Last Thursday, Prime Minister Abdoulkader Kamil Mohamed presided over the launch ceremony of the first Crowdfunding company ‘Inclufin’ by the Djibouti Sovereign Wealth Fund (FSD) at Djibouti Palace Kempinski.

Several government members attended the ceremony, including the Minister Delegate for Digital Economy and Innovation, Mariam Hamadou Ali, the Chief Executive Officer of the Djibouti Sovereign Wealth Fund (FSD), Dr. Slim Feriani, the President of the Djibouti Ports and Free Zones Authority (APZFD), Aboubaker Omar Hadi, the Secretary-General of the Presidency, Mohamed Abdillahi Waïs, the Governor of the Central Bank, Ahmed Osman Ali, the President of the Djibouti Chamber of Commerce, Youssouf Moussa Dawaleh, parliamentarians, representatives from diplomatic and consular missions, as well as Technical and Financial partners from Djibouti.

This marks the establishment of the first crowdfunding platform in Djibouti, aiming to connect project owners, young entrepreneurs, startups, innovators, and potential investors. This represents an alternative and participative financial approach.
In the era of Fintech, digital revolution has profoundly altered financing mechanisms. This is why the Djiboutian State, through the Djibouti Sovereign Wealth Fund (FSD), is creating a flagship for the economy, a facilitating service, and a source of hope for the youth of Djibouti driven by the idea of establishing their own brand – ‘Inclufin.’
The name is a fusion of ‘inclusion’ and ‘finance.’ In essence, Inclufin is a crucial instrument for social and financial inclusion, promoting the integration of the informal economy.

This initiative involves an innovative digital financing mechanism that allows the solicitation of financial resources from individuals and institutions complementary to those mainly offered by banks. Inclufin also benefits from the support of the Djiboutian ecosystem, notably the Djibouti Sovereign Wealth Fund. It aims to be a launching pad for high-potential projects in Djibouti by facilitating a structured and secure connection between entrepreneurs and investors.
During his speech, Prime Minister Abdoulkader Kamil Mohamed depicted crowdfunding as complementary to the banking system, offering our young entrepreneurs the opportunity to directly address a broad audience, whether locals or members of the Djiboutian diaspora. As he mentioned, some will be able to seek financial support to initiate a project or a specific business in the form of equity, while others will do so through loans. Additionally, the Prime Minister highlighted that these platforms also facilitate capital raising for community and humanitarian projects.

In a speech delivered on this occasion, Minister Delegate for Digital Economy and Innovation, Mariam Hamadou Ali, indicated that the ongoing legislative framework aims to ease and stimulate Djibouti’s entrepreneurial ecosystem. She emphasized that it would establish a robust structure for the growth and sustainability of startups by addressing challenges such as regulation, tax incentives, and access to capital.
According to her, this synergy between the Startup Act and crowdfunding would lay down regulatory and incentive foundations so that startups, combined with crowdfunding, offer an accessible and democratic financing source, ultimately providing Djibouti with a powerful synergy. On his part, Dr. Slim Feriani, the CEO of the Djibouti Sovereign Wealth Fund, highlighted that ‘with the FSD’s first project, we mark the beginning of a new chapter in the life of this young sovereign fund, signifying the take-off phase of this institution.’ He stated that the FSD is the promoter and, for the time being, the sole shareholder
of Inclufin. Ultimately, the credit goes to the state of Djibouti for creating a new tool for financing young entrepreneurs, startups, and SMEs that are meant to become the spearhead of the Djiboutian economy in the long run. He also added that this initiative will support the government initiative ‘Djibouti ICI’ (Inclusion-Connectivity-Institutions) and provide young entrepreneurs with access to funding.
In Djibouti, we firmly believe that crowdfunding is a powerful tool to materialize the aspirations defined in the ‘Vision Djibouti 2035’ of the President of the Republic, emphasized the DG of the Djibouti Sovereign Wealth Fund.
‘We remain committed to working together to ensure a better future for the younger generations’ – Abdoulkader Kamil Mohamed, Prime Minister.

Crowdfunding, as a funding method mobilizing a broad audience through online platforms, and currently represents a promising opportunity for Djibouti’s SMEs and
startups. This funding model, which preceded the era of new technologies, has experienced significant growth with the advent of the digital age, particularly following the global banking crisis of 2008/2009.
In the era of Fintech, the digital revolution has fundamentally transformed financing mechanisms, allowing a direct connection between individuals seeking funding and those with financial resources, all through dedicated platforms.
Since 2020, crowdfunding has gained further momentum; it has become one of the favored approaches for individuals to raise funds for causes, projects, or events. For instance, on a global scale during that same year of 2020, the total amount collected via crowdfunding reached an impressive sum of 34 billion dollars – I repeat, 34 billion dollars! Accumulating to several hundred billion dollars over the last decade. As
highlighted by the Director-General of the FSD during his speech, this sector is beginning to develop in Africa, and Djibouti now stands among the few African countries benefiting from crowdfunding.

Crowdfunding is complementary to the banking system, offering our young entrepreneurs the opportunity to directly address a broad public, whether local residents or members of the Djiboutian diaspora. Some will be able to seek financial support to initiate a project or a specific business in the form of equity, while others
will do so through loans. Know that these platforms also facilitate capital raising for community and humanitarian projects.
I am convinced that crowdfunding will have a positive impact on Sustainable Development and Youth. It goes beyond fundraising. It represents a way to bring forth bold ideas, promote entrepreneurship, and shape a promising future for our nation. It helps to preserve and showcase the talents of our youth, who are fully immersed in the digital age, connected and ready to take advantage of technology’s opportunities. This aspect is of paramount importance to encourage entrepreneurship and, by extension, promote the sustainable development of our nation.
Today, I want to emphasize the impact that this IncluFin platform will have on our society and the benefits that our population will derive from it. It is clear that the main advantage of these online link networks between finance enthusiasts and entrepreneurs is access to financing.
We remain committed to working together to ensure a better future for the younger generations. This day marks the beginning of a significant change in our approach to economic development, and our mindsets must adapt to the digitalization of financing circuits.
“Crowdfunding represents a revolution that allows everyone to participate in value creation” – Dr. Slim Feriani, CEo of the Djibouti Sovereign Wealth Fund (FSD)

With the launch of Djibouti’s first Crowdfunding platform (Inclu-Fin, Inclu for Inclusion and Fin for Financial, hence IncluFin for Financial Inclusion ), the first project of the FSD, we are marking the beginning of a new chapter in the life of this young sovereign fund. The FSD is the initiator and, for the moment, the sole shareholder of Inclufin, and since the FSD is 100% owned by the state, the credit ultimately goes to the state of Djibouti for creating a new tool for financing young entrepreneurs, startups, and SMEs that are meant to become the spearhead of the Djiboutian economy.
For the past 18 months, we have been actively working with numerous experts and partners in the field to make this Crowdfunding platform, led by Effectus, our international crowdfunding expert, a reality and functional.
Crowdfunding, or participatory financing, is much more than a simple fundraising method. It embodies a community, solidarity, an opportunity to see dreams become reality, a way to support ideas and projects that are dear to us. It represents a revolution that democratizes investment and its financing, allowing everyone the
opportunity to participate in creating value.

The establishment of Inclufin represents a significant advancement in our quest for innovation, entrepreneurship, and development for Djibouti. Inclufin is the bridge that connects dreams to reality, where innovative ideas find the necessary support to grow and thrive.
We believe in the power of collaboration, in the diversity of ideas, and in the magic that emanates from solidarity and the unity of communities around the projects that drive them. Unity is strength.

“This initiative reflects our commitment to innovation, entrepreneurship, and sustainable economic growth in our country” – Mariam Hamadou Ali, Minister Delegate for Digital Economy and Innovation.

Today marks a historic milestone for Djibouti with the launch of our first participatory financing platform. This initiative reflects our commitment to innovation, entrepreneurship, and sustainable economic growth in our country.
Crowdfunding, or participatory financing, is not limited to just a platform; it is a revolution that allows each of us to actively contribute to entrepreneurial development. It encourages citizen participation, giving everyone the opportunity to support promising projects, whether they come from young innovators or seasoned investors.
Crowdfunding will cover a wide range of needs, from innovative entrepreneurship to citizen projects, without geographical limits.
In this context, the Startup Act plays a crucial role. This legislative framework, currently under development, aims to facilitate and stimulate Djibouti’s entrepreneurial ecosystem. It establishes a solid structure for the growth and sustainability of startups by addressing challenges such as regulation, tax incentives, and access to capital.
The link between the Startup Act and crowdfunding is intrinsic. While the Startup Act lays the regulatory and incentive foundations for startups, crowdfunding complements this by offering an accessible and democratic source of funding.
By combining the Startup Act and crowdfunding, Djibouti is equipped with a powerful synergy. The Startup Act will facilitate the creation and development of nascent companies, while crowdfunding provides the means to realize their visions. Together, they foster an environment where digital economy and innovation are not only encouraged but also financed and supported at every stage.

