Djibouti’s Strategic Approach to Maximizing AfCFTA Benefits for the Private Sector

Djibouti, July 5, 2024 (ECA) – Positioned at a crucial intersection of trade routes, Djibouti’s strategic geographic location underscores its potential as a critical player in regional integration and economic growth. The African Continental Free Trade Area (AfCFTA), with its promise of expanded markets, economic diversification, and enhanced competitiveness, offers Djibouti a significant opportunity to strengthen its economy. However, realizing these benefits requires a nuanced and strategic approach.

The Promise of AfCFTA for Djibouti

The AfCFTA aims to create a single continental market for goods and services, with free movement of businesspersons and investments. For Djibouti, this means access to a larger market, increased foreign direct investment potential, and opportunities to develop regional value chains. These benefits could lead to substantial economic gains, enhancing the country’s resilience and growth prospects.

Challenges and Strategic Requirements

To fully harness the AfCFTA’s potential, Djibouti faces several challenges:

• Compliance and Regulatory Alignment: Adherence to AfCFTA rules and regulations is crucial. This requires a robust legal and regulatory framework aligned with the Agreement’s standards.
• Political Will and Institutional Capacity: Strong political commitment and continuous improvement in institutional capacities are necessary to drive the implementation process.
• Infrastructure Development: Upgrading infrastructure, including transportation and logistics, is vital to facilitate trade and attract investment.
• Stakeholder Involvement: A comprehensive implementation strategy requires engaging all relevant stakeholders, including the private sector.
• Technical Skill Enhancement: Continuously enhancing technical skills among stakeholders ensures they can effectively navigate and leverage the AfCFTA framework.

Djibouti’s National Implementation Strategy

Djibouti ratified the AfCFTA agreement in May 2022. Recognizing the importance of a strategic approach, the government, with support from the United Nations Economic Commission for Africa (ECA), has developed a National Implementation Strategy. This strategy includes detailed action plans focused on capacity building for both public and private sector stakeholders.

Upcoming National Workshop: A Strategic Move

From July 9-11, 2024, Djibouti will host a national workshop in collaboration with the ECA. This workshop aims to enhance stakeholders’ understanding of AfCFTA’s rules, instruments, procedures, and opportunities. The workshop’s objectives highlight Djibouti’s strategic approach:

1. Enhanced Stakeholder Understanding:
   • Improve the understanding of AfCFTA among critical stakeholders, including private sector representatives and future members of the National Committee.
   • Foster a collaborative environment to ensure comprehensive knowledge transfer.
2. Capacity Building:
   • Equip stakeholders with essential knowledge about the operational aspects of the AfCFTA.
   • Provide strategic advice and identify best practices for effective implementation.
3. Experience Sharing and Strategic Advice:
   • Facilitate sharing experiences and best practices to encourage collaborative learning and practical application.
   • Develop concrete recommendations tailored to Djibouti’s context for optimizing AfCFTA benefits.
4. Infrastructure and Institutional Development:
   • Emphasize the importance of infrastructure development and institutional capacity building.
   • Ensure sustained political determination to support the implementation process.

Conclusion

Djibouti’s strategic approach to leveraging the AfCFTA underscores its commitment to regional integration and economic growth. By focusing on comprehensive stakeholder engagement, capacity building, and continuous improvement in infrastructure and institutional capacities, Djibouti aims to maximize the benefits of the AfCFTA. The upcoming national workshop represents a significant step towards achieving this goal, positioning Djibouti as a proactive and strategic player in the continental free trade landscape.

This strategic initiative promises economic benefits and sets a precedent for other countries in the region, highlighting the importance of a well-planned and inclusive approach to regional trade agreements.