Description
Djibouti’s laws encourage foreign investment, with state-run media providing favorable coverage of projects funded by foreign entities. There is no screening of investment or other discriminatory mechanisms. Navigating the bureaucracy, however, can be complicated. Foreign investment in Djibouti is constrained by inadequate investor protections, difficulty in obtaining credit, and lengthy procedures for creating a new business. Certain sectors – most notably public utilities – are state-owned and are not open to investors. In March 2015, however, the Djiboutian government approved a bill liberalizing the production of electricity. The state-owned Djibouti Electricity (EDD) has had a monopoly on electricity production for decades. The bill will begin the process of opening this sector to competition, though this will likely be slow, as EDD will retain all rights to the transmission and distribution of electricity. Nonetheless, the liberalization of production is a positive step towards promoting private investment in the energy sector.
