Djibouti’s Vision 2035: Boosting Local Construction with Local Inputs

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Djibouti, a small East African nation, has set its sights on a long-term development agenda known as
Djibouti Vision 2035. Central to this blueprint is the aim to enhance access to locally produced
construction inputs. The government recognizes the significance of promoting the industrial
production of construction materials, including cement and other building supplies, to meet the
growing demands of the local market for construction and public works. By reducing reliance on
imports and lowering building costs, these initiatives have the potential to drive sustainable
development and economic growth.

Building Local Capacity
Djibouti’s domestic cement production has faced challenges due to high electricity costs that
discourage large energy consumers like cement and steel companies. However, the country
currently operates two main cement production units. The government-owned Cimenterie d’Ali-
Sabieh plant, established in 2013, has an annual capacity of 240,000 tonnes and primarily serves the
domestic market. Additionally, the privately owned Nael Cement Products, based in the United Arab
Emirates (UAE) and inaugurated in the same year, boasts an annual capacity of 220,000 tonnes.
Despite these efforts, Djibouti produced only 190,000 tonnes of cement in both 2017 and 2018,
falling short of the combined capacity of the two plants, which stands at 460,000 tonnes.

Reducing Imports
While imports have helped meet Djibouti’s demand for building materials, the country has faced
challenges with port delays, leading to material shortages that can cause project delays and deter
foreign investors. However, the launch of port upgrades in 2017 marked a significant step toward
streamlining import procedures. As evidence of progress in this regard, the Port of Djibouti was
ranked the top port in sub-Saharan Africa in the global Container Port Performance Index published
by the World Bank and Standard & Poor’s Global Market Intelligence in 2021.

Data from the Observatory of Economic Complexity reveals that in 2019, Ethiopia accounted for 59%
of Djibouti’s $8.2 million worth of cement imports, making it the largest supplier. The UAE followed
with a 23% share, and Saudi Arabia with 17%. In 2020, the total import value decreased to $4.9
million due to global headwinds and local restrictions. Ethiopia, as one of the top cement producers
in sub-Saharan Africa, possesses a capacity of 17.1 million tonnes as of the first quarter of 2020,
according to the country’s Chemical and Construction Inputs Industry Development Institute.
Ongoing efforts to enhance cross-border connectivity between Djibouti and Ethiopia aim to
strengthen trade and logistics relationships, fostering regional integration.
Major Projects Driving Local Production
The construction of free zones, along with the development of related infrastructure and industrial
centers, is expected to stimulate the local production of building materials in Djibouti. One notable
project is the Djibouti Damerjog Industrial Development Free Trade Zone, valued at $3.8 billion. This
ambitious venture includes the establishment of a 150-MW gas-to-power plant. The development of
this complex will enable Djibouti to meet the region’s hydrocarbon needs efficiently. Once
operational, the energy supplied by the power plant will support manufacturing activities within
Djibouti’s first heavy industrial and petrochemical hub, fostering the production of steel, metal mesh,
PVC pipes, and glass.

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