Displaying items by tag: Djibouti

Thirteen presidential and legislative elections are scheduled to take place in Africa during the course of 2021, despite the presence of COVID-19.

While fear of contracting COVID-19 has possibly contributed to lower voter turnout, it is not the only reason people are staying home from the polls. Across the continent, there have been many reports of security crackdowns on public rallies, intimidation of opposition parties their leaders fleeing into exile if they have not been arrested and much of the media has been muted with many journalists being harassed, threatened, and imprisoned.  

The legitimacy of a country’s electoral process is closely tied to its prospects for stability.

In a number of countries, such as Uganda, Chad, the Republic of the Congo, and Djibouti, leaders have held their seats for decades, and are holding onto their positions by any means necessary including force removal of term limits, and giving limited operating space to opposition parties. Increased internal conflict in many countries as a result of increased corruption, lack of accountability, and lack of reform, is threatening to undermine the economic stability of the entire Horn of Africa region.

Transparency International’s Corruption Perceptions Index, for example, ranks Uganda and Djibouti at 142 out of 180 countries; Chad at 160 out of 180; the Republic of Congo at 170 out of 180.

In it’s CPI 2020: SUB-SAHARAN AFRICA Report it reveals that Sub-Saharan Africa with an average score of 32 is the lowest performing region on the CPI, showing little improvement from previous years and underscoring a need for urgent action. There is a desperate need for reform in every sector of each of these countries, if their economies are to be salvaged, security improved, and youthful populations employed.

Tensions high

In January 2021, Uganda’s national electoral commission declared President Yoweri Museveni the winner of a sixth term with 58% of the vote, but the results have been widely contested. The main opposition candidate Robert Kyagulanyi was placed under house arrest for 12 days post-election, and opposition parties called for national defiance of Museveni’s government. Human rights groups and foreign governments slammed the government for shutting down the internet during the election, and banning outside voting observers.

Yoweri Moseveni Supporters after election Celebration Reuters

Elections in Somalia which were scheduled for the 8th of February 2021, are yet to take place due to lack of agreement on how the vote should happen. As protests and tensions grow in the country, the U.N. Security Council has urged Somalia’s government to organize elections “without delay” in a resolution that stressed the pressing threat to the country’s security from al-Shabab, and armed opposition groups. The UN resolution, which was adopted unanimously, authorized the African Union to maintain its nearly 20,000-strong force in Somalia until the end of the year, with a mandate to reduce the threat from the extremist groups.

In Niger, accusation of election irregularities have led to mass protests and government repression. On February 23rd, 2021, the country’s Independent National Electoral Commission (CENI) declared, Bazoum, the ruling party’s candidate and a former minister of the interior, the winner with 55.75 percent of the vote. Ousmane, who won 44.25 percent of the vote, carried the opposition strongholds of Tillabéry, which includes the capital, Niamey, and Zinder. Despite CENI’s announcement, however, Ousmane declared himself the winner.

Republic of Congo’s election held on 21st March 2021 was the first time that voters went to the polls in two phases since the first multi-party presidential election in 1992. In power for 36 years, the country’s 77-years old incumbent president Dennis Sassou Nguesso is one of the longest serving presidents in Africa. His challengers included Mathias Dzon, the former Minister of Finance between 1997-2002 and just until recently, the late Guy-Brice Parfait Kolélas, who died of COVID-19 complications.

Up next - elections in Djibouti

Free and fair elections are the cornerstone of democracy, and are one of the major drivers of foreign investment into any country.

Djibouti map

 

On the 9th of April 2021, Djiboutians go to the polls, as President Omar Guelleh attempts to extend his tenure to a fifth term in the country’s presidential elections. Guelleh has been in power since 1999, a total of 22 years. Term limits that stated that Presidents could only serve two terms were lifted in 2010, just prior to his third term.  

The media is not free in Djibouti. The 2020 World Press Freedom Index ranks the country at 176th place out of 180, down three places since 2019. Reporters Without Borders (RSF) report that there is no privately-owned or independent media outlet operating in the country. Media outlets that are operating are used for propaganda purposes by the government.

