Interview: Abdoulkarim Al Gamil
How can Djiboutian retailers move to expand their regional footprint?
ABDOULKARIM AL GAMIL: Until recently, Djiboutian retailers were predominantly focused on the domestic market. However, rising levels of purchasing parity and the emergence of a middle class have led to increased local consumption. The development of key infrastructure has resulted in easier access and lower transit times for goods moving across the border. Retailers are now beginning to realise the potential revenues offered by the regional market. Currently, 95% of the goods entering the port of Djibouti are destined for Ethiopia, for example, and the two countries have become increasingly interlinked. While the government has facilitated economic exchange, it is now up to the Djiboutian private sector to capitalise on these encouraging developments.
With the vast COMESA internal market stretching from Egypt to South Africa, and with Djibouti’s positioning as a hub for the region, now is the time to expand regional coverage. Sectors that show a lot of potential for regional growth include fish, livestock and construction materials. However, certain challenges still remain; restrictions on financial flows in regional markets, the limited availability of foreign currency and various protectionist measures all make local retailers hesitant to expand.
What can be done to stimulate consumption of locally made products in the retail sector?
GAMIL: With the increase of both foreign enterprises and military activities in the country, it is important to ensure that business people and military personnel coming to Djibouti give back to the country by consuming local products and making use of local services such as restaurants, taxis and boutiques. This means that we should encourage foreigners to source as many as possible goods from the country itself. There are plenty of examples of local products which are widely available and of good quality: cement, stone and marble are just a few examples. But there are ways to encourage this further. By introducing a “made in Djibouti” domestic quality label that adheres to international standards, for example, we can increase the level of trust, recognition and reliability of local products and entice foreign enterprises to use them.
At the same time, the price of these goods should be competitive. Ensuring this means that sufficient resources need to be mobilised to make them available – in whatever volumes necessary. A current factor that hampers industrial production is the cost of electricity, which should be resolved by recent improvements in grid connectivity with Ethiopia, as well as projects in geothermal and solar energy sources.
How can protection of intellectual property rights be strengthened in the country?
GAMIL: The step towards institutionalising the protection of intellectual property rights has been an important one for Djibouti. This is most evident in the formalisation of certain procedures and the requirement for adherence to strict criteria for the usage of copyrights and brand names. Similarly, by having a digital registry of registered companies that are licensed to sell a certain brand, more transparency has been created. This makes international companies more willing to distribute their goods on the Djiboutian markets, with the guarantee that their products will be protected by law.
By strengthening intellectual property rights in Djibouti, we can ensure the adherence to quality standards for brands and investors, and, furthermore, assist in efforts to reduce the currently large informal sector. With the system now firmly in place, it is important to continue efforts to further encourage the formalisation of business and integrate small and medium-sized enterprises into the larger system.
Read More from OBG
