With the presence of East African leaders, Djibouti inaugurated for the kick off the largest economic zone in Africa when it completed ten years from now. Djibouti International Free Trade Zones (DIFTZ), will comprise a total investment of $3.5 billion and span an area of 4,800 hectares.
The new free trade area is a “zone of hope for thousands of young jobseekers,” said Djibouti President Ismail Omar Guelleh at the inauguration ceremony.
This Free Trade Zone will enhance trade in the Horn of Africa also it will add value to Djibouti`s position as a trade and logistic hub. The zone, which is connected to Djibouti’s main ports, aims at diversifying the economy, creating new jobs and luring foreign investment through tax-free incentives and full logistical support.
The project hopes to see foreign companies setting up manufacturing plants within the zone, adding value to products instead of merely importing and exporting raw materials.
Djibouti is propositioning itself as a strategic trade hub in the Horn of Africa area. Its landlocked neighbour Ethiopia, an economic powerhouse in the region, already relies on Djibouti for 95 per cent of its imports, according to Reuters.
Djibouti’s location just ahead of the Suez Canal, which serves as a gateway for trade travelling between eastern and western markets, means that it offers commercial shipping a presence close to one of the world’s busiest trading routes.
The opening also signifies the latest step in China’s Belt and Road Initiative, Beijing’s scheme to redevelop ancient trading routes centred on itself.
Free trade is a hot topic in Africa. Earlier this month, South Africa, the continent’s most developed economy, signed on to the African Union’s free trade agreement that proposes a continent-wide borderless trade. 49 out of the African Union’s 55 members have now committed to the scheme although Nigeria, Africa’s largest economy, is yet to do so.