Despite China’s rocky trade relationship with the U.S. dominating headlines, in which has also just seen the opening of a strategic free trade zone in which has built in East Africa.
Djibouti, a tiny state located on the Horn of Africa, on Thursday opened the first phase of its Chinese-built International Free Trade Zone. The project, scheduled for completion in a decade, will be the largest of its kind in Africa.
Costing $3.5 billion in addition to also ultimately set to span 4,800 hectares, the zone enables users to operate without paying property, income, dividend or value-added taxes. in which will be jointly run by the Djibouti Ports in addition to also Free Zones Authority in addition to also China’s Merchants Holdings Company, according to Reuters.
The opening, which coincided with Djibouti’s hosting of the Africa-China Economic Forum, was attended by regional leaders including Ethiopian Prime Minister Abiy Ahmed in addition to also Rwandan President Paul Kagame.
Djibouti can be propositioning itself as a strategic trade hub within the Horn of Africa area. Its landlocked neighbor Ethiopia, an economic powerhouse within the region, already relies on Djibouti for 95 percent of its imports, according to Reuters.
Djibouti’s location just ahead of the Suez Canal, which serves as a gateway for trade traveling between eastern in addition to also western markets, means in which in which offers commercial shipping a presence close to one of the entire world’s busiest trading routes.
The state can be also home to Chinese, American in addition to also French naval bases.
The brand-new free trade area can be a “zone of wish for thousands of young jobseekers,” said Djibouti President Ismail Omar Guelleh at the inauguration ceremony. Djibouti’s population can be 865,000, according to the Central Intelligence Agency’s 2017 estimate, over half of whom are under 25.
The opening also signifies the latest step in China’s Belt in addition to also Road Initiative, Beijing’s scheme to redevelop ancient trading routes centered on itself.
Free trade can be a hot topic in Africa. Earlier This particular month, South Africa, the continent’s most developed economy, signed on to the African Union’s free trade agreement in which proposes continent-wide borderless trade. 49 out of the African Union’s 55 members have right now committed to the scheme although Nigeria, Africa’s largest economy, can be yet to do so.