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Le Premier ministre préside la cérémonie de lancement officiel de la première société de Crowdfunding à Djibouti | LA NATION

The Spanish capital, Madrid, hosted the 15th General Assembly of the International Forum of Sovereign Wealth Funds (IFSWF) from September 24th to 27th, 2023, with COFIDES, the Spanish sovereign investor, as the host.  

The annual IFSWF meeting brings together members and financial leaders from around the world to discuss key global topics impacting investors. This 15th edition saw the participation of 45 Sovereign Wealth Funds, including the Sovereign Wealth Fund of Djibouti (FSD), which joined IFSWF in May 2022. The forum gathers sovereign funds that adopt the Santiago Principles, aiming to improve their governance through best practices.  

The event also attracted multilateral institutions, IFSWF partners, and representatives from the Spanish government, bringing together over 200 participants. Globally, the sovereign wealth fund sector manages approximately $11 trillion, equivalent to over 10% of the global GDP. 

COFIDES, or the Compañía Española de Financiación del Desarrollo, is a state-owned commercial entity. It provides medium and long-term financing for viable private investment projects that, based on profitability criteria, contribute to the development of host countries and the internationalization of the Spanish economy and businesses. 

The company operates in various sectors and regions, including finance, infrastructure, energy, manufacturing, services, and agri-food. The Spanish Fund is active in many countries, not only in sub-Saharan Africa but also in Europe, Asia, and Latin America. 

COFIDES had the privilege of hosting this significant gathering of financial leaders from around the world for the first time. Participants discussed pressing issues, including climate disruptions, the global warming, and their devastating effects on societies. Given the scale of the phenomenon, investments in green energy have become imperative. Participants also delved into another critical topic related to technological advancements and the transformations imposed by the digital age, including concerns about Artificial Intelligence, cybercrime, and the rapid shift towards an all-digital world. 

Managing inflation and its impact on investment returns were also important concerns requiring strategic consideration. Lastly, the improvement of corporate governance once again emphasized the absolute necessity of working transparently while adhering to professional ethics to ensure the sustainability of Sovereign Wealth Funds. 

José Luis Curbelo, CEO of COFIDES, welcomed the opportunity to host this annual meeting. An annual meeting that showcased, in his words, “Our company (COFIDES) is becoming increasingly important on the international stage, positioning itself as a reference in public-private investment in Spain.” He added that his country, Spain, is firmly committed to green and digital transitions and that financing is necessary to make them possible. This requires foreign investment, including sovereign wealth funds, which are strategic due to their significant investment capacity and long-term vision. He expressed hope that this meeting would strengthen collaboration and cooperation with IFSWF members, benefiting the modernization of the production system and the competitiveness of the Spanish economy. 

As for Mr. Obaid Amrane, President of the IFSWF, he stated that, in essence, “Investments in green energy and digital technologies will both assist young generations in employment and skill acquisition and also grow the capital of Sovereign Wealth Funds in the long term.” He thanked COFIDES for graciously hosting the event, saying, “We are confident that this year’s discussions will enhance cooperation among IFSWF members and their partners, reinforce their commitment to the energy transition, and help promote a better understanding of the changing roles that sovereign wealth funds can play both at home and abroad.”   

In 2023, IFSWF saw an increase in its membership with the addition of the Investment Corporation of Dubai, Greece’s Growthfund, and the Brazilian Sovereign Funds Forum (FFSB), an association comprising sovereign funds from various cities and states in Brazil.  

Dr. Slim Feriani, CEO of the Sovereign Wealth Fund of Djibouti (FSD), highlighted the fruitful and enriching debates during the meeting, aimed at diversifying investment and intensifying collaboration among various financial institutions. He presented figures showcasing what the Spanish fund has achieved over the past thirty-five years. He noted that “since 1988, COFIDES has supported over 1,000 projects in nearly 90 countries, including 10 African countries, mobilizing significant funds exceeding 3.6 billion euros. This experience and expertise can play a key role in promoting economic and social development in Africa through targeted and sustainable investments.” He also emphasized to this high-profile audience “the importance of partnerships and co-investments among IFSWF members, who manage trillions of dollars, to reduce the gap between developed and developing countries, and FSD will be delighted to be the strategic partner of choice in Djibouti.”  

 FSD.

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On Monday 31 July, the President of the Republic of Djibouti, H.E. Mr ISMAEL OMAR GUELLEH, attended the arrival of the largest floating modular dock in the region at Quai 2 in the Port of Djibouti, from the Djibouti Shiprepair Yard. The ceremony was attended by the Minister of Infrastructure and Equipment, H.E. Mr Hassan Houmed Ibrahim, and the Chairman of DPFZA/GHIH, Mr Aboubaker Omar Hadi. The arrival of the dock, the ambition of which dates back to 1958, marks a crucial stage in the implementation of the country’s “Vision 2035”. 

Ultimately, the ship repair yard will generate more than 3,000 direct and indirect jobs, helping to develop Djibouti’s Blue Economy. It will also help preserve the marine environment and actively combat climate change. 

DAMEN SHIPYARDS, a world leader in shipbuilding and ship repair, was awarded the contract to build the 217-metre-long, 43.5-metre-wide vessel. The unit was financed by Investment International and guaranteed by Atradius. 

“We have reached an important milestone today with the arrival of our new ship repair vessel in the Port of Djibouti. This vessel, a veritable “aquatic garage”, is equipped to handle all types of breakdowns and malfunctions on private, merchant and military vessels. With an exceptional capacity of 50,000 tonnes, it far surpasses the provisions of its nearest counterpart in the region. It is further proof of our commitment to confirming Djibouti’s status as a leader in sea-related services and activities. Thanks to meticulous planning, the vessel is ready for immediate operation, supported by a team of 25 highly trained engineers. This is a strategic asset that our country has been aspiring to for decades, and we are very proud to see this day arrive. I would like to thank everyone involved in making this project a reality. Together, we are building a stronger, more prosperous future for Djibouti,” said H.E. ISMAEL OMAR GUELLEH, President of the Republic of Djibouti. 

Its construction began after the President of the Republic, HE ISMAEL OMAR GUELLEH, launched work on the Djibouti Shiprepair Yard in November 2020. It required the mobilisation of around 1 million man-hours and 12,500 tons of steel. This floating dock, with a lifting capacity of 20,100 tonnes, will be responsible for carrying out curative and preventive repairs on ships undergoing refit. 

This new modern technology unit will take advantage of Djibouti’s prime geographical location, at the crossroads of several continents and strategic shipping lanes for world trade, with more than 40,000 ships passing through the Bab El Mandeb Strait off Djibouti every year. 

Following the example of recent maritime and port projects undertaken in Djibouti, this ship repair yard and floating dock, wholly owned by Great Horn Investments Holding, are fully in line with the strategy of continuous reinforcement working to make Djibouti a world-class hub through the synergy of maritime and port services offered to professionals. These new state-of-the-art infrastructures will change the face of the country in terms of attractiveness, reputation and quality of services provided in the region. 

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The President of the Republic of Djibouti, H.E. Mr ISMAEL OMAR GUELLEH, inaugurates the largest floating modular dock in the region – Maritimafrica

The FSD received a high-level Qatari delegation on Tuesday, June 20, with the aim to strengthening bilateral cooperation. This visit comes shortly after the participation of the Head of State, His Excellency Mr. Ismail Omar Guelleh, to the 5th United Nations Conference on the Least Developed Countries (LDCs) held in the Qatari capital, Doha. The group of LDCs includes 33 African countries, 12 countries from Asia and the Pacific, as well as Haiti.

