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The mandate of the Djibouti Sovereign Fund is to foster the economic development of the country and create intergenerational savings. The DSF conforms to strict principles of corporate governance, follows an operational model that is consistent with the Fund’s strategy and employs an investment strategy that strenghtens the Republic of Djibouti’s influence in the region and worldwide.
Message from the Chief Executive Officer
Dear Visitors,
As Chief Executive Officer of Djibouti Sovereign Fund, I am pleased to welcome you to our website.
Djibouti Sovereign Fund (DSF) was established by Law n°075/AN/20/8ème L on the 29th of March 2020. DFS serves as an innovative instrument for the economic development of the country for both present and future generations. Therefore, it is fully compliant with the objectives of the country outlined in the “Vision 2035”.
DSF aims to contribute to the transformation of Djibouti into a commercial, digital, logistic, and port hub.To this end, we intend to use the investment of public resources as a driving mechanism and attract private investment around projects with high added value in order to optimize and enhance the national wealth for an appropriate diversification and increased competitiveness of the Djiboutian economy.
We also focus on improving the performance of public enterprises and their compliance with international standards of governance.
Through the creation of DSF, the Government of Djibouti has sought to be innovative by pooling assets such as national companies (Electricité de Djibouti, Djibouti Télécom, Great Horn Investment Holding) as well as recurring revenue streams from strategic activities. The key objective is to mobilize relevant resources and create a leverage effect in order to meet the pressing needs of the country, particularly in the energy, infrastructure, industry, fisheries, tourism and financial services sectors, and therefore contribute to Djibouti’s economic development, including the strengthening of human capital, and the creation of intergenerational savings.
In this context and in support of best practices, such as the Santiago Principles and the Equator Principles, DSF wishes to become one of the best sovereign wealth funds regarding governance and transparency so as to design and implement responsible and sustainable investments in Djibouti, as well as in the Horn of Africa and the world.
To this end, we encourage national and international investors to co-invest with us in projects that create jobs, particularly in Djibouti and the Horn of Africa, through joint ventures or successful economic alliances.
Together with our stakeholders, we structure, invest, develop and operate projects with high growth and employment potential for current and future generations in the Republic of Djibouti.
Mamadou MBAYE
Chief Executive Officer
Djibouti Sovereign Fund
Governance
The DSF is committed to transparency and adheres to strict norms in regards to its operations.
Here are our three main principles of Governance:
Structural
efficiency
We follow a simple governance structure with a single governing body to ensure efficiency.
Operational
independence
The Directorate-General, the Investment Committee and the Investment and Asset Management Team execute properly the strategy defined by the Directorate-General and approved by the Board of Directors.
Compliance with the
Santiago Principles
We have put in place a conflict of interest management procedure, transparent communication and clear reporting rules, and a policy for the safeguard of the DSF’s autonomy.
The DSF’s governance structure is composed of the following bodies:
The Board
of Directors
Directorate-
General
Investment
Committee
Audit
Committee
The role of this body is to define the Fund’s strategy, ensure compliance with the rules set out in the Statutes and appoint the members of the Investment Committee.
There are a maximum of eight members, including a chairman, appointed by presidential decree. These members are representatives of key sectors for the country’s economic development namely, the Ministry of Economy and Finance, the Ministry of Budget, the Central Bank, Great Horn Investment Holdings and the Presidency of the Republic.
The Managing Director directs the development of the Fund and ensures compliance with governance and transparency parameters.
The Investment Committee is an independent body. It rules on all investment opportunities but presents to the board for approval all investments that exceed the thresholds set by the statutes.
The auditing tasks are carried out by an internal audit committee, which reports to the Board of Directors, and an independent external audit committee, which is supervised by the Inspector General of the State.
Operating model
The Djibouti Sovereign Fund has chosen a sustainable financing framework that combines a significant initial investment with recurrent flows in order to guarantee a long-term flow of funding.
The aim is to pool Djibouti’s resources in order to create “capital assets”. Similarly, it is important to put in place a “state savings” mechanism that would finance investment. The goal is to eventually reach a number of endowments and assets under management that could reach 1.5 billion dollars in ten years.
The Sovereign Fund does not operate as a “venture capitalist”. Instead, it aims to generate margins and revenues in a short term perspective.
Also, the DSF is a long-term investor which must reinvest the entire net income of its activity.
The law has furthermore set a formal limit to the remuneration of the State on the net income of the Fund. Exceptionally, the DSF may pay to the State a portion of the net income (after taxes) which shall not exceed 10%.
Investment Strategy
The investment strategy of the Djibouti Sovereign Fund is similar to its strategic objectives:
To develop the domestic economy
To increase the DSF’s assets
To create strategic investment partnerships
The DSF’s mission is to identify investment opportunities that directly or indirectly create value for the Djiboutian economy. As such, the Fund takes all necessary measures to ensure the effectiveness of each investment through the execution of these five core stages:
Origination
Technical analysis of opportunites
Validation
Execution
Monitoring and management of
government transfers portfolios