Owned by the State and managed by the former executive director of Fonsis in Senegal, the FSD aims to “generate savings for future generations”.
The authorities of the Republic of Djibouti launch the Sovereign Fund of Djibouti (FSD), endowed with 1.5 billion dollars within ten years, in accordance with the law of March 29 which established it. “Despite the global health crisis linked to the coronavirus pandemic, the country is more determined than ever to invest in the future and the economy of tomorrow,” said the press release from the Djiboutian presidency.
The FSD takes the form of a public limited company under private law, the sole shareholder of which is, and will remain, the State of Djibouti. “It is a national investment and intergenerational savings fund investing in projects having a positive impact on the economy, employment and on the long-term management of the country’s financial reserves, for future generations”, specifies the second article of the law.
Invest in Djibouti, as a priority
Less than 48 hours before the national holiday celebrations on June 27, Ismaïl Omar Guelleh (IOG), unwrapped a gift that he intended “for all Djiboutians”. The President of the Republic takes advantage of a lull in the health calendar, to re-enroll in the Vision Djibouti 2035 plan, which he had presented to his compatriots the day after his re-election in 2016, to serve as a program until the election from 2021.
“Flagship measure of this vision”, the FSD wants to be the tool for the economic transformation of Djibouti called, according to government wishes, to play the role of commercial, logistics, port and digital hub for the entire sub-region. region. The fund will invest primarily within the borders of the country, but also plans to engage with its neighbors, in the sectors of telecoms, energy, new technologies, infrastructure and logistics, tourism, agriculture and fishing.
Under the direct supervision of the presidency, the FSD is directed by a board of directors of eight members, including representatives of the main ministries. The fund is chaired by Mohamed Sikieh Kayad who, after a stint at the World Bank, has served as economic advisor to Ismaïl Omar Guelleh for several years.
Register for the long term
In terms of operation again: the fund administrators will be responsible for defining the main strategic lines followed by the general management, whose reins are entrusted to the Senegalese Mamadou Mbaye. This former Polytechnic and Ensae, was before that Executive Director of the Sovereign Fund of Senegal (Fonsis) for six years.
To read on Jeune Afrique Business + Mamadou MBaye leaves Fonsis and takes the reins of the sovereign fund of Djibouti
Mamadou Mbaye’s mission is to structure the fund and ensure its development, in particular through the entry of potential national and international partners.
“The Fund is not a venture capitalist whose objective is to ensure short-term margins,” assures the Djiboutian presidency in its document. The FSD is long-term and its success will be measured by the gradual constitution of significant financial reserves for future generations ”.
Reserves constituted, in addition to returns from the portfolio of future projects and the optimization of the assets transferred to the fund, of 40% of the shares held by the State in Great Horn Investment Holding (GHIH). The structure was created in 2016 to manage the country’s port and logistics infrastructure, as well as all of the actions of Djibouti Telecom and the management company of the pier at the Doraleh oil terminal.
Djibouti added to the basket all the shares of the national company, future public establishment Electricité de Djibouti, as well as a capital endowment in the amount of $ 100 million. Recurring flows must be added, including an endowment of up to 20% of the income from military cooperation contracts, a second levied on the levies carried out in the free zones, then a third levied on the variable fees relating to the realization and the exploitation of the Ethiopia-Djibouti gas pipeline.
Under its statutes, the FSD has the obligation “to reinvest all of the net profit from its activity”, the State being able to be remunerated only up to a maximum of 10% of this net profit.
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