Saudi Arabia and Djibouti Sign Investment Protection Agreement

In a significant move to bolster economic ties, Saudi Arabia and Djibouti have recently signed an agreement aimed at protecting mutual investments. This deal was formalized during the 28th World Investment Conference held in Riyadh from November 25 to 27, 2023. The agreement is expected to provide a range of benefits for investors, including investment protection, national treatment, and fair and equitable treatment. Additionally, it emphasizes transparency and the right to resolve disputes through either national courts or international arbitration.

The primary goal of this agreement is to create a secure business environment that encourages increased investment across various sectors. By doing so, both countries hope to strengthen their bilateral relations and economic partnerships. This initiative aligns with the remarkable growth in bilateral trade, which reached approximately SR7 billion (around $1.86 billion) in 2023. Such figures indicate a promising step towards sustainable growth and enhanced economic connections between Saudi Arabia and Djibouti.

The agreement was signed by Khalid Al-Falih, the Minister of Investment for Saudi Arabia, and Safia Ali Jadila, the Minister of State for Investments and Private Sector Development in Djibouti. Both officials underscored the importance of this deal in motivating the private and government sectors of both nations to invest and pursue ambitious investment programs.

Earlier this month, the two countries further solidified their logistical, trade, and investment ties during the sixth session of their joint committee, which took place in Riyadh on November 18. This meeting was chaired by Saleh Al-Jasser, the Saudi Minister of Transport and Logistic Services, and Mahamoud Ali Youssouf, Djibouti’s Minister for Foreign Affairs. Al-Jasser, in his opening remarks, emphasized the long-standing relationship between the two nations and expressed optimism that the discussions would pave the way for enhanced trade and investment, particularly in the logistics sector.

In August, Saudi Arabia and Djibouti took a significant step by launching a maritime initiative aimed at strengthening trade ties. This initiative includes the establishment of new shipping lines designed to improve connectivity with East African markets, which cater to a consumer base of approximately 500 million people. These ongoing efforts are expected to significantly enhance bilateral trade, investment, and regional connectivity, marking a promising new chapter in the economic partnership between Saudi Arabia and Djibouti.

The recent agreement between Saudi Arabia and Djibouti is not just a formal document; it represents a commitment to fostering a robust economic relationship that can benefit both nations. As they work together to enhance trade and investment opportunities, the potential for growth and development in the region is immense. This partnership could serve as a model for other countries looking to strengthen their economic ties, demonstrating that collaboration and mutual support can lead to shared prosperity.