TLTP
\nDJIBOUTI
\nServices sector commands Djibouti\u2019s economy – especially services in shipping and logistics \u2013 and this leads to over-dependence on foreign markets.
\nDjibouti\u2019s strategic position at the connection of the Red Sea and the Gulf of Aden has given it an immense advantage in international maritime trade. Djibouti Port remains the most important asset that this small nation of about one million people has, and it powers Djibouti\u2019s $4 billion city-state economy. Thus, Djibouti pegs its economic transformation on improving the competitiveness of its ports.
\nThis is evident in its ongoing $14 billion infrastructure expansion, whose large component is going into establishment of new ports and terminals across the country\u2019s coastline.
\nThe high headline growth rate of Djibouti\u2019s major trading partner, Ethiopia, will see the country reap a relatively higher return on investment on port expansion as demand for export and import soars. According to estimates by the World Bank, 85 percent of Djibouti port throughput is either going to or coming from Ethiopia. From 2010 to 2019, Ethiopia\u2019s real GDP growth has averaged 9.5 percent – one of the highest rates in the world – and it\u2019s expected to have a knock-on effect on Djibouti\u2019s economy.
\nTo this effect, Djibouti has crafted an ambitious national strategy towards its socio-economic transformation, dubbed Vision Djibouti 2035, which aims to position the country as a global trade, logistics and industrial hub. This centers on ports and intermodal infrastructure development to increase the size of the hinterland served in East Africa and the Horn of Africa. The key component of this strategy includes development of a network of specialized ports: one for containers, one for dry-bulk cargo and another for liquid bulk.
\nIn addition, Djibouti\u2019s capacity to handle liquid bulk destined for Ethiopia is severely constrained by the limitations of Horizon Djibouti Terminals, where oil storage facilities are concentrated. The port\u2019s current storage capacity stands at 379,000 cubic meters, not enough to handle a throughput of refined products hitting more than 3.5 million cubic meters in recent years. In response to this operational deficit, Djibouti last month launched the construction of Damerjog Liquid Bulk port, which will have an annual throughput capacity of over 13 million tons.
\nDjibouti\u2019s geographical position near the world\u2019s busiest shipping routes creates a strong imperative for China\u2019s Belt and Road Economic Initiative, which explains colossal investments by China in Djibouti\u2019s port facilities.
\nThis China-Djibouti nexus has created Africa\u2019s largest free zone, the Djibouti International Free Trade zone (DIFTZ) and the world-class Port of Doraleh. So far, 90 local and multinational corporations have been registered by DIFTZ and an online B2B (business to business) transaction platform, Djimart.com, launched recently to support business operations in the Covid-19 context.
\nHowever, there are a few bottlenecks that could hinder Djibouti ports transformation into a hub – key among them its smaller hinterland access due to an over-reliance on serving Ethiopia, and (as a result) its lower liner connectivity.<\/p>\n","protected":false},"excerpt":{"rendered":"
TLTP DJIBOUTI Services sector commands Djibouti\u2019s economy – especially services in shipping and logistics \u2013 and this leads to over-dependence on foreign markets. Djibouti\u2019s strategic position at the connection of the Red Sea and the Gulf of Aden has given it an immense advantage in international maritime trade. Djibouti Port remains the most important asset […]<\/p>\n","protected":false},"author":2,"featured_media":151252,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-151239","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n