The delegation was received at the FSD headquarters by the CEO of the Institution, Dr. Slim Feriani, and consisted of the Qatari Ambassador to Djibouti, His Excellency Dr. Rachid Bin Shafeea AL-Mari, the Ambassador of the Republic of Djibouti to Qatar, His Excellency Mr. Dayib Doubad Robleh, the Secretary-General of the Board of Directors of the Qatar Chamber, Mr. Mohammed Bin Ahmed M.AL Obaidly, the Director of Investor Relations and Support of the Qatar Free Zone Authority, Mr. Abdulla Hamad Al-Binali, as well as the representative of the Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, Mr. Abdulla Bader Al Darwish.

During this fruitful meeting, Dr. Slim Feriani first presented the objectives and achievements of the Fonds Souverain de Djibouti (FSD), highlighting the economic ambitions of the Djiboutian state within the framework of the Vision 2035 of His Excellency the President of the Republic, Mr. Ismail Omar Guelleh. He emphasized the importance of collaboration with entities representing Qatar to strengthen bilateral relations and mutual economic development. The Fonds Souverain de Djibouti, as the financial and investment arm of Djibouti, is determined to support sustainable economic growth and the development of Djibouti. The visit of the Qatari delegation was an excellent opportunity to discuss new investment opportunities, business partnerships, and exchange of expertise.

During the meeting, both parties expressed their shared interests in exploring strategic projects and initiatives that would promote economic growth and strengthen relations between the two nations. The discussions focused in particular on collaboration between the sovereign funds of both countries, highlighting the role of the private sector in this process. The Fonds Souverain de Djibouti (FSD) and the Qatar Investment Authority (QIA) explored possibilities for strategic partnerships and joint investments during these exchanges.

In this regard, the Qatar Chamber will also provide support to facilitate trade exchanges and encourage partnerships between businesses in Djibouti and Qatar. Both parties expressed their willingness to strengthen economic and trade ties by encouraging mutual investments and promoting large-scale projects in various sectors. The meeting also addressed opportunities for collaboration with the Qatar Free Zone Authority, an institution that plays a key role in creating an investment-friendly environment, especially in the management of free zones. Representatives of both funds expressed their shared interests in exploring partnerships with the Qatar Free Zone Authority and establishing beneficial synergies for businesses and investors from both countries.

The CEO of the Fonds Souverain de Djibouti welcomes this visit by the Qatari delegation and remains committed to promote an investment-friendly environment by facilitating partnerships and collaborations between economic actors in Djibouti and Qatar.

The Fonds Souverain de Djibouti and the Qatari delegation have agreed to continue discussions and deepen their cooperation with the aim to realize mutually beneficial projects. This visit marks a new chapter in the relationship between the Fonds Souverain de Djibouti and the Qatar Investment Authority and paves the way for promising opportunities for economic development and mutual growth between the two countries.

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FSD : FRUCTUEUSE VISITE DE TRAVAIL D’UNE DÉLÉGATION QATARIE AU FONDS SOUVERAIN DE DJIBOUT | LA NATION

FSD and Kasada Capital Management sign a Memorandum of Understanding to invest in the tourism sector in Djibouti.

On March 2nd, 2023, the Fonds Souverain de Djibouti “FSD”, represented by its CEO Dr. Slim Feriani, and Kasada Capital Management, represented by its managing partners, Mr. Olivier Granet and Mr. David Damiba, signed a Memorandum of Understanding (MOU). Mr. Granet was previously CEO of the Accor Group for the Africa and Middle East region. Mr. Damiba has 25 years of experience in finance and fund management.

The signing of the MOU is the culmination of several months of work that began with Kasada’s first visit to Djibouti at the end of May 2022, following an invitation by the young FSD (operational for two years). Based in South Africa, Kasada is an investment company dedicated to the hospitality industry in sub-Saharan Africa.
Kasada’s investment strategy covers several segments of the hospitality industry, from mid-range to luxury, and targets both hotel projects to be built (“greenfield”) and the acquisition of existing hotels (“brownfield”). Among the many Accor brands that Kasada markets in Africa are Pullman, Ibis, Novotel, Mercure, and Mövenpick.

Over the past four years (including the difficult years of Covid), the Kasada team has built a portfolio of hotel assets that bring together 3,211 rooms served by over 2,000 employees in 19 hotels located in 8 African countries across the continent, for investments of approximately $500 million (in equity and debt). Kasada’s expansion strategy focuses on key cities in sub-Saharan Africa.

An entry by Kasada into the Djiboutian hotel market would strengthen its footprint in this region of the Horn of Africa, which offers strong growth opportunities. Indeed, the share of tourism in Djibouti’s GDP is about 3%, which is far from the average of 8% observed on the African continent before the pandemic, going up to 40% of GDP for countries like Seychelles.

This MOU formalizes the co-investment and partnership project bringing together Kasada’s capital (in the form of FDI/Foreign Direct Investment) and FSD’s to build and renovate hotel infrastructure throughout the country. These investments will create economic growth as well as a large number of jobs, in addition to the indirect impact on sectors such as crafts.

This program complements ongoing projects led by other developers who share the vision of a country that develops a tourism range that can attract a Djiboutian clientele as well as customers from the East African, Middle Eastern, and worldwide regions. This is a “win-win” partnership that allows Kasada to add Djibouti to its range of hotel products offered to its broad pan-African clientele, from which Djibouti now benefits.

The FSD, under the supervision of the Presidency of the Republic, has the role of attracting leading international companies like Kasada and therefore FDI/Foreign Direct Investment in strategic sectors for the diversification of Djibouti’s economy. After attracting them, the role of the FSD is to co-invest with them in the framework of joint ventures or economic alliances, to reassure them by having aligned interests with them and by creating “success stories” of PPP (Public-Private Partnership) and having a multiplier effect of its financial resources (by attracting FDI).

This is Kasada’s first partnership with an African sovereign fund. It will become a symbol of sovereign capital (FSD) used to complement foreign direct investment (FDI)/private capital (Kasada) with pan-African sectoral expertise. It will be a pioneering and reassuring example of PPP in Africa.

Tourism, as a sector, is at the heart of the Vision 2035 led by His Excellency the President of the Republic, Mr. Ismail Omar Guelleh, working to improve the employability of Djiboutians through the promotion of Djibouti’s unique cultural and natural heritage. The objectives of Vision 2035 include, among others, the creation of more than 200,000 jobs and the attraction of 500,000 tourists.
The tourism sector is the largest employer in the world with around 10% of the global workforce, and is also one of the main economic drivers for several countries.

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FSD / KASADA : INVESTISSEMENTS DANS LE SECTEUR DU TOURISME | LA NATION

The Director General of the Fonds Souverain de Djibouti (FSD), Dr. Slim Feriani made a working visit to Marseille, from December 11th to 13th 2022.

In a decade, the city of Marseille has accomplished an exceptional transformation of its economy by moving to a more digital environment. Dr. Feriani joined Her Excellency the Minister of Digital Economy and Innovation (MENI) of Djibouti, Mrs. Mariam Hamadou Ali, as well as a large delegation including Mr. Ibrahim Omar Abdallah (Director of Digital Transformation), Mr. Mohamoud Robleh Dabar (National Coordinator of Djibouti-Southern France Cooperation), Mr. Mhamed Dalla (Advisor to the Minister), Ms. Hamda Houssein Farah (Director of Business Development at GHIH/Great Horn Investment Holdings), and Mr. Warsama Guirreh (General Manager of DPCS/Djibouti Port Community System, part of the GHIH Group).

The program featured several site visits, including Interxion’s data center campuses (now part of the world’s leading data center group Digital Realty); SETEC International’s headquarters (one of France’s top 5 engineering and consulting groups in the infrastructure sectors, etc.); the Marseille Fos “smart port”; and ZEBOX’s incubator and gas pedal (part of the CMA CGM Group). Thanks to the 16 submarine cables that passes through Marseille (rising to 25 cables by 2030) and global giants in data centers such as Interxion, this city has become the world’s 7th largest digital hub in a decade (it was ranked 44th worldwide just 10 years ago) and is well on its way to becoming a “smart city”. With 40,000 jobs, 7,000 companies, and a turnover of 8 billion Euros, the digital sector is already as important as tourism and the port industry for the local economy.

Today, Africa represents 13% of the world’s Internet users, but only 1.4% of the world’s data center hosting capacity. There are currently only about 100 data centers in Africa, when there should be 700 to 800 data centers. There is already a lot of ground to make up, especially since Africa will account for about 25% of the world’s Internet users within 20 years, requiring 700-800 more new data centers, for a total of 1,400-1,600 units of such digital infrastructure.

