Construction begins on Djibouti International Free Trade Zone (DIFTZ)

PHOTO

The new international free trade zone will transform trade in the region and provide a strategic base for global businesses to access the rapidly growing African market

18 January 2017, Djibouti

A groundbreaking ceremony was held on Monday 16 January, to celebrate the beginning of construction of Djibouti International Free Trade Zone (DIFTZ). The ceremony was held under the auspices of Djibouti’s President, His Excellency Ismail Omar Guelleh, and was attended by senior government officials from the People’s Republic of China and across the region including Azerbaijan, South Africa, Togo and Ethiopia.

The project is being led by DIFTZ Project Preparatory Group, which consists of Djibouti Ports and Free Zones Authority (DPFZA) together with three major Chinese partners: China Merchants Group, Dalian Port Authority and IZP. The Group are working together to establish a world-leading international free trade zone that capitalizes on Djibouti’s strategic location and attractive investment policies. Once complete, the total size of the free zone will span an area of 4,800 hectares and a total investment of more than $3.5 billion.

China Merchants Group and Dalian Port Authority bring over a century of experience and global expertise in trade and logistics to the project, while IZP will assist the new venture’s efforts in internet cross border trade and big data. DIFTZ’s establishment further cements Djibouti’s role as a key African trade hub and a critical junction on the “Maritime Silk Road”, a Chinese initiative aimed at investing and fostering collaboration in Southeast Asia, Oceania, and North Africa.

International companies setting up in the DIFTZ will enjoy many benefits, including:

0% corporate tax;

100% foreign ownership;

No currency restrictions;

Flexible labour policy;

Lower land and rental costs;

Duty free environment;

Preferential export tariffs to regional trade blocks, EU and the USA.

Companies setting up in DIFTZ will also benefit from an integrated “one-stop-shop” managed through state of the art online platforms. This will enable companies to conduct business quickly and efficiently, further improving the ease of doing business in Djibouti.

The project is also set to create employment and business opportunities for the people of Djibouti and the wider region, through the development of export manufacturing and processing capacity in a number of key sectors including food, automotive parts, textiles and packaging. Overall, the DIFTZ is estimated to create over 200,000 new jobs.

Aboubaker Omar Hadi, Chairman of Djibouti Ports and Free Zones Authority (DPFZA), states: “Djibouti International Free Trade Zone is a place of opportunity and access for both the international business community and the people of Djibouti. It lies at the heart of a global network that provides access to the world’s maritime trade routes, as well as some of the world’s fastest growing economies here in Africa.”

Dr. Hu, Vice President of China Merchants Group, adds: “DIFTZ will be a major milestone in the long term economic development of Djibouti. China Merchants Group is proud to play a key role in its development, helping to further solidify Djibouti’s position as a regional logistics, trade and financial centre.”

Representing a $370 million investment, the initial phase of DIFTZ’s development will involve the construction of a 240 hectare free trade zone and will be fully functional by October 2017. It will offer vital services for export processing, logistics, trading, warehousing and distribution. Known as the Pioneer phase, it will also include the construction of office buildings, a hotel and serviced apartments. All of these investments will be supported by the utilities needed for the long-term success of the projects, including high-speed telecommunications, power and water supplies.

Construction of DIFTZ begins just a week after the completion of the Addis Ababa-Djibouti Railway, a new 752km track linking Ethiopia’s capital with the Port of Djibouti. In addition to this, Djibouti has invested in a new national airline, airports and highways which – as part of a $15 billion expansion programme to improve transport and logistics facilities - are establishing the nation as the gateway for some of the world’s fastest growing economies.

-Ends-

Djibouti Ports and Free Zones Authority (DPFZA) is the governmental body overseeing ports in the country. The organization also oversees the national free trade zones, serving as a liaison between the companies working therein and other government agencies.

DPFZA is the sole authority in charge of the administration and the control of all the free zones and ports in Djibouti. The entity also plays an instrumental role as the sole interface between the free zone companies and any other governmental bodies and comes under the direct authority of the Djibouti Presidential Office.

DPFZA holds several mandates, among them:

The Promotion the Djibouti Ports & Free Zones as a commercial and logistic platform;

The establishment of a business friendly environment with a business oriented legal framework (Law No 53/AN/04/5eme L aiming the Free Zone Code dated 2004; Law No 103/AN/05/5eme L regulating Free Zone Companies dated 2005)