Djibouti journalists live in fear. There is one exile station, La Voix de Djibouti that broadcasts from Belgium, but the signal is often jammed and its website blocked. In 2019, a La Voix de Djibouti reporter, based in Djibouti, was badly beaten and arrested several times.

Members of opposition parties even those recognized by the electoral commission are harassed, arrested, and prosecuted. In September 2020, several opposition parties joined together under the banner of the USN Coalition aimed at blocking a fifth Guelleh term. They want elections delayed until the Election Commission is reformed, and until that happens, they are calling for a transitional government.

Djibouti is strategically located near the Bab al Mandeb, and its access to maritime traffic through the Indian Ocean and into the Red Sea has resulted in the country hosting naval bases of France, China, Japan, and the United States. This has meant there is little international pressure on the country to reform.

The government draws much of its revenue from port and basing fees and it took on external debt of 103 percent of GDP to support rail, port, and the requisite power projects. Between 2019 and 2021 Djibouti’s debt service payments have increased by around 120 percent leaving the country and its people in high risk of debt distress. There are high levels of inequality and poverty in the country, unemployment sits at 48 percent, and as the youth continue to struggle to find employment, their discontent is rising.

Djibouti Free Trade Zone

In order to overcome these challenges, the country needs to court foreign investors who are intent on improving infrastructure, facilitating international trade and creating jobs in a dampened economy.

While in theory there are no laws practices or mechanisms that discriminate against foreign investors, navigating their bureaucracy can be complicated. According to the US Department of State’s 2020 Investment Climate Statements: Djibouti, “Government policies are sometimes not transparent and do not foster competition on a non-discriminatory basis. Likewise, the legal, regulatory and accounting systems are not always transparent nor are they consistent with international norms.” This poses a potential threat for foreign investors like DP World who are currently pursuing all “legal means” to defend its claim to a Djibouti terminal, after the African nation nationalized the facility.

According to recent reports, the concession agreement between DP World and Djibouti signed in 2006 is governed by English law through the London Court of International Arbitration. The decision by Djibouti to nationalize the Doraleh Container Terminal came after the government scrapped a 50-year concession contract with DP World, triggering a dispute between the two sides.

DP World is believed to have won three rulings from Britain-based courts over the matter, most recently an injunction at the High Court in London on August 31, 2020, however Djibouti’s government is failing to accept and implement the rulings from the British-based courts. When you consider the financial losses DP World faces, since the terminal was nationalised, as well as the legal costs that continue to mount, one must carefully consider whether investing in Djibouti would be a safe bet.

While DP World clearly continues to see value and invest in the Horn of Africa recently signing an agreement worth US$442 million to expand and operate a regional trade and logistics hub at the Port of Berbera, in partnership with the Somaliland Port Authority and Ethiopia there are perhaps strong reasons for international investors to hold their breath and adopt a wait-and-see approach when it comes to the results of presidential elections not only in Djibouti but in Benin, Chad, Sâo Tomé and Principe, Zambia, and other countries who are going to the polls nearer the close of the year.

Published in Business

The activities of the Djibouti Sovereign Fund (Fonds Souverain de Djibouti - FSD) were officially launched on Monday, September 14 at the presidential palace in the capital. Following the implementation decrees promulgated on June 24, 2020, a special inter-ministerial committee was held under the high authority of President Ismaël Omar Guelleh, in the presence of the Prime Minister, members of the government and the Fund's administrators.

The Sovereign Fund presents itself as an ambitious and innovative financial instrument aimed at turbocharging the country's development. It will strive to modernize the country's economy, to boost the growth of a competitive private sector and to enhance the development of the public productive sector, one of the essential instruments of this transformation.

Among the personalities present were the co-chairmen of SouthBridge, Mr. Donald Kaberuka (in videoconference) and Lionel Zinsou, as well as Mr. William Ediko, partner, who advised the Republic of Djibouti in setting up the Fund. Also present, Mr. Amir Jahanguiri, partner at law firm Willkie Farr & Gallagher, who advised the government for this project.

