19 Aug 2019
Manufacturing in East Africa: Djibouti
The government’s logistics hub ambitions form a major component of the country’s long-term vision, ‘Djibouti 2035’. The government has sponsored projects across the road, rail, port and airport sectors in a bid to position Djibouti as the ‘Dubai of Africa’ – a premier hub for logistics, manufacturing and financial services in the region.
There are no significant manufacturing clusters in Djibouti and the government is prioritising sectors other than manufacturing for development. The rapid expansion of free trade zones in cooperation with Chinese firms will create potential for investment in manufacturing capacity. However, the small size and low skill levels of the local labour force will limit the scope for manufacturing clusters.
Djibouti’s strengthening relationship with China will remain a central theme of economic development in the coming years. Since 2017, the country has hosted China’s first overseas military base and Chinese investment in large-scale transport projects has been prominent.