With 9 submarine cables currently passing through Djibouti (going towards 14 cables in a few years), an exceptional geostrategic location, and stability and political will, Djibouti has all assets to become, amongst others, one of the main African and global digital hubs.

The establishment of the Sovereign Wealth Fund (FSD) in 2020 and a new ministry (MERN) dedicated to the digital economy and innovation in 2021, by His Excellency the President of the Republic of Djibouti are strong messages of his desire to diversify Djibouti’s economy, much more towards the digital and new trades, as part of his “Vision 2035”.

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FSD/ VISITE DE TRAVAIL À MARSEILLE, UNE INSPIRATION : DE SUCCÈS DANS LA TRANSFORMATION VERS L’ÉCONOMIE NUMÉRIQUE | LA NATION

 

 

On Sunday, November 27th, 2022, the Fonds Souverain de Djibouti welcomed the DICO/DAMAC Conglomerate founder: Mr. Hussain SAJWANI, the 6th wealthiest man in the Middle East.

The Fonds Souverain de Djibouti (FSD) welcomed this Sunday, November 27, 2022, a distinguished guest: Mr. Hussain SAJWANI, who is one of the wealthiest personalities in the Arab world whose personal wealth is estimated at $2.7 billion, ranking him first in the United Arab Emirates and sixth in the Middle East according to the latest Forbes 2022 ranking.

He is the head of the DICO/DAMAC conglomerate, which includes several companies active in many sectors, including real estate (through the giant DAMAC Group), finance, tourism, digital, retail and industry.

In real estate, DAMAC Properties is one of the international leaders. Since its inception in 1982, DAMAC Properties has delivered more than 42,000 residential units and has more than 28,000 units in various stages of completion, as well as almost 2,000 hotel rooms.

DAMAC Properties has completed several prestigious projects around the world – Dubai, Jeddah, Riyadh, Toronto, the Maldives, and the iconic Nine Elms Tower in London. DAMAC Properties also has operations in Qatar, Jordan, Lebanon, and the United States.

In the digital sector, the conglomerate, through its company EDGNEX, is building data centers ranging from 1 to 40 MW in the least served countries. Its flagship projects are the construction of a Data Center in Ryad with a minimum capacity of 25MW and in Dublin with a capacity of 70MW.

Mr. Hussain SAJWANI arrived in Djibouti on November 27th, 2022, accompanied by three senior executives of his group: Ms. Anastasia KOZYRAK, Senior Vice President – Investments and Acquisitions; Mr. Milan RADIA, Senior Vice President – of Africa; and Mr. Aqil JAFFER ALI, Senior Vice President.

He was first received by the President of the Republic, His Excellency Ismail OMAR GUELLEH.

The CEO of the Fonds Souverain de Djibouti, Dr. Slim Feriani, also held several meetings with members of the government: H.E. Mrs. Mariam HAMADOU ALI, Minister of MENI, and H.E. Mrs. Amina ABDI ADEN, Minister of City and Urban Planning.

He was invited to meet with the CEO of Djibouti Télécom, a public limited company and a subsidiary 100% owned by the FSD according to the law creating the FSD: Mr. Mohamed Assoweh BOUH. The DAMAC team also met with a representative of the Djibouti real estate private sector.

Discussions at the FSD headquarters focused on strengthening cooperation between the two institutions and the ideal conditions that would make it possible for the FSD’s potential partner to invest in Djibouti.

The young Sovereign Wealth Fund of Djibouti, created barely 2 years ago, can be inspired by its UAE Sovereign Wealth Fund homologs, who have succeeded in twenty years to transform the economy of their country and constitute a level of savings higher than their GDP, thus becoming a strategic financial resource for future generations by investing in their country but also and especially beyond their border.

This meeting aims to identify the strategic sectors in which the giant DICO/DAMAC could operate.

After the partnership with the UAE company AMEA Power for the project of a solar power plant in “Grand Bara”, the visit of this other UAE heavyweight DICO/DAMAC is welcomed,” said Dr. Slim FERIANI.

“The visit of Mr. Hussain SAJWANI to Djibouti sends a clear and positive message to the international business community: it demonstrates Djibouti’s commitment to attracting investors, especially those with equity. As a financial partner of the private sector, the FSD is the link between local Djiboutian actors and international partners in many sectors, whether in the hotel industry, real estate, industry or digital infrastructure in which the DICO/DAMAC Group is a leader,” concluded, Dr. Slim FERIANI.

After having left its mark on many countries around the world, the Group aims to explore new investment opportunities on the African continent considering Djibouti as an ideal gateway given its political and monetary stability, the free flow of capital, and its strategic location.

In this regard, the young FSD, created barely 2 years ago and whose current CEO and his team took office a year ago, is already playing its role to make Djibouti shine on the scene of international finance by attracting SAJWANI: this very influential businessman with an important strike force and an exceptional address book. By associating with an entrepreneur of this stature and all the other international partners received during the year of 2022, the FSD engages the credibility of Djibouti and its willingness to implement the Law creating the FSD carried by his Excellency the President Mr. Ismail OMAR GUELLEH as part of the execution of his Vision 2035.

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M.HUSSAIN SAJWANI, LA SIXIÈME FORTUNE DU MOYEN-ORIENT, EN VISITE À DJIBOUTI | LA NATION

After the launch of the crowdfunding platform on October 10, 2022, the Chief Executive Officer of the Fonds Souverain de Djibouti “FSD” took his pen to patiently describe the world of finance.

The international financial system generally comprises three main segments: (1) the “sell side” (i.e., the sale of banking/financial products and services); (2) the “DFIs” (Development Finance Institutions), which are banks specialized in development finance; and (3) the “buy-side” (i.e., the purchase of or investment in financial instruments which, in general, are sold/proposed to them by the investment banks)

THE ROLE OF COMMERCIAL BANKS OR SELL SIDE

The “sell side” is mainly composed of banks (commercial and investment). The DFIs are the development institutions and banks such as the World Bank Group (which includes the IFC/International Finance Corporation…), the African Development Bank, the European Bank for Reconstruction and Development, and the Asian Development Bank. The “buy side” is the investment institutions.

The “sell side” is the sector where the main objective of banking institutions is to sell financial products and services.

The business of commercial banks is mainly to attract deposits from customers (individuals/retail or institutions/corporate) on the one hand and to grant short, medium, and long-term credits to the same or other customers on the other hand.

INVESTMENT BANKS

The business of investment banking is different from that of commercial banks and development banks. The business lines and activities of investment banks include: (i) financial advisory; (ii) mergers and acquisitions; (iii) capital raising; (iv) trading; (v) publishing research at the “macro” (related to stock markets, bond markets, the economy…) and “micro” (companies, sectors …) levels …etc. However, and especially since the 1980s, many large international banks have become “universal banks” that combine commercial and investment banking activities (such as Citigroup, JP Morgan Chase, HSBC, BNP Paribas, Deutsche Bank, Credit Suisse…).

DEVELOPMENT BANKS

Development banks generally raise capital from their shareholders/members (states) and the financial markets. They then allocate this capital to developing and/or emerging economies in development projects at preferential terms, rates, and margins compared to the terms and conditions of the international capital markets.

INVESTMENT INSTITUTIONS OR THE BUY SIDE

The buy-side sector includes investment institutions in a wide range of segments, such as :

– Institutions managing investment funds or portfolios, known as “asset management firms” or “investment firms,” are private. These firms manage, among other things, “long-only funds” and/or “hedge funds” (often with short-term investment horizons) that specialize in and invest in stock markets and/or bond markets and/or foreign exchange markets and/or commodity markets, and/or derivatives markets, etc.

The 20 largest international institutions in this buy-side segment, BlackRock, Vanguard, Fidelity…, manage about $70 trillion in assets, equivalent to about 75% of the world economy. There are thousands of institutions internationally in this segment, whose total assets under management far exceed the size of the world economy (about $94 trillion in 2021) and the world market capitalization (about $105 trillion);

– Private equity and/or venture capital funds, such as Blackstone, KKR, etc., which manage more than $4 trillion worldwide;

– Pension funds or retirement funds that manage more than 50,000 billion dollars;

– Sovereign Wealth Funds, which manage approximately $10.5 trillion.

