Djibouti launches Africa’s largest free trade zone – with help from China
Djibouti has launched the largest free trade zone in Africa as the tiny port nation continues its drive to become a global trade leader.
The Djibouti International Free Trade Zone (DIFTZ) is a $3.5 billion project backed by China, which covers 4,800 hectares of land in one of Africa’s smallest countries. Djibouti opened the first phase of the project on July 5, coinciding with the Africa-Chine Economic Forum where government officials and key members of the private sector met to discuss economic collaboration.
Africa’s largest free trade zone
The first phase of Djibouti’s free trade zone saw the opening of a $370 million, 240-hectare zone consisting of four industrial sections for trade and logistics, export processing, business and financial support services, plus manufacturing and duty-free merchandise retail.
Djibouti expects the DIFTZ to enhance its position as a trade and logistics hub and also create jobs for its growing population. The project is being supported by three Chinese companies – China Merchants Group, Dalian Port Authority and IZP – with Djibouti President Ismail Omar Guelleh lauding the efforts of Chinese companies investing in Africa.
However, China’s growing interest in Djibouti has raised concerns in the West, particularly American officials who worry Beijing could out-muscle their military and economic presence in on of the country’s most important overseas strategic military positions.
Some economic experts also warn China is luring countries into a “debt trap”, which could threaten their future sovereignty and leave them economically dependent on Beijing. Aside from Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan are highlighted as countries vulnerable to increasing debt to China.
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