Djiboutian ambassador to Ankara: It is high time for Turkish business world to invest in Djibouti

Menekşe Tokyay – ANKARA

Duvar English has launched a new series of interviews with the ambassadors in Ankara.

The interviews will be reachable both from our Turkish and English websites.

The political, economic, commercial, social aspects of bilateral relations as well as challenges and opportunities ahead will be elaborated in each interview.

The fourth interview is conducted with Djiboutian Ambassador to Ankara Aden H. Abdillahi, who called for greater presence of Turkish investors in his country considering the recent opportunities in terms of free trade zone.

Djibouti, lying on the Bab el-Mandeb Strait, has the advantage of being located on one of the busiest shipping routes. In 2019, Turkey exported $256 million to Djibouti, while the main products that Turkey exported to Djibouti are seed oils, raw iron bars and wheat flours.

In 2019, Djibouti exported $42.5k to Turkey, with the main products being edible preparations and electric motors.

Turkey’s exports to Djibouti reached to $319.97 million during 2020, despite the pandemic restrictions, with animal, vegetable fats and oils, iron and steel as well as milling products ranking the top.

As an observer country in the African Union, Turkey needs to develop a new path in its relations with Djibouti, the Ambassador said, emphasizing the importance of strengthening economic ties between the two countries whose friendly relations date back to the 16th century. The ambassador is also the dean of international Diplomatic Corps in Turkey.

Dear Ambassador, what is the geostrategic importance of your country?

Our country has a strategic location near Bab el-Mandeb, one of the world’s busiest shipping routes and an entry point to the Red Sea for ships coming from Asia and oil tanker from Gulf countries heading to Europe. About 30 million containers pass through Bab el-Mandeb each year, with a turnover of 700 billion dollars.

Our electrical highway between Djibouti and Ethiopia is used by 1600 trucks per day. The trade volume between Djibouti, Somalia and Ethiopia reached to 1 billion dollars per year.

Djibouti hosts the largest permanent U.S. military base in Africa along with military bases of China, France and Japan’s only foreign base.

In a nutshell, the region is booming.

When did Turkey-Djibouti relations gain momentum?

The bilateral relations took a new turn after Turkey’s Africa opening in early 2000s. In 2008, we had the first-ever Turkey-Africa summit. Djibouti embassy in Turkey was opened in 2012, a year before Turkish embassy in Djibouti was inaugurated. In 2012, Turkish Airlines also began direct flights between the two countries. In 2013, Turkey and Djibouti inked a deal for promoting and protecting of investments.

Turkish President Recep Tayyip Erdoğan paid a visit to Djibouti in January 2015, followed by the visit of his Djiboutian counterpart Ismail Omar Guelleh in December 2017 to Ankara.

So far, 60 agreements have been signed between the two countries, mostly in education, energy, health and economy fields. For instance, Turkish Government has been providing students from Djibouti with hundreds of undergraduate and graduate with scholarships since three decades. Djibouti has also some educational agreements with universities in Turkey, such as Yildirim Beyazit, Bahcesehir and Akdeniz universities. Many of these students came back to Djibouti mostly as doctors, technicians and engineers.

Turkey constructed the Ambouli Friendship Dam in Djibouti for 17.5 million Euros – the first dam that Turkish water agency has supervised outside of Turkish borders. We are so grateful for this dam construction as it prevented flooding and offered chances of agriculture. It also protected the ports and free trade zones that were under the risk of flood.

Which kind of facilities did Djibouti offer for prospective Turkish investment?

Djibouti allocated 5 million square meters of land to Turkey in its free trade zone to conduct tax-free trade operations to the region. However, this land that is close to the port is still unused although it could be used to strengthen Turkish business and allow it to reach out to the whole region with an intra-African trade.

The port facilities in Djibouti, which is the entry point of the region, are considered among the best ones throughout Africa. We have also very developed railways and highways that help investors to connect to the whole region.

We want to design a sustainable and promising relationship between the two countries, and it will be win-win cooperation not only for the public sector but also for the private sector and businesspeople. A diverse range of investment areas from health sector to the energy, agriculture and construction are offering potential of investments from Turkish side.

On the other hand, our money is linked to the dollar currency and we don't have any monetary fluctuation. We also provide tax exemptions for five years for the newcomer businessperson, which is renewable for another period. Those who run business in the free zones don't pay any tax and can conduct operations with the neighboring countries as well.