THE FSD, A BUY-SIDE INSTITUTION, AND ITS DRIVING ROLE IN THE DEVELOPMENT PROCESS

The Fonds Souverain de Djibouti “FSD” is, therefore, part of the world of sovereign wealth funds (in the “buy side”), which manage about 10.5 trillion dollars internationally, representing the equivalent of about 11% of the world economy.

Before the creation of the FSD about two (2) years ago, the business of managing sovereign wealth funds and multi-sector portfolios with multiple asset classes and geographies did not exist in Djibouti. Due, among other things, to the fact that there are still no financial markets (apart from the 13 commercial banks in the country whose business, as discussed above, is different from the buy side).

In order to accelerate the development and success of the FSD and the training of Djiboutian skills in these new areas in Djibouti, the Djibouti authorities have chosen to avoid making it “a laboratory of experience” for 10-20 years by immediately attracting international expertise in these areas; as most other sovereign wealth funds have done in the past to maximize their chances of success (such as those of all the Gulf countries, etc).

The FSD, therefore, recruited, via international institutions specialized in high-level recruitment, a Chief Executive Officer (Dr. Slim Feriani) and a Chief Investment Officer (Mr. Jean-André Gbarssin).

Based in London (the world’s most important international financial center), these two hires immediately bring some 50 years of relevant experience. They allowed FSD to be immediately at the same level of credibility, skills, and know-how as all international stakeholders. Some of these have quickly become partners of the FSD this year, such as Meridiam (a giant in infrastructure on an international scale), AMEA Power (a significant player in renewable energy in Africa), Kasada Capital Management (the most important investment fund in the tourism sector in Africa), …etc.

STRUCTURE AND ORGANIZATION OF THE FSD

Like any investment institution, the organization of a SWF is based on a single engine: the investment department, which is managed by a Chief Investment Officer (CIO). All other departments are considered “support services” to the investment department.

In commercial investment/asset management firms, the front office is represented by the investment department and the marketing, communication, and client service department. Other departments are considered the “back office” (administration, human resources, accounting/finance, risk, compliance, IT, …etc.).

The investment department and the role of the Chief Investment Officer did not exist in Djibouti before the creation of the FSD. The only financial institutions here are commercial banks where operations, commercial, and credit departments mainly represent the “front office.”

As explained above, the investment and fund management business (the “buy side”) is totally different from the commercial banking business (the “sell side”).

• For example, the CFO’s role is as important as the sales/operations manager’s role in Djibouti’s commercial banks, while:
• the finance department in a SWF simply provides a support service (to the “investment engine/department”) and focuses on the institution’s accounting;
• and there is no commercial/operations or credit department in a SWF.

DEVELOPING EXPERIENCED ANALYSTS

The experience required in a SWF, at the level of its main engine (investment department), is that of seasoned financial analysts. It usually requires, first of all, studies in high-level business and management schools.

It requires specialization in finance at the Bachelor’s level and ideally at the MBA (Master of Business Administration) level or a Master’s degree specialized in finance or a “Chartered Financial Analyst” degree, which takes a few more years (after the Bachelor’s degree).

Courses needed for a financial analyst’s early career path include accounting, micro, and macroeconomics; international economics; financial mathematics; corporate finance; financial analysis; financial markets; investment and portfolio management; financial engineering; international finance, …etc.

Education and degrees are important and give you the mental gymnastics and tools you need later in the working world. But the most important thing to get into an SWF (a buy-side institution) is the experience and skills of a financial analyst. These are usually acquired in investment banks for a junior financial analyst role but preferably in the buy side (investment and fund management institutions) for a senior financial analyst role.

Buy-side solid experience, preferably in private equity and the international bond market, is essential to join an institution like the Djibouti Sovereign Fund.

Our roles as Chief Executive Officer and CIO at FSD include transferring our know-how, training, and coaching Djiboutian skills in financial analysts, portfolio managers, and management of investment institutions. We also attach great importance to the orientation of young graduates towards the finance sector.

SUPPORTING THE “VISION 2035” OF THE HEAD OF STATE

Two of the FSD’s main objectives over the next 3 to 5 years are:

(1) to train and develop the human capital of high-level Djiboutian skills that will ensure a solid foundation and the sustainability of the FSD;

(2) build a multi-generational (multi-asset class and multi-sector) investment portfolio that diversifies the Djiboutian economy, creates jobs and contributes to the realization of the “Vision 2035” of His Excellency the President of the Republic, Ismaël Omar Guelleh. With an ultimate goal of inclusive and sustainable economic and social development and prosperity.

Dr. Slim Feriani

Chief Executive Officer

Fonds Souverain de Djibouti

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https://www.lanation.dj/fsd-le-monde-des-fonds-souverains/

The Chief Executive Officer of the Fonds Souverain de Djibouti, Dr. Slim FERIANI, took part in a high-level meeting of African sovereign wealth funds on Thursday 11 and Friday 12 August 2022 at the Wilson Center in Washington D.C.

The American investment fund “Brown Capital Management,” which exists for 39 years and manages $12 billion, invited twelve representatives of African Sovereign Wealth Funds in Washington D.C – including Dr. Slim FERIANI (Chief Executive Officer of Fonds Souverain de Djibouti).

They discussed the current situation of the African economy after the post-Covid-19 crisis, its consequences, and the jolts of the conflict in Ukraine causing the increase of food prices and energy bills.

The leaders of African Sovereign Wealth Funds created their grouping within ASIF (African Sovereign Investors Forum.)

Later, they actively discussed, for two days, the better integration of African financial institutions into the international financial system on issues of governance, economic growth, and sustainable development.

The renowned foundation, “Wilson Center,” dedicated to incubating new ideas and initiatives, hosted the workshop.

Participants also included diplomats, U.S. officials, bankers, experts, and representatives of major international institutions, including the African Development Bank, the OECD, the UNDP, the IMF, and the International Forum for Sovereign Wealth Funds (IFSWF).

Through these centers of reflection, usually called “Think-Tanks,” significant projects are developed in the United States, projecting several scenarios.

In her opening speech, the Director of the Africa Investment Forum, Ms. Chinelo ANOHU, pointed out that “40 million Africans lived below the poverty line, mainly women and unemployed youth, due to the coronavirus pandemic. The sanitary crisis wiped out two decades of development efforts in Africa in just two years of global economic recession. Estimating a minimum of $1.2 billion in direct investment per year is needed to enable African countries to achieve strong economic growth.”

The Africa Investment Forum (AIF) platform is dedicated to the African continent’s financial investments and economic development.

Mr. Mark GREEN, President of the Wilson Center, and Mr. Eddy BROWN, Founder and CEO of Brown Capital Management, also spoke at the conference. They both  and emphasizedthat “it is essential to give Africa the attention it deserves.”

According to Mr. Mark Green, “African Sovereign Wealth Funds must adapt to the current crisis environment in a time of great upheaval and rapid change. He urged the leaders of African Sovereign Wealth Funds to stabilize their economies, respond to the challenges and seize the opportunities. According to him, “the future of the African continent depends on the implementation of major development projects that can ensure a high growth rate in each country. It is necessary to adapt to changes,” he insisted.

Mr. Eddy BROWN highlighted the achievements of the Brown Capital Management Africa Forum, underlining that “this meeting entitled “Strengthening the Role of African Sovereign Wealth Funds in the International Financial System,” is part of a series of meetings dedicated to Sovereign Wealth Funds preceded by the 2016 signature event titled: “Long-Term Sustainable Development in Africa: The Role of Sovereign Wealth Funds,” hosted in Washington, D.C., and the 2019 high-level meeting co-hosted with the Central Bank of Botswana on the theme “Sovereign Wealth Funds in Africa: Principles and Best Practices for Securing the Future.”

Brown Capital Management Africa Forum is a leading platform for substantive and solution-oriented dialogue on key trade, investment, and development issues in Africa and the U.S.-Africa relationship.

Dr. Slim FERIANI stressed that “in a rapidly changing world, it is important to properly assess investment needs and ensure the implementation of sustainable development projects.” Mr. Feriani also added that “through these meetings, new partnerships have been forged to better integrate African Sovereign Wealth Funds into the international financial system and that the dialogue remains open to strengthening commercial relations between various parties.”

Sovereign wealth funds serve as essential tools to stabilize economies, promote development and savings, and ensure the transfer of wealth to future generations. By 2021, SWFs had $10.5 trillion in assets under management, representing 11% of the global economy.