The holding of the inter-ministerial committee was also an opportunity to formalize the appointment of the Managing Director of the FSD, the Senegalese Mamadou Mbaye. A seasoned professional, Mr. Mbaye is a graduate of École Polytechnique and École nationale de la statistique et de l'administration économique (ENSAE) in France. He brings with him an outstanding experience in both the private and public sectors. He was previously Vice-President of the Sovereign Fund for Strategic Investments of Senegal (Fonsis).

The creation of the FSD is a flagship measure of the "Vision 2035", a long-term development strategy of the Republic of Djibouti which aims to position the country as a leading commercial, logistics, port and digital hub.

Established in the form of a private limited company whose sole shareholder is and will remain the State of Djibouti, the Fund aims to "collect" national wealth to leverage Djibouti's ability to invest quickly. 

Published in Economy

The upsurge of Somali piracy after 2005 led to significant international activity in the Horn of Africa. Naval missions, training programmes, capital investment and capacity building projects were among the responses to the threat. States in the region also started to focus on the dangers and opportunities associated with the sea.

Kenya and Djibouti, two states directly affected by piracy, achieved widespread reform of their domestic maritime sectors through new national initiatives and assistance from external partners. Djibouti’s President Ismail Guelleh recently commented during talks with Kenya on security and trade links that

What happens in Somalia has an immediate impact on all of us.

At its height, between 2008 and 2012, it is estimated that Somali piracy cost the Kenyan shipping industry between US$300 million and $400 million every year. This was as a result of increased costs (including insurance) and a decline in coastal tourism. It also damaged Djibouti’s maritime industry, financial sector and international trade.

The upsurge of piracy after 2005 had a number of causes. It grew from poverty and lawlessness in Somalia alongside opportunity and a low risk of getting caught. By 2013 the threat had been reduced. This was due to a combination of naval patrols, private armed guards, self defence measures on board ships and capacity building efforts ashore.

Historically, most states in the Horn of Africa have struggled with limited capacity to address maritime insecurity. Their naval assets, training, human resources, institutional and judicial structures, monitoring and surveillance have all been critically underfunded.

But the international response to piracy – and the investments and partnerships that emerged – have helped some states to improve in these areas.

More importantly perhaps, since the decline in piracy attacks, Kenya and Djibouti have been paying more attention to policies around maritime governance and “blue” economic development. This relates to sustainable use of ocean resources for economic growth, job creation and ocean ecosystem health. The refocus marks a shift from traditional investments related to land based conflict and land borders.

In a recent article, I examine how Kenya and Djibouti reformed their domestic maritime sectors following a decline in acts of piracy. The study sheds new light on the limitations and challenges facing domestic maritime sectors in Africa as well as some of the innovative approaches taken.

A key point is that blue economic growth is not possible without addressing security threats at sea. This includes building a robust maritime security sector, improving ocean health and regulating human activity at sea in a more sustainable way.

International partnerships

Many of the new developments in the region have been supported by international partners. The Djibouti Navy and Coastguard work closely with the US Navy. Together, for example, they are developing capacity for stopping and searching suspicious vessels. This is important in countering the illicit trafficking in people and smuggling of migrants through Djiboutian waters.

Djibouti has also benefited from Chinese direct investment, which accounts for nearly 40% of the funding for its major investment projects. Chinese state-owned firms have built some of Djibouti’s largest maritime related infrastructure projects. These include the Doraleh Multipurpose Port, a new railway connection between Djibouti and Addis Ababa, and the opening of China’s first foreign military facility.

This is a clear example of Beijing prioritising its growing economic and security interests in Africa. And advancing its “massive and geopolitically ambitious” Belt and Road Initiative.

Kenya, too, has received international assistance and investment. This includes support to set up the Regional Maritime Rescue Coordination Centre in Mombasa. Organisations like the International Maritime Organisation have led training for staff from the centre and for the Kenyan Navy.