The political stability is also a factor that is taken by the business world. Djibouti is a reliable country in political sense as well. We have a functioning parliamentary and presidential systems, with regular elections for five years. Djibouti is considered as one of the stable countries of the Horn of Africa.

The piracy threat is also over since a decade thanks to the systematic operations of NATO, EU and African countries.

Now it is time for both countries to decide on what kind of partnership they would like to deepen and develop. The way of doing business and bilateral trade requires a new path by exploring new opportunities based on our thousands-years-old ties of brotherhood and friendship.

Do you think there is still an untapped potential in the bilateral trade?

Bilateral trade volume between our countries in 2019 reached 252 million Dollars. But I still think there is a long way to go to reach the real potential.

For instance, an almost 400km-long railway project help landlocked Ethiopia to have a direct access to major trade routes through the port of Djibouti.

Djibouti has established a sophisticated system for assembly lines for factories, and it is possible to engage in joint ventures on pesticides’ manufacturing, chemicals, construction materials, fertilizers, financial services and packaging.

Anyone who invests in Djibouti has the possibility to reach to intra-African trade, while Middle East is our next door. In 2019, the members of the African Union signed an African Free Trade Area agreement, and it is ratified in 2010 along with the establishment of a secretariat. This agreement will further boost intra-Africa trade with tax facilities.

Africa is the last frontier of business world, with booming population, expanded cities, increasing need for energy, food, telecommunications, as well as developing railways. And Turkey should use this potential right away.

However, we have two serious obstacles that prevent both parties to go deeper in their trade ties. We still don't have a common banking system and middle banks request huge costs of transaction. I raised this issue during my recent meeting with Trade Minister Mehmet Muş.

On the other hand, we don't have a direct shipping line, which makes the cost of freight discouragingly high. It is also not easy to find containers to transport goods, and when we find it, it is both too expensive and reaches to the destination in 2 months. I suggest developing cooperation models and partnerships between Turkish companies and Djiboutian port authorities in the free zone to build a direct shipping line between the two countries. In this way, the businessperson of Djibouti and Turkey would have much more incentives to conduct trade operations through an easy and cost-effective line.

It is high time to do it. I can also assure you that the ambassadors in Ankara are among the most qualified ones with high expertise on trade, and they can be reached anytime by Turkish businesspeople who are willing to invest in African trade.

How often do the high-level authorities of the two countries meet?

Since the visit of the Turkish and Djiboutian presidents to each other’s countries in 2015 and 2017 respectively, there is always the visit of a high-level politician and trade delegation almost each month. Lastly, the Djibouti and Turkey’s speakers of the parliament paid reciprocal visits, accompanied with the members of their parliaments, while Turkish president of the Grand National Assembly, Mustafa Sentop, also attended the 42nd Conference of the African Parliamentary Union in 2019.

The fourth Turkey-Djibouti Joint Economic Commission (JEC) meeting was also held in Ankara on 18-19 February 2020 where Turkish Minister of Foreign Affairs Mevlut Cavusoglu met his Djiboutian counterpart Mahmoud Ali Youssouf. In December 2021, President Erdogan met with his Djiboutian counterpart on the sidelines of the 3rd Turkey-Africa Partnership Summit in Istanbul.

In the meantime, almost 60 percent of available farming land of the world is located in Africa. What could be the potential of your country for Turkish businesspeople to conduct agricultural operations?

Agriculture in Africa has a brilliant future and I strongly suggest Turkish businesspeople to take note of it to engage in intra-Africa trade that would be very lucrative. We have water resources, biggest rivers, and lakes. I think there is the necessary infrastructure to produce rice, wheat, and flour. We have an established system for public-private-partnership model and Turkish businesspeople can also build joint ventures.

Dear Ambassador, I’m sure that you have a great potential of tourism. But, it seems that the Djiboutian tourism capacity is still unknown for Turks.

Yes you are right. Tourism potential is untouched in Djibouti although we have diving opportunities in the ocean and inhabited islands around. Many of my friends in Turkey are going to Djibouti just for diving and they have great experiences there. I would suggest Turkish businesspeople to discover the tourism potential in Djibouti and in its islands where the construction of touristic facilities and hotels is more than welcome. Turkish Airlines flies each day to Djibouti and the flight takes only five hours.

Thank you for this opportunity, Dear Ambassador. I see that Turkey-Djibouti relations reside on a meaning beyond trade and economy. We need such strong friendship ties especially these days where the world passes through several bloody conflicts and wars. And I’m sure that all relevant actors will discover soon the booming opportunities for the bilateral ties.