Djibouti, an arid Horn of Africa nation with less than 1 million inhabitants, is home to the United States’ sole permanent military base in Africa. The country also serves as a military outpost for China, France, Italy and Japan, with that nation’s first overseas base since World War II. Other powers including Saudi Arabia have expressed interest in the key location across the Bab el-Mandeb strait from the Arabian Peninsula and on one of the world’s busiest shipping corridors.
On the chaotic streets of what has been called the “Singapore of Africa,” the jostling between the United States and China for influence is plainly seen.
China’s first overseas military base, which was manned last year, is just a few miles from the U.S. one. The head of the U.S. Africa Command, Gen. Thomas Waldhauser, earlier this year predicted that “there will be more.”
China’s economic interest is strong as well, with Djibouti borrowing up to $957 million from the Export-Import Bank of China to finance several projects in recent years, according to the China Africa Research Initiative at Johns Hopkins University. The Chinese built a new electrified rail line that links the capital of neighboring Ethiopia, Africa’s second most populous country and one of its strongest economies, with Djibouti as the nation aims to become a global shipping power.
“We sit on two of the busiest shipping lanes in the world. We are servicing the wider region, including some of the world’s fastest-growing economies,” the chairman of the Djibouti Ports and Free Zones Authority, Aboubaker Omar Hadi, said in an interview during a recent visit by The Associated Press.
He called Djibouti, a largely Muslim nation, a model of stability in an otherwise volatile region. It is also one of the world’s fastest-growing economies, with the World Bank projecting 7 percent growth this year.
Djibouti is currently investing $15 billion in local infrastructure projects that connect the region to global trade routes, including the expansion of ports, improved road and rail links and new airports, according to official figures provided to AP.
The country’s ports now have a total handling capacity of 18 million tons per year, officials said, and the new Doraleh Multipurpose Port, a $590 million joint project between the ports authority and China Merchants Port Holdings opened in May last year, is already working at full capacity. It is a separate entity from the Doraleh Container Port.
Now officials are pursuing a new project called the Djibouti International Free Trade Zone, expected to be the largest of its kind in Africa.
“Once complete it will span an area of 4,800 hectares (11,860 acres), following a total investment of more than $3.5 billion,” the ports authority chairman said. The first phase is expected to be complete by the end of the year.
Djibouti’s officials anticipate that the demand for their ports will grow as more African nations expand their economies. They also dismissed concerns about a recent deal by DP World, Ethiopia and Somalia’s semi-autonomous region of Somaliland to develop and manage the Port of Berbera there, seen by some as another reason for Djibouti’s seizure of the container terminal from DP World.
“Competition will make the region more attractive. East Africa’s economies are growing fast, and there is a clear demand for Djibouti’s infrastructure to support this growth,” the ports authority chairman said.
Djibouti’s residents said local business is booming as a result of the growing international military and shipping interest, despite the country’s unemployment rate of nearly 40 percent, and construction sites and new roads dotted the city. Economic growth has attracted entrepreneurs from India, Yemen, Gulf nations and elsewhere.
“Our company provides a fleet of cars for the army bases and we are really benefiting from it,” said Nour Omar, one of Djibouti’s best-known businessmen and general manager of local import and distribution business BSH Holding. “We aim to expand our services following their demand.”
