Open AccessIMPACT OF CHINA’S INVESTMENT ON AFRICA TRADE AND FINANCING: CASE OF DJIBOUTI
Author(s) -
Kadra Ismail Mohamed
Publication year - 2021
Publication title -
advanced international journal of banking, accounting and finance
Language(s) - English
Resource type - Journals
ISSN - 2682-8537
DOI - 10.35631/aijbaf.39006
Subject(s) - landlocked country , china , investment (military) , international trade , business , debt , bilateral trade , trade facilitation , trade barrier , economics , international economics , finance , geography , political science , politics , archaeology , law
China economic reform led to increase substantial bilateral commercial relation between china, and rest of the world particularly African countries. African soil is rich with natural resources, which is yet to exploit. Moreover, some horn African countries exhibit vibrant and strategic port that link the trade between Africa, Europe and Asia countries. As result, china has become sources of funding, strong trade partner and major investor for those countries. For the past eleven years china has succeed to seize the Djibouti ports, hence china win strategical points. This is because Djibouti lies at the intersection of shipping lanes vital to many economics in both Europe and Asia; and it is the gateway of landlocked country in horn of Africa (Ethiopia). Therefore, china has widely invest in Djibouti in term of providing funding for construction, bilateral trade mostly maritime financing. This study is intend to analyse the long-term effect of china’s investment on trade and financing in Djibouti. To analyses the case, this study used trade and debt data of Djibouti from 1992 to 2019. The finding confirmed that china investment positively affect the trade activities as well as transportation logistic, but it adversely affect the financial state of Djibouti.