17 January 2019
by THE EDITOR
Embezzlement of public funds, money laundering, foreign property deals – for many years, these crimes were associated with African dictators accused of taking aid money and investment in their country back out to European capitals, spending millions of dollars on themselves and their families to the detriment of their people.
In many cases, these leaders have been ousted, with democracy on the rise across the continent and the political system reformed so that these crimes cannot still be countenanced.
But not in Djibouti, where investment has disappeared as the ruling Guelleh family consolidates its grip on power and builds its business and property portfolio abroad.
Recent years have seen the resource-poor, arid country boom as major global powers, including the United States and China, pay good money – billions of dollars – to make use of its geopolitical location. The US AFRICOM’s headquarters are based at Camp Lemonnier, close to the capital, while a new Chinese facility a short distance away, opened to much fanfare, became the People’s Liberation Army (PLA)’s first foreign military base in August 2017.
China in particular has been strategic in its approach, offering cheap loans to Djibouti to create an inescapable ‘debt trap’ that leaves President Ismaïl Omar Guelleh beholden to Beijing. In March, the Centre for Global Development reported that Djibouti is projected to take on public debt worth around 88 percent of the country’s overall $1.72 billion GDP, most of which is owed to China. This is far more than it can realistically pay back, leaving itself open to extortionate demands from its supposed ally.
Meanwhile, Chinese companies have also been supporting their government’s move into Djibouti by signing lucrative deals with the Guelleh regime, often to the detriment of the African country’s traditional allies and existing partners.
The situation of the Doraleh Container Terminal (DCT) – Djibouti’s major economic asset – is a case study in how Beijing can overwhelm the status quo in a few short years. Soon after Djibouti accepted Chinese money, it initiated a dispute with its longstanding commercial partner at the port, the UAE-based DP World, as it sought to secure total control of the lucrative port. Despite multiple international rulings in favour of DP World and against the Guelleh regime, the Djiboutian Government unilaterally took over the port, offering no compensation to DP World and without a care for international business norms. The concession is now reportedly being offered to a Chinese company, China Merchants Holding, a move that would give Beijing unprecedented influence in the country.
While this illegal activity may benefit the Guelleh family and their Chinese allies, there is little evidence that this influx of capital or these biased business decisions are offering any benefit to Djibouti’s people. And there are indications that Guelleh’s illicit activities may be now facing international scrutiny.
French watchdog and anti-corruption NGO Sherpa, alongside members of the Djiboutian diaspora, has filed a complaint in the French courts for “misuse of corporate assets”, “embezzlement of public resources”, “breach of trust” and “bribery of foreign public officials”.
The complaint accuses the family of President Guelleh, of owning “a valuable real estate property in France, mainly in Paris, the financing of which [..] simply because of the remunerations poured to the members of [his] family and to his relatives.” The complaint mentions three apartments that are said to be owned by the son-in-law of the president and his daughter in the 8th, 16th and 17th districts of the French capital.
These are unlikely to be the last such accusations to emerge against Guelleh’s family, whose actions abroad mirror its approach at home. Businesses owned by members of the president’s family remain untouchable within Djibouti itself; competitors face an uphill struggle, often against the state itself, and are often taken over or forced out of business by their Guelleh-backed rivals.
The actions of the Djiboutian president are having a lasting and damaging effect on his country’s development, driving away foreign investors and ensuring that the public purse and government machine work only for his interests. Djibouti’s people are the ones paying the price of their president’s corruption, abuse of power and law-breaking.
In Djibouti, the old style of African dictator lives on.