BEAUTY OF DJIBOUTI
Djibouti may initially seem the most unlikely place to attract foreign investments. The country lacked natural resources and everything else that investors considered before putting their money in a new overseas venture.
But these harsh realities were not to deter Djibouti’s president Ismail Omer Gualleh from abandoning his dream of turning his country to Africa’s Dubai.
He envisaged that Djibouti by virtue of it location at the mouth of the Red Sea and close proximity to the Arabian Sea and the Indian Ocean, could became a regional hub for transshipment of goods between land-locked Africa, the Middle East and Asia.
But the realization of this vision depended on obtaining funds for the modernization and expansion of the country’s existing port infrastructure.
In order to be able to lure the necessary investments for the development of it’s port infrastructure, the Djiboutian government had no other option except to introduce far- reaching incentives that conferred an attractive range of both tax and non-tax benefits.
This was followed by president Gulleh’s bold decision in 2000 to sign a concession agreement with Dubai Ports International, a subsidiary of Dubai World, that allowed the Gulf investors to manage Djibouti Port for a period of 20 years. Traditionally ports have been considered national assets that must remain in the control of governments. But the port liberalization policies adopted by the government allowed Djibouti to attract hundreds of millions of dollars in direct foreign investment. Encouraged by the country’s newly-acquired business-friendly environment, investors from Dubai and the government of Djibouti agreed to expand their joint venture involving the management of Djibouti’s old port by establishing a container terminal at Doraleh, 13km from the city. Operational since December 2008, Doraleh container terminal is said to be most technologically advanced in Africa.
In 2004 Djibouti port’s Free Zone was created. The Zone is managed by Jebel Ali Free Zone. To attract investments, Djibouti Free Zone operates on the basis of “one stop shop” meaning that you can finalize all your formalities under one roof. Investments are exempted from all direct or indirect tax except VAT. People who want to establish export business in the Free Zone are not obliged to have local partners while restrictions on repatriation of capital or profits are non-existent. The direct foreign investment received by Djibouti in the last 10 years have already substantially increased the productivity and competitiveness of the country’s two ports. Allowing foreign entry into the service sector has also facilitated the spill lover of knowledge and skills to Djiobutians.
By accepting and welcoming the participation of foreign investors in the ownership and management of the country’s public infrastructure such as ports and airports, Djibouti has demonstrated a firm determination to succeed where other countries in the region have failed.
Text source http://www.somalilandtimes.net/sl/2010/457/12.shtml
But these harsh realities were not to deter Djibouti’s president Ismail Omer Gualleh from abandoning his dream of turning his country to Africa’s Dubai.
He envisaged that Djibouti by virtue of it location at the mouth of the Red Sea and close proximity to the Arabian Sea and the Indian Ocean, could became a regional hub for transshipment of goods between land-locked Africa, the Middle East and Asia.
But the realization of this vision depended on obtaining funds for the modernization and expansion of the country’s existing port infrastructure.
In order to be able to lure the necessary investments for the development of it’s port infrastructure, the Djiboutian government had no other option except to introduce far- reaching incentives that conferred an attractive range of both tax and non-tax benefits.
This was followed by president Gulleh’s bold decision in 2000 to sign a concession agreement with Dubai Ports International, a subsidiary of Dubai World, that allowed the Gulf investors to manage Djibouti Port for a period of 20 years. Traditionally ports have been considered national assets that must remain in the control of governments. But the port liberalization policies adopted by the government allowed Djibouti to attract hundreds of millions of dollars in direct foreign investment. Encouraged by the country’s newly-acquired business-friendly environment, investors from Dubai and the government of Djibouti agreed to expand their joint venture involving the management of Djibouti’s old port by establishing a container terminal at Doraleh, 13km from the city. Operational since December 2008, Doraleh container terminal is said to be most technologically advanced in Africa.
In 2004 Djibouti port’s Free Zone was created. The Zone is managed by Jebel Ali Free Zone. To attract investments, Djibouti Free Zone operates on the basis of “one stop shop” meaning that you can finalize all your formalities under one roof. Investments are exempted from all direct or indirect tax except VAT. People who want to establish export business in the Free Zone are not obliged to have local partners while restrictions on repatriation of capital or profits are non-existent. The direct foreign investment received by Djibouti in the last 10 years have already substantially increased the productivity and competitiveness of the country’s two ports. Allowing foreign entry into the service sector has also facilitated the spill lover of knowledge and skills to Djiobutians.
By accepting and welcoming the participation of foreign investors in the ownership and management of the country’s public infrastructure such as ports and airports, Djibouti has demonstrated a firm determination to succeed where other countries in the region have failed.
Text source http://www.somalilandtimes.net/sl/2010/457/12.shtml
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