Djibouti Forum – Optimism Runs High for Africa’s Economic Prospects

Global turbulence, much of it self-inflicted, dominated discussions at the second edition of the Djibouti Forum. Nonetheless, business leaders appeared relatively optimistic, and this wakeup call may turn out to be a good omen for the continent.

This year’s Djibouti Forum convened over 150 international guests from 51 countries, including institutional investors overseeing more than $2.6 trillion in cumulative assets.

A common thread throughout the discussions was the need for greater strategic partnerships as well as a call for greater domestic resource mobilisation, allowing pension funds and sovereign wealth funds to take greater risks.

Prime Minister Abdoulkader Kamil Mohamed declared that Djibouti was ready to diversify its economy beyond its well-established ports and logistics sector, which he described as “one of the most efficient and sophisticated in Africa.”

“Renewable energy, the digital economy, tourism, and financial services are all at the heart of this next chapter. We’re looking for access to capital, expertise, and partners who share our long-term vision.”

The Prime Minister reassured investors of Djibouti’s unwavering commitment to maintaining peace and fostering economic and political stability. “The pillar of our strategy in Djibouti is stability. Our currency, pegged to the dollar since 1949, offers investors a degree of stability that is rare in Africa,” he remarked.

Dr. Slim Feriani, CEO of the Fonds Souverain de Djibouti (the country’s sovereign wealth fund), emphasised the fund’s readiness to co-invest alongside international investors in key projects. “The FSD will partner with all of you, taking equity stakes and essentially putting skin in the game. We want to double our assets under management in the next five years, and we know that we cannot do this alone,” he noted.

Feriani highlighted the potential for attractive returns on investment for private players in Djibouti. “Investors here have seen positive returns,” he explained, while acknowledging the need for sustained reforms to further attract private investment. “The private sector is a force for good, which needs positive regulations to create a conducive environment.”

The two-day forum featured over 50 high-level speakers, engaging in discussions on topics such as privatization, public-private partnerships, and priority economic sectors including technology, connectivity, energy, tourism, financial services, and logistics. The event facilitated lively debates among leading economists, policymakers, and investors about the macroeconomic landscape in Djibouti and across Africa.

Dr. Acha Leke, Senior Partner & Chairman of McKinsey & Company, Africa, expressed optimism regarding Africa’s economic prospects despite challenges such as high indebtedness and unequal economic growth across countries. “Despite all its challenges, Africa is home to approximately 345 businesses valued at over $1 billion, with cumulative revenues around $1 trillion,” he stated.

Lionel Zinsou, former Prime Minister of Benin and co-founder of SouthBridge, identified the emergence of philanthropic capital as a crucial opportunity for Africa. “There is a new important partner in blended finance, which is the partnership of the public and private sectors with philanthropy. They are prepared to de-risk investments and to supply grants, which helps lower the costs and interest rates for projects,” he said.

Dr. Samuel Maimbo, former World Bank Vice President, commended the FSD for creating a collaborative platform for institutional investors in Africa. “The idea of having an African sovereign wealth fund working with other SWFs is the start of a good conversation. We must stop this cycle of aid and debt. We know how the story ends. It is time to pivot to hope and prosperity.”

The Djibouti Forum was hosted by the Sovereign Wealth Fund of Djibouti (Fonds Souverain de Djibouti), established in March 2020 and now under the stewardship of CEO Dr. Slim Feriani, a former Tunisian Minister with over 30 years of experience in international capital markets.