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https://www.lanation.dj/fsd-finance-reunion-de-haut-niveau-a-washington-d-c-les-fonds-souverains-africains-appeles-a-mieux-integrer-le-systeme-financier-international/

 

Signature of a memorandum of understanding between the Fonds Souverain de Djibouti and Meridiam Investment Fund for the Development of Infrastructure Projects.

Sunday, July 24, 2022, the Fonds Souverain de Djibouti (FSD) and Meridiam signed a memorandum of understanding to combine their skills for implementing infrastructure projects to contribute to the economic and social development of the Republic of Djibouti.

This agreement is the result of five months of long and patient work and serious discussions between the two parties;

It crowns the first-of-its-kind visit in Djibouti last February by a high-level delegation from Meridiam led by Marvin Bell, Director of Operations for East Africa.

The FSD’s Chief Executive Officer, Dr. Slim FERIANI, subsequently visited Meridiam’s head office in Paris to further discuss these issues with Mr. Mathieu PELLER, the Director of Operations for Africa, and his staff.

Meridiam is an investment fund with a mission specialized in developing, financing, and long-term management of sustainable public infrastructure in three sectors of activity: mobility of goods and people, energy transition and environment, and social infrastructure. Founded in 2005, Meridiam first invested in Europe and North America before focusing on the African continent, where it launched its operations in 2015. By 2021, Meridiam had US$80 billion in financing in more than 100 projects under development, construction, or operation in 26 countries in Europe, North America, and Africa, where four offices are established.

By signing this memorandum of understanding with Meridiam, the FSD is entirely in line with Vision 2035, aimed to develop the private sector by attracting one of its most prestigious players on an international scale.

Very active on our young continent (Africa), the Meridiam Fund is a pioneering investment platform concerned with innovation. Meridiam highlights green energy and buildings that respect the impact on indigenous populations and their environment, notably by recycling raw materials or using materials within reach of a given region.

In all of its projects in Africa, Meridiam prioritizes training local professional talents and then hands over the management of the projects to them once their skills are acquired in the field.

Meridiam has notably supported the realization of several essential projects such as Electric Buses and the commissioning of four Solar Power Plants in Senegal, the construction of a geothermal power plant in Ethiopia, the construction of a biomass power plant in Côte d’Ivoire or the support of the construction of Data Centers in several major African capitals, to name but a few examples.

This historic memorandum of understanding with Meridiam allows the Fonds Souverain de Djibouti to move on to the implementation phase of projects in partnership in various priority sectors in the short and medium term.

The project mentioned during the validation of this agreement are the following:

1. A solar or wind energy project to contribute to the energy independence of the Republic of Djibouti;
2. A social infrastructure project, such as a school or hospital, to improve the living conditions of fellow citizens;
3. One or more components of the industrial park project called Djibouti “Damerjog Industrial Park” contributing to the development of the Republic of Djibouti as an essential regional logistic and industrial place;
4. The project for a new international airport to develop services to the Republic of Djibouti;
5. A data center project to make the Republic of Djibouti a communications hub.

The Chief Executive Officer, Dr. Slim FERIANI, the Director of Investments of Meridiam, Mr. Guilhem VECTEN, Mr. Jean-André GBARSSIN, Chief Investment Officer of the FSD, and Mr. Kaid DJAMA, Analyst at the FSD were present at the signing ceremony of the memorandum of understanding.

In a brief speech, Dr. FERIANI welcomed the conclusion of such a partnership agreement, convinced that “this new partnership will consolidate the role of the FSD as an interlocutor and strategic partner of choice for foreign investors in Djibouti .”

Mr. Feriani added, ” we confirm we are targeting the partners of choice to realize infrastructure projects. Projects that will positively impact the country’s economy and population through the expected achievements in the concretization of the Vision 2035 carried by H.E. Mr. ISMAËL OMAR GUELLEH, President of the Republic of Djibouti”.

The FSD and Meridiam also share the same objectives of seeing the local populations benefit more from the various projects carried out, being respectful of their immediate environment, and that the principle of good governance is respected.

Both teams will pay particular attention to the issues of sustainable development, responsible investment, and inclusive growth of the projects implemented in Djibouti.

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Le fonds souverain de Djibouti et le fonds d’investissement Meridiam signent un protocole d’accord pour bâtir des infrastructures durables | LA NATION

Sunday, July 3, 2022, the Ministry of Digital Economy and Innovation and the Fonds Souverain de Djibouti have signed a memorandum of understanding for implementing investments in Digital and Innovation.

The Minister Delegate in charge of the Digital Economy and Innovation, Ms. MARIAM HAMADOU ALI, signed last Sunday on the premises of the Ministry a memorandum of understanding with the Chief Executive Officer of the Fonds Souverain de Djibouti, Dr. Slim FERIANI.

This agreement ratifies the collaboration of the two institutions for implementing the Djibouti Smart Nation roadmap carried by the President of the Republic. As an engine of growth, digital technology is a national priority for Djibouti to meet the challenges of job creation and wealth creation and a lever to transform public services and make them accessible to all citizens in all regions of Djibouti.

This partnership strengthens the collaboration of the Ministry with all other public institutions, including the Ministry of Budget and the Ports Authority, working to create a digital ecosystem that promotes investment, entrepreneurship, and innovation.

This agreement will enhance this collaboration for developing an ecosystem for the digital economy, including supporting the Sovereign Fund in projects with high added value. It provides, among other things, the establishment of Crowdfunding, the mobilization of funds dedicated to startups, infrastructure, and the development of “data centers.”

As part of this concept, a FinTech project in the form of the first platform of “Crowdfunding” in Djibouti, will provide a suitable instrument for financing our young project holders. The Minister insisted on valorizing the submarine cables to attract the world leaders of digital infrastructures to make Djibouti the Datacenter of Africa and to offer a high-quality connectivity service at affordable prices for our citizens. These investments will create high-level skills jobs for our youth.

The Chief Executive Officer of the Fonds Souverain de Djibouti, Dr. Feriani, emphasized the importance of boosting the entrepreneurial ecosystem of Djibouti.

Through this partnership with the Ministry of Digital Economy and Innovation, the Sovereign Fund will fully play its role as a financial arm and investment of the State in these areas.

The President of the Republic, HE. Mr. ISMAEL OMAR GUELLEH insisted on the need to achieve concrete results and implement digital projects as part of the ” Vision 2035 ” and the National Development Plan ” Djibouti Inclusion Connectivity Institutions. ”

The Memorandum of Understanding was signed, and work started on the “Crowdfunding” project to be realized in the next 6 to 12 months. Crowdfunding aims to finance SMEs and startups operating in Djibouti and to mobilize national investors, Djiboutian diaspora investors, and international investors.

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LE MENI ET LE FSD SIGNENT UN PROTOCOLE D’ACCORD POUR LA MISE EN ŒUVRE D’INVESTISSEMENTS DANS LE NUMERIQUE ET L’INNOVATION | LA NATION

The Chief Executive Officer of the FSD, Dr. Slim Feriani, was hosted on Thursday, June 9 by the President of the Regional Council of Tadjourah Mr. Omar Houssein and the other members of the Regional Council of Tadjourah (CRT). A meeting on awareness and popularization of the FSD’s role was held at the CRT’s headquarters. The two parties explored together the multi-sectoral investment opportunities in the region.

Dr. Slim Feriani conducted a tour of information and awareness in the regions to explain to local authorities and other economic and social actors the missions and objectives of the Fund. He had a meeting on Thursday, June 9, with all members of the Regional Council of Tadjourah, headed by the President of the Council, Mr. Omar Houssein.

The regional council of Tadjourah contributes with the State to the economic and social development of the region; it was for the participants to explore and identify with the CEO of the Fonds Souverain de Djibouti, the multi-sectoral investment opportunities in this region of the national territory.

The region’s chief town, the White City, draws strength from its advantageous geographical position. The trading port of Tadjourah has long acted as an interface between Ethiopian highlands and the interior of the Horn of Africa.

Dr. Feriani’s interlocutors focused their interventions on strengthening infrastructure that has recently benefited Tadjourah;

Projects supported by the authorities, such as the new Port of Tadjourah, the Port of Goubet, and the new Tadjourah-Balho corridor, make the City of Seven Mosques a central hub for the development of an entire region.

Added to its essential infrastructure is the appearance of a cornice and a residential area with beautiful villas, which further enrich the heritage of the antique city.