The United Nations Office on Drugs and Crime has provided law enforcement training for the Kenyan Maritime Police Unit. It also opened a new high-security courtroom in Shimo La Tewa, Mombasa, for cases of maritime piracy and other serious criminal offences.

National refocus

At a national level, there is evidence of a fundamental shift towards building a more secure and sustainable domestic maritime sector.

For example, Kenya has created a new coastguard service. Its job is to police the country’s ocean territory and to ensure that Kenya benefits from its water resources. The country has new naval training partnerships, maritime capacity building projects and an implementation committee to coordinate “blue economic” activities. These include fisheries, shipping, port infrastructure, tourism and environmental protection.

For its part, Djibouti has rapidly developed its maritime sector and recognised the financial benefits of leasing coastal real estate. The country has an ambitious development plan titled “Djibouti Vision 2035”. This sets out its aspiration to become a maritime hub and the “Singapore of Africa”. It’s trading on the fact that it has a similar strategic position along one of the world’s busiest shipping lanes.

All of these approaches require robust laws and regulations governing human activities at sea. They also call for a capable and flexible coastguard and navy to enforce these regulations and secure coastal waters against threats such as piracy, fisheries crime and the illicit smuggling of drugs, weapons and people.

The way forward

There are lessons in the Horn of Africa experience for other regions of Africa facing similar maritime insecurities. One example is the Gulf of Guinea.

The first lesson is that there’s a need to convince coastal states with weak maritime capacities of the untapped potential of the blue economy. Even reputational damage can harm tourism, development and investment in coastal regions. This was clearly illustrated in the case of Kenya.

Blue economic growth needs a safe and secure maritime environment for merchant shipping in particular. It can also help alleviate poverty in coastal regions, provide alternatives to criminal livelihoods, and allow local communities more ownership of issues that affect them.

Ultimately, maritime security and blue economic growth need to be considered as a unified policy issue.The Conversation

 

Robert McCabe, Assistant Professor, Coventry University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Economy

The London Court of International Arbitration proceeding rules against the government of Djibouti to pay Dubai-based DP World, which owns 33.3 percent of Doraleh Container Terminal (DCT), a Djibouti port.

The tribunal has ordered Djibouti to pay DCT $385 million plus interest for breach of its exclusivity by development of container facilities at Doraleh Multipurpose Terminal, with further damages possible if Djibouti develops a planned Doraleh International Container Terminal with any other operator without the consent of DP World.

The tribunal has found that by developing new container port opportunities with China Merchants Holdings International Co Limited, a Hong-Kong based port operator, Djibouti has breached DCT’s rights under its 2006 concession agreement to develop a container terminal at Doraleh.

It added: “In respect of the development of the Djibouti Multipurpose Port facility, the facts are clear. At no stage before the decision was made to go ahead with that facility with China Merchants did… Djibouti… offer… DCT… the right to develop the proposed container facilities at the DMP.

“Djibouti was therefore in breach of clause 3.6.3 of the Concession Agreement”. China Merchants also operates a $3.5 billion free trade zone it developed pursuant to an agreement with Djibouti, in contravention of DP World’s exclusive right to develop and operate such a free zone under its own concession, which is the subject of other litigation proceedings.”

The tribunal also ordered Djibouti to pay DCT $148 million for historic non-payment of royalties for container traffic not transferred to DCT once it became operational. Djibouti is also ordered to pay DCT’s legal costs.

This is the fifth substantial ruling in DCT and DP World’s favour on disputes relating to the Doraleh terminal.

DCT and DP World said they continue to seek to uphold their legal rights, following Djibouti’s unlawful efforts to expel DP World from Djibouti and transfer the port operation to Chinese interests.

Litigation against China Merchants also continues before the Hong Kong courts.

In February 2018, the Djibouti government cancelled DP World’s contract, signed in 2006, to run the Doraleh Container Terminal. DP World claimed this attempted renationalisation was illegal and began court proceedings, resulting in the the latest ruling.

 

Credit: ArabianBusiness.com

Published in Economy
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