VZCZCXRO1691
RR RUEHROV
DE RUEHDJ #1296/01 3002042
ZNR UUUUU ZZH
R 181353Z OCT 09
FM AMEMBASSY DJIBOUTI
TO RUEHC/SECSTATE WASHDC 0960
INFO IGAD COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 04 DJIBOUTI 001296 
 
SIPDIS 
STATE FOR AF/E, E/EEB, AND AF/EPS 
NAIROBI FOR FCS 
ADDIS ABABA FOR REGIONAL ENVIRONMENT OFFICER 
 
E.O. 12958: N/A 
TAGS: ECON SENV EFIN ETRD EFIS ELAB EWWT EAGR DJ
SUBJECT: DJIBOUTI JULY-SEPTEMBER ECON-ESTH ROUNDUP 
 
REF: 09 DJIBOUTI 439; 08 DJIBOUTI 545 
 
¶1.  In this issue: 
 
 
 
--Djibouti's new banks expand product ranges, customer base 
 
--Djibouti aiming to exploit underutilized fishing stocks 
 
--A new airline and an increase in passengers 
 
--GODJ economic statistics point to gains in tourism, 
import-export, and agriculture 
 
--New Environment Code 
 
--Multi-donor project to protect Djibouti's remnants of an ancient 
forest 
 
--Chinese energy deal 
 
--National Employment Agency on Djibouti's structural employment 
challenges 
 
 
 
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-------------------------- 
 
DJIBOUTI'S NEW BANKS EXPAND PRODUCT RANGES, CUSTOMER BASE 
 
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-------------------------- 
 
 
 
¶2. Several of the newcomers to Djibouti's growing financial 
services sector (ref A) recently reported positive growth and 
unveiled new services: 
 
 
 
--The Djibouti branch of the Yemen-based Cooperative and 
Agricultural Credit (CAC) Bank opened a new headquarters in the 
downtown banking district August 16.  CAC had previously been 
located in an area relatively inaccessible to the general public 
inside the port of Djibouti.  CAC employs 30 people, most of whom 
are Djiboutian.  It has put an emphasis on e-banking products, and 
on attracting previously underserved groups, including low- and 
medium-income families.  In addition, CAC hopes to serve the large 
number of small-scale, Djibouti-based traders who import goods from 
Yemen. 
 
 
 
--Saba Islamic Bank's Djibouti branch, inaugurated in 2006, 
recently announced a deposit growth rate of 144 percent in 2008. 
Saba has invested in low-income housing construction projects, and 
plans to expand its automatic-teller network and introduce a 
text-message banking service.  The Yemen-based bank has a team of 
40, of whom 35 are Djiboutian nationals. 
 
 
 
--The Deposit and Credit Bank of Djibouti (DCBD) signed an 
agreement with the European Commission in June, allowing the 
European Investment Bank to hold shares in DCBD's capital.  This 
agreement will support Djibouti's National Initiative for Social 
Development aimed at promoting economic growth by developing the 
private sector.  BDCD hopes that the agreement will also help 
expand the bank's customer base among small and medium-sized 
businesses. 
 
 
 
--Salaam African Bank, another recently-established Islamic bank 
with strong ties to Somalia, became the first bank in Djibouti to 
offer e-banking services in June, after signing an agreement with 
state-run monopoly Djibouti Telecom. 
 
 
 
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DJIBOUTI 00001296  002 OF 004 
 
 
DJIBOUTI AIMING TO EXPLOIT 
 
UNDERUTILIZED FISHING STOCKS 
 
-------------------------------------------- 
 
 
 
¶3.  According to coverage in the national state-run newspaper "La 
Nation," plans are underway for a new fishery at Dammerjog, outside 
of Djibouti City.  The facility, funded by GODJ poverty-reduction 
programs, is to include a cold room, ice-making machine, generator, 
water supply system, and desalination unit.  Fishing currently 
accounts for less than one percent of Djibouti's GDP, and supports 
about 1000 people.  The fishing fleet of about 300 boats consists 
largely of 7 to 10 meter boats with outboard motors.  On average, 
Djiboutian fishermen catch about 70 kg of fish per day, using lines 
and nets. 
 
 
 
¶4. In June, President Guelleh inaugurated a new food analysis 
laboratory, in part aimed at helping Djibouti reach European Union 
export standards for seafood.  The laboratory is managed by the 
Saudi Arabian company DAFCO, while the GODJ owns a 15 percent share 
in the project.  DAFCO has pledged an investment of USD 10 million 
in helping train local fishermen and develop small and medium 
businesses to can sardines and other species.  Ministry of 
Agriculture officials have estimated that Djibouti only exploits 
about 5 percent of its fishing potential of over 40,000 tons. 
Workshops in July also aimed at educating fishers and vendors on 
good hygiene practices. 
 
 
 
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A NEW AIRLINE AND AN INCREASE IN PASSENGERS 
 
--------------------------------------------- ---------------------- 
 
 
 
¶5. U.A.E.-based budget airline Fly Dubai began serving Djibouti 
September 1 with three direct flights a week to Dubai.  In light of 
Dubai Ports World management of Djibouti's port and airport and 
other U.A.E-Djibouti economic ties, Fly Dubai hopes to serve a 
growing passenger base.  Recent GODJ economic statistics point to 
an overall slight increase in passenger loads, with Ethiopian 
Airlines, Yemenia Airlines, and Jubba Air enjoying increases in 
passenger numbers. 
 
