The Doraleh Multipurpose Port (DMP) is the core of the extensive investment in Djibouti by China Merchants Group (CMG). At the confluence of the Red Sea and the Indian Ocean, the port links to both the Addis Ababa–Djibouti Railway—the largest Chinese-financed infrastructure project in East Africa—and a new international free-trade zone established by a consortium of Chinese investors headed by CMG. CMG’s investment in the DMP is the foundation of its broader strategy to transform Djibouti into an international trade hub.

Impacts

The location of the DMP on the sparsely populated Doraleh littoral to the west of Djibouti City meant the project did not have significant land-based environmental or social impacts. Two other major modern port facilities lie to the east of the DMP, which is on the main Addis Ababa–Djibouti highway. A branch line of the Addis Ababa–Djibouti railway has been constructed to the port.

The maritime environmental impact of the ports is little publicised but will be significant. The DMP (as with the DCT and Horizon terminal) was built by concrete infilling into the sea (much of the old city of Djibouti as well as the old French colonial port’s quays and facilities were built on similarly reclaimed land). Greater use of quays by far larger ships is likely to damage the fragile marine ecosystem of the Gulf of Tadjourah, with Doraleh, Ghoubet, and Tadjourah all attracting more maritime traffic and pollution. Some local fishermen also link the illegal arrival of Chinese trawling fleets off the coast of Djibouti to Chinese investment in the country.

The author’s fieldwork in 2015 found that most of the workforce for the DMP was Chinese and other foreign labour, and as such provided few employment opportunities for Djiboutians. While state finances should benefit from port fees and tax revenues in the long run, the principal Djiboutian beneficiaries to date appear to be those in the presidential entourage, the Port Authority, and associates of the investment vehicles linked to port development—notably, Greater Horn Investment Holdings (GHIH). There has been much discussion about the fiscal impact—in particular, the debt sustainability—of the DMP. While the DMP is expected to be profitable, Djibouti’s overall sovereign debt to China is a significant concern given the state’s weak revenue base. China Eximbank provided a loan of 492 million USD for the 100-kilometre Djiboutian section of the Addis Ababa–Djibouti Railway, alongside the 405 million USD credits for the DMP, taking Djibouti’s debts to the bank to close to 1 billion USD. However, a significant debt rescheduling occurred in August 2019: Djibouti’s finance minister announced in a tweet an extension of the railway-related loan from 10 to 30 years, with interest rates lowered to 2.1% above the London Interbank Offered Rate.