Youssef Dawaleh, President, Chamber of Commerce of Djibouti: Interview

Interview: Youssef Dawaleh

How can cooperation between local enterprises and international investors be strengthened?

YOUSSEF DAWALEH: It is important to highlight that beyond arbitration, the Chamber of Commerce is willing to encourage the participation of the local private sector in on-going big investment projects in Djibouti, and, more specifically, those related to transport infrastructure. This participation can manifest itself through partnerships or joint ventures between international companies – which have the know-how and the necessary financial resources to conduct these projects – and national companies, which have better knowledge of the local realities and regional environment. Other types of partnerships are also envisaged such as sub-contracting with local companies for some up-coming projects.

For us, these partnerships will guarantee the success of these investment projects as they will ensure the sustainability of the infrastructure and equipment as well as the positive impact of economic growth through social development and the transfer of skills and expertise.

What role do local small and medium-sized enterprises (SMEs) play in the realisation of large-scale development projects?

DAWALEH: There is a gap between investment in the country and the participation of Djiboutian SMEs. The SMEs are very dynamic, but have difficulties due to their limited access to finance, a lack of education with regards to private sector needs and a lack of competitiveness. In order for the SME sector to flourish there are three points that need to be taken into account: financing has to be made accessible, the education system has to be tailored to the needs of the private sector, and the price of energy has to be decreased. Financing is a major issue which the “Fund for Guarantees” is likely to solve, by attracting investors who can worry less about potential fiscal risks.

The fiscal reforms that have been put into place by the High Commission on Public-Private Dialogue, and initiatives taken to diversify energy resources, are paving the way for further private sector development. The chamber plays an important role in presenting the needs of the private sector to the government. There have been 610 recommendations made by the private sector to the government, focusing on improving the business climate in the country.

The public authorities have taken up these points and divided them into objectives for the short, medium and long term. Promoting a Djiboutian SME sector that can deliver and assist international investors is key to employment creation. Applying international standards and procedures will allow for mutual recognition and trust. Beyond the guarantee fund, other initiatives are being studied in terms of access to financing for companies such as the creation of new financing tools, the development fund and leasing.

What measures can be taken to increase the amount of foreign direct investment (FDI)?

DAWALEH: In order to encourage FDI, an important point is the one-stop shop mechanism that has to be implemented swiftly. Allowing foreign enterprises to deal with their whole registration procedure in one place will not only lead to more efficiency; it will also make the country more attractive for investment. There has to be clarity for the investor about which sector one can invest in and what the advantages and opportunities are in the marketplace.

Another important aspect of the government’s plan is the availability of local labour and potential partners for collaboration. The set-up of the Certified Management Centre, which will oversee the training of local staff in formal procedures, linguistic abilities and ability to come up with business plans, will serve both the local SME sector and foreign investors who needs access and an introduction to qualified labour.