 
 
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GODJ ECONOMIC STATISTICS POINT TO GAINS IN 
 
TOURISM, IMPORT-EXPORT, AND AGRICULTURE 
 
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¶6.  According to recent statistics from the GODJ's Ministry of 
Finance, Djibouti enjoyed gains in several industries in 2008: 
 
 
 
--TOURISM: Between 2000 and 2008 the number of tourists visiting 
Djibouti grew by 166 percent.  Of 53,600 arrivals in 2008, 
seventeen percent were from Gulf States, with five percent from 
Asia (principally Japan), and three percent from the U.S. and 
Canada. 
 
 
 
--IMPORT-EXPORT: The Port of Djibouti saw a 29 percent increase in 
imports and an 8 percent increase in exports in 2008, with overall 
tonnage growing from just over 6 million tons in 2007 to 8 million 
tons in 2008.  Transshipment also grew by 56 percent from 2007. 
Petroleum product imports were up by 10 percent.  (NOTE.  These 
data were collected prior to the opening of the Doraleh Container 
Terminal at the end of 2008, which has led to a major increase in 
 
DJIBOUTI 00001296  003 OF 004 
 
 
port traffic.  END NOTE.) 
 
 
 
---AGRICULTURE: Djibouti saw a 25 percent increase in livestock 
exportations in 2008, with camels as the leading growth sector.  In 
cultivation, Djibouti's production of fruits and vegetables almost 
doubled between 1993 and 2008, although the locally-grown supply in 
greenhouses and oases does not yet nearly cover local demand, and 
most fruits and vegetables are imported from neighboring countries 
(ref B).  The southern region of Dikhil boasts the most cultivated 
land in Djibouti, with 522 hectares out of a national total of 
1,800 hectares in 2007-2008.  Less than one percent of Djibouti's 
land is arable. 
 
 
 
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NEW ENVIRONMENT CODE 
 
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¶7. On July 1, the GODJ promulgated a new Environment Code.  The new 
code establishes Djibouti's environment as part of the national 
patrimony for current and future generations.  It sets out basic 
rules and fundamental principles for environmental protection and 
management, in conformity with sustainable development principles 
and multilateral environmental agreements.  While guaranteeing that 
every citizen has the right to enjoy a healthy environment, the law 
also stipulates that every citizen has the obligation to preserve 
and protect the environment. 
 
 
 
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MULTI-DONOR PROJECT TO PROTECT 
 
DJIBOUTI'S REMNANTS OF AN ANCIENT FOREST 
 
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¶8. A new USD 11.6 million multi-donor project in Djibouti's 
northern Day Forest, the PROMES-GDT (Program for the Mobilization 
of Surface Waters and Sustainable Land Management) aims to educate 
the local population on protecting a unique ecosystem, allow for 
sustainable use of forest resources to generate income for local 
families, and begin replanting the forest.  Day Forest is a remnant 
of a much larger ancient forest, located in a mountainous region in 
Djibouti's north.  The forest supports up to 60 percent of 
Djibouti's biological diversity, including the endangered 
"francolin," Djibouti's most famous bird.  In the last 200 years, 
it has shrunk from over 7,500 hectares to 1,500 hectares.  While a 
volcanic eruption helped destroy some of the forest's area, human 
impact has also played an important role.  Some two-thirds of the 
forest's juniper trees have died and/or been harvested, as people's 
use of the forest for pasture and wood increasingly impacts a 
fragile ecosystem. 
 
 
 
------------------------------ 
 
CHINESE ENERGY DEAL 
 
------------------------------ 
 
 
 
¶9. The GODJ signed two energy agreements July 27 with the Chinese 
company China Gezhouba Group Company Limited (CGCG).  CGCG is to 
carry out geothermal and mining exploration at several sites 
throughout Djibouti, and to build a gas terminal and a gas-fueled 
electric power plant with a 150 MW capacity.  The GODJ has 
aggressively sought investment in energy, and especially in 
renewable energy development, from a variety of sources.  Djibouti 
has signed agreements with private investors on wind and solar 
projects, and with the Government of Iceland on geothermal 
development.  Djibouti continues discussions with other investors 
on renewable energy, and met with a United Arab Emirates delegation 
 
DJIBOUTI 00001296  004 OF 004 
 
 
in July. 
 
 
 
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NATIONAL EMPLOYMENT AGENCY ON DJIBOUTI'S 
 
STRUCTURAL EMPLOYMENT CHALLENGES 
 
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¶10.  In 2007, the GODJ created a National Agency for Employment, 
Training, and Professional Insertion (ANEFIP).  All job-seekers are 
technically required to register with ANEFIP, although this 
provision is often disregarded in practice.  ANEFIP is also charged 
with managing and registering private employment agencies.  It has 
received some external financing (notably from Switzerland), and 
has set up a web site with job postings.  In the future, ANEFIP 
plans to set up a separate service for young graduates.  In 
coordination with the National Investment Promotion Agency (NIPA), 
ANEFIP also plans to conduct a survey of companies that invested in 
Djibouti and signed agreements with NIPA, to evaluate whether such 
companies had fulfilled promises to create a certain number of 
jobs, and why or why not. 
 
 
 
¶11. ANEFIP Director Mohamed Ali Kamil recognizes that Djibouti's 
economic growth does not automatically translate into easy hiring 
opportunities for young Djiboutians, who face an unemployment rate 
of 59 percent.  The problem, Kamil recently told EconOff, is that 
Djibouti "doesn't have the product employers are looking for." 
Employers-including new employers centered on the port and 
port-related services-are uniformly looking for workers with 
experience, computer skills, and English language ability.  ANEFIP 
is working with its training center to educate job-seekers in these 
skills, but acknowledges that matching supply to demand is a 
challenge. In the second quarter of 2009, only 70 job-seekers of 
693 registered with ANEFIP found employment. 
SWAN