“Africa’s Dubai”: Chinese group starts work on $3.5bn Djibouti free trade zone

China has helped launch the first phase of a $3.5bn project to build Africa’s biggest free trade zone in the microstate of Djibouti.

The Djibouti International Free Trade Zone (DIFTZ) is planned as a 48 sq km project, however the first phase will be a $370m, 2.4 sq km pilot zone which will consist of four industrial clusters focusing on processing goods for export, financial support services, manufacturing and duty-free retailing.

Djibouti president Ismail Omar Guelleh, speaking at the launch of the project last week, described it as a "a zone of hope". He said: "Having become a global logistics hub, today Djibouti is taking the next step to become an industrial and commercial hub. The opening of DIFTZ shows that Djibouti continues to grow its increasingly important role in world trade."

The zone will be managed by the Djibouti government and three Chinese companies: China Merchants Group, Dalian Port Authority and financial services provider IZP Technologies.

Djibouti, which has an urban unemployment rate of 50%, hopes to become "Africa’s Dubai": a hub for trade, manufacturing and logistics, based on its claim to be a crossroads between Africa, the Middle East, Asia and, via the Suez Canal, Europe. It also offers the main access to global markets for the rapidly growing Ethiopian economy, as well as Sudan and South Sudan.

As well as hosting military bases for the US, France, China and Japan, the country recently developed the 2 million TEU Doraleh container terminal, and became the eastern terminus of the $4bn, 756km standard gauge rail link with Addis Ababa.

Image: The urban unemployment rate among Djibouti’s 800,000 people is about 50% (Tyke/Creative Commons)

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