts committed, testify to the confidence of international partners in the long-term vision of Djibouti.

 
Caroline Finnegan
A professionnal journalist for the past ten years, I cover global news and economic affairs for The Chief Observer.