Tadjourah has many other economic assets in fishing, agriculture, tourism, and handicrafts, all of which provide opportunities for job creation. The Regional Council of Tadjourah and the FSD intend to work together to focus on the key sectors identified during these exchanges of views to stimulate the economy of the northern region.

EXPAND ITS FIELD OF INTERVENTION AND SUBSCRIBE TO THE DEVELOPMENT OF THE REGIONS

Dr. Feriani reminded his interlocutors of the role and strategic objectives of the Fund. This approach falls within the framework of the “Vision 2035” of His Excellency the President of the Republic Ismael Omar Guelleh, who has specified the FSD’s role and its objectives, of which the development of the local economy must become a priority.

This vision is realized through economic diversification, giving each region the means and opportunities to exploit its resources and potential in various sectors. To ensure sustained, inclusive, and, above all, lasting and sustainable growth.

One of the primary roles of the Fonds Souverain de Djibouti is to attract strategic, technical, and financial partners, both national and international, to ensure the financing and success of promising and structuring projects.

“The President of the Regional Council of Tadjourah and myself are confident,” said Dr. Feriani. The meeting with the Regional Council of Tadjourah was enriching, fruitful, and promising.

“The concerted and sustained efforts between the Tadjourah Regional Council and the Fonds Souverain de Djibouti can significantly positively impact our region economically and socially. Similar visits will be made regularly in the region to build together our development. We are sure that the FSD is an excellent ambassador for the promotion of our regions to investors and affirm our commitment to the success of this project,” said the President of the CRT, Mr. Omar Houssein.

“There is strength in numbers, and we will work hand in hand to generate strategic investments for the economic and social development of the beautiful and rich region of Tadjourah. The impact of the FSD must be on a regional and national scale in Djibouti,” concluded the FSD Chief Executive Officer, Dr. Feriani.

These meetings will continue with officials in other regions to raise awareness and popularize the FSD’s role.

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FSD – Le Fonds Souverain De Djibouti s’engage à soutenir le développement économique de la Région de Tadjourah | LA NATION

Led by Dr. Slim FERIANI, the Fonds Souverain de Djibouti (FSD) joined the International Forum of Sovereign Wealth Funds (IFSWF). This Forum now includes sovereign wealth funds from 40 countries.

The International Forum of Sovereign Wealth Funds (IFSWF), established in 2008, is a non-profit organization committed to promoting good governance and investment management practices and strengthening collaboration between funds. IFSWF also encourages a better understanding of SWF activity among governments and financial institutions.

The Fonds Souverain de Djibouti (FSD) expresses its willingness to adhere to the “24 Principles of Santiago” through this admission.

This code, developed by the members of the Sovereign Wealth Funds Working Group (IWG) at the creation of the Forum, sets out the Generally Accepted Principles and Practices (GAPP) to which the members of the IFSWF adhere to.

The following fundamental objectives guide these principles:

1- To help maintain a stable global financial system and free flow of capital and investment;

2- To comply with all applicable regulatory and disclosure requirements in the countries in which they invest;

3- Make their investments based on economic, environmental, and social risk considerations;

4- To have a transparent and sound governance structure that provides adequate operational controls, risk management, and accountability.

The Santiago Principles aim to promote SWFs’ independence, transparency and accountability.

Dr. Slim Feriani, chief executive officer of the Fonds Souverain de Djibouti, said:

“Admission to the IFSWF is an important step for the FSD. By joining the IFSWF community, we will be able to strengthen our governance and create new partnerships that will accelerate the development and diversification of the economy by maximizing the potential of Djibouti’s strategic resources.”

The FSD’s mission is the sustainable development and inclusive growth of Djibouti’s economy to create wealth that will serve the future generations of the Republic of Djibouti.

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LE FONDS SOUVERAIN DE DJIBOUTI EST SELECTIONNÉ PAR L’INTERNATIONAL FORUM OF SOVEREIGN WEALTH FUNDS (IFSWF) | LA NATION

https://www.ifswf.org/members/fonds-souverain-de-djibouti

 

In 2020, Djibouti announced the launch of its sovereign wealth fund. Speaking with Omar Ben Yedder, CEO Dr. Slim Feriani describes how he plans to deploy it to help diversify Djibouti’s economy.

Djibouti has often punched above its weight. This small country, in terms of landmass and population, is today one of the most sophisticated logistics hubs in Africa. Strategically located in the Red Sea, it is effectively a shipping gateway into Ethiopia, a country with a population of 120m inhabitants.

But the country’s ambitions are much larger. The route from Asia up the Red Sea and through the Suez Canal accounts for 30% of the world’s shipping activity. As such, Djibouti does not only want to service the east coast of Africa but also serve as an important hub for transhipments and other shipping activities along this route.

At the heart of its longer-term strategy is rapid economic diversification to become a leader in telecoms, finance, tourism, as well as develop new sectors such as renewables, sustainable natural resources and fintech.

Often preferring to take a long-term approach when it comes to positioning the country, the leadership in Djibouti has always been canny and strategic, not least in how it has managed to play its cards to simultaneously host the military bases of both America and China, two of the world’s superpowers. With other bases also present in Djibouti, the country makes a considerable amount of income from hosting these different powers, as well as the economic activity this generates.

The person hired to run the recently established Djibouti Sovereign Fund (Fonds Souverain de Djibouti – FSD) is Dr Slim Feriani, a Tunisian national based in London. He has over 25 years’ experience in international capital markets and recently served as a minister in his home country of Tunisia where he led two portfolios, those of industry and SMEs, as well as energy, mining and renewable energy.

The fund is expected to help improve governance and catalyse greenfield investments in strategic sectors of the economy, such as sustainable natural resources and energy, telco and digital infrastructure, financial services, general infrastructure, technology, tourism, healthcare and education. “This is a key part of the plan for economic diversification. Djibouti is not resource-dependent,” says Feriani.

‘A hidden gem’

Explaining the structure of the fund, Feriani says the government has placed its shares in three state-owned enterprises under its management. One of these is Djibouti Telecom and Feriani expects by the end of this year that up to 40% of its shareholding will be acquired by an international strategic partner.

Demonstrating the scope of the telecom group, in which FSD currently has 100% ownership, he points to a map which indicates the eight undersea cables passing through Djibouti and the potential in terms of the country acting as a connectivity hub for Africa, as well as a conduit between East and West – not to mention for data centres, call centres and more.

“Djibouti Telecom, like Djibouti, is a hidden gem. Hidden gems, once you polish them, they shine and rise. With its location and subsea cables, Djibouti Telecom should be a key player in interconnectivity within Africa and then, from Africa and to the rest of the world.”

Besides the dividends from its underlying portfolio companies, recurring cashflow for the FSD includes 20% of the annual rent that the different military bases are paying the government of Djibouti.

Finally, as per the FSD law enacted in 2020, its mandate also includes managing 60% of the reserves of the CNSS, the state social security fund. Historically, the CNSS portfolio has been invested in term deposits in the local banking sector. The objective is to diversify some of the CNSS funds into different asset classes.

He cites other successful funds such as those of Chile or Australia’s superannuation fund as well as highly successful US university funds such as those of Harvard or Yale as examples to follow. Right
now though the risk appetite will be measured. “We have to be conservative and prudent. We’ll take measured risk to generate decent dollar returns, starting with a  selective international fixed income, real estate and the usual asset classes you identify with pension funds.”

Inspired by Singapore success story

The inspiration for the FSD has been Singapore’s Temasek. “In many ways, our fund resembles Temasek, the Singaporean sovereign wealth fund, one of the most established funds in the world today,” he says.

The two countries are similar – both are small yet at the heart of large and dynamic regions, even though Djibouti is 30 times the size of Singapore in terms of its landmass and is a coastal country rather than an island.

“Singapore started Temasek with Singtel, Singapore’s telecom company, roughly 45 years ago. They didn’t have much in terms of oil revenues or any other resource. FSD has been set up with what I feel are the jewels of the country: Djibouti Telecom is the national champion of telecoms, 100% in our portfolio now.

“We also have 40% of the national holding company, Great Horn Investment Holding (GHIH). GHIH owns 27 companies. It accounts for a significant part of the economy because it has all the ports and free zones infrastructure and a number of important businesses, such as Air Djibouti. The third portfolio holding, as per the FSD law, is Electricité de Djibouti, the national champion in terms of energy. These three businesses, in terms of historical book value, are worth over $1bn already.

“By the end of this year as Djibouti Telecom goes through the process of opening its capital, we expect that up to 40% of its shareholding will be acquired by an international strategic partner, creating synergies for further operational excellence and market expansion.”

Investment strategy

FSD, according to Feriani, will start by investing in Djibouti itself, followed by projects that enhance regional integration, before looking at diversifying its assets internationally – although that is in the medium to long-term ambitions of the fund. “We can’t talk of building an Africa we want, by Africans for Africans,” he argues, “if we ourselves don’t first lead with the investments. But the fund will be run with a diversified portfolio – by asset classes, by sectors and by geographies.”

Feriani says that ticket sizes of the investments will vary depending on the industry and the complexity. The port infrastructure for example involves multi-billion projects over different phases. Creating a hub for data centres, on the other hand, will involve smaller equity investments in the millions of dollars.

The fund will be a minority investor with up to a 25% stake in future greenfield projects as the objective is to encourage PPPs where the national and international private sector becomes the key engine of economic growth and job creation.

A week after our interview, it was reported that Meridiam, an important France-based investor with $18bn in assets under management, was in Djibouti to scope potential investment opportunities, including as co-investors with FSD. One venture where Feriani sees an opportunity is an ongoing industrial park project called Damerjog Industrial Park.

Djibouti’s assets 

Feriani is keen to emphasise that one of Djibouti’s main assets is its peaceful people and its stability. A key point of note to investors, Feriani adds, is the stability of its currency, which has been roughly 178 to the dollar for the last 20 years or so. Hence, unlike many emerging markets there is no foreign exchange risk to worry about for investors.

“This region,” he adds, “is replete with success stories of smaller nation states playing an outsize role in terms of economic influence. Dubai is the obvious example, but Qatar was a small country with a population of 300,000 – today it’s 3m people, of which 90% are expats.”

Djibouti is no exception, he stresses. “Even I was surprised by the size of the opportunity – although I have been investing in nearly 100 countries throughout my career.”

The government is looking at investments of €12bn as part of its national development plan 2020-2024, with annual growth expected to be around 8.5% by 2025. This is within the framework of the Djibouti 2035 vision and the medium-term focus on inclusion, connectivity and institutions, explains Feriani.

Part of his remit will be to help attract global investors to co-invest in FSD. His job, as much as anything, will be to originate opportunities for investors and he anticipates that international roadshows will showcase some of the opportunities. “Part of our job is to make sure we are a source of ideas; and bringing in international co-investors is a crucial part of our work.”

He then mentions the natural resources sector, an area he is familiar with from his time as a minister in Tunisia. “It’s still early stages, but Lake Assal, which is 150m beneath sea level, has not been mined at all and studies point to a potential of riches.”

Question of timing

Given that he will be investing for future generations, isn’t it a bit risky to be betting on Djibouti first? Feriani disagrees: “It’s a question of timing and priorities in the short term. It has to be Djibouti first, that’s the right thing and we’re talking about major investments and diversifying the economy. We are trying to invest in several sectors, really diversifying and reducing the risk of the Djibouti economy being over-reliant on one sector – the ports business. But our mandate allows us to invest up to 60% of our assets outside of Djibouti.”

Djibouti has built a competitive advantage in logistics as the hub servicing Ethiopia. Roughly 90% of Ethiopian trade goes through the country, which means that the country is exposed one way or another to Ethiopia’s economy. I ask him whether the current conflict in the country has dampened prospects.

He says the combination of Covid-19 and the Ethiopian crisis has impacted on Djibouti’s growth numbers although these have since picked up. The fact that many primary goods get through has reduced the impact of these two factors and the prospects are looking good.

“We have a vested interest as a neighbouring country and as a brotherly country to see things settled. Ethiopia was consistently one of the fastest-growing economies in the world. We benefit from them continuing to develop their country.”

However, he points out that the ports activities are also being diversified in their nature. “As we speak [in February] it has been announced that OCP [the Moroccan giant in phosphate] have struck a deal to transport major quantities of phosphates through our ports to take them to Ethiopia [as part of a massive fertiliser plant project]. And there’s still so much more we can do and in terms of what can be done.”

Feriani has been in the job for a little over six months and says he could not be more enthused with the opportunities that he’s discovering with each
conversation. He values highly the clear political will  in Djibouti to get things done and succeed.

It seems to be a match made in heaven given that the position involves working strategically with policy makers whilst putting a compelling investment case to crowd in private sector players, which is an area where he is very comfortable. It was as a fund manager and investor in emerging markets that he made his name. He feels that it’s this unique combination of public service and private sector experience that made his candidacy a successful one.

“They [the government] hired one of the top executive recruitment firms for this position and from the interviews I think they were looking for someone with not just investment experience who understands finance, but someone who could lead and be aligned to their national development plan.” He praises his board and especially the national President Ismaïl Omar Guelleh, who he describes as a visionary.

Demonstrating impact

But Feriani knows that he will need to deliver some quick wins to show the impact the fund can have and to validate the rhetoric. “The future is very exciting and we will be investing for the long term but the short term is important too. Our view is we need to make things tangible already because people want to see things changing. There will be some investments realised this year.”

One of the first projects he’ll be launching will be a crowdfunding platform to help startups and SMEs – something he initiated successfully in Tunisia. He is also working on starting the first leasing company. These greenfield projects are in line with the country’s strategic focus on financial inclusion and diversifying access to finance, Feriani adds. Another investment that should bear fruit this year is in data centres, in parallel with the Djibouti Telecom transaction.

We had been speaking for over an hour and Feriani was still bursting with excitement at the opportunities that are ready for investment. A few minutes after the interview ended, Feriani sent me a WhatsApp message with photos of turquoise sea, beaches and sunsets.

“In case you didn’t believe me that tourism is another hidden gem; see the few pics from our last holidays here with the family. Whale sharks, coral reefs, amazing beaches.” Coming from Tunisia, he should know!

Djibouti’s sovereign wealth fund is in very good hands. Plenty more exciting developments to look forward to from this small nation with an explosive punch.

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Creating Africa’s Temasek in Djibouti – African Business

The Republic of Djibouti announces the creation of the Djibouti Sovereign Fund (Fonds Souverain de Djibouti – FSD) following the enactment of a law dated 29 March 2020 and the promulgation of the implementing decrees on 24th June 2020.

The creation of this fund is a key measure of the “Vision 2035” policy which guides the government’s actions and the economic strategy of the country in the long term: to position itself as a front-line international commercial, logistics and digital hub. It constitutes a major milestone as it shall serve as an instrument of action that mobilizes resources, with real investment capacities, and as an efficient tool for accelerated economic transformation.

Established in the form of a public limited company under private law whose sole shareholder is and will remain the State of Djibouti, the Fund belongs to all Djiboutians. Its purpose and missions are fully aligned with the country’s development goals. It is aimed at “gathering” national wealth in order to increase Djibouti’s capacity to invest in an optimized and efficient way. The DSF will also modernize and maximize the country’s economic potential and attractiveness. The Fund will serve as a tool for today’s growth and employment, while at the same time fostering the creation of large reserves for future generations. It is an inter-generational instrument that brings together the requirements of the short term with those of the long term.

The Fund will also have the role of enhancing Djibouti’s “capacity to act”. It will enable an enhanced management of projects while giving priority to the country’s national and strategic interests, to increase its bargaining power with domestic or international partners and to be the strong and committed partner sought by foreign investors.

The Fund’s investments primarily target the Republic of Djibouti and countries with economic connections to it, particularly in the region of the Horn of Africa. The goal is to invest and co-invest in key sectors of the economy such as telecoms, new technologies, energy, infrastructure, logistics, agriculture, and fishing. The Fund will focus on projects that support sustainable growth and the implementation of the energy transition.

The Fund is not designed as a “venture capitalist” whose ambition is to generate margins and revenues in the short term. The Fund will act as a long-term investor and is required to reinvest the entire net profits of its activity.

The Fund has chosen a sustainable financing structure that combines a significant initial investment with recurring resources. The law that establishes it provides for contributions spread over time that could reach $1.5 billion within a ten-year period.

Transparency and governance are key components of the legitimacy and credibility of the Fund.

In fact, the Fund complies with the best international standards namely the Djiboutian law and the Santiago Principles in terms of independence and responsibility of its managing bodies, corporate governance, transparency, and performance reporting.

With the creation of the Djibouti Sovereign Fund, despite the global health crisis related to the coronavirus pandemic, the country is determined, more than ever, to invest in the future and tomorrow’s economy.