Djibouti is the natural gateway to Africa and provides critical sea, air, rail and road linkages for East Africa. Its commercial activities revolve around its liberal business environment, regional free trade access and strategic location as a Red Sea transit point.
Open and growing economy
According to the IMF, Djibouti’s GDP growth rose from 4.5% in 2011 to 5% in 2013, whilst the projections for 2014 to 2016 are for real GDP growth of about 6%.
Furthermore, over US$9bn of investment is being made in sea and air ports, rail infrastructure, maritime and free zone sectors.
In addition to shipping, transport and logistics, other key sectors include financial services, tourism, industrial fishing, natural resources, and telecoms.
Djibouti has a strong regulatory framework; a safe and stable political and social environment; a stable currency linked to the US Dollar, with an exchange rate which has not changed for 50 years; an educated, multilingual workforce; a strong commitment to improving transparency; and an active anti-corruption programme in place."As an anchor of stability in the Horn of Africa, with a growing economy and strong trade and investment links with the rest of Africa, Asia and the Middle East, Djibouti is an important economic and trade hub for the region."
Ismaïl Omar Guelleh, President of the Republic of Djibouti
The Horn of Africa is blessed with an abundance of natural resources, including oil, precious metals and minerals. The growth of intra-African trade as well as trade with the rest of the world has increased the opportunity for investment in Djibouti.
Djibouti is one of the 19 member states of COMESA, the Eastern and Southern Africa common market. As such the country benefits from the Free Trade Agreement between COMESA members. In a bid to further promote trade, Djibouti is involved in discussions with other countries to establish the COMESA-EAC-SADC Tripartite Free Trade Agreement (FTA), covering 26 countries with a total GDP of approximately US$1.0tn and a combined population of nearly 600 million.
Economic development also supports political development, and Djibouti is enhancing its political system, with greater plurality evident through its municipal and parliamentary elections. Djibouti's institutions provide the core foundation for political stability in the country.
The country has been praised for playing a constructive role in stabilising the region and in working towards a resolution of the Somalia crisis. Djibouti has a wider commitment to high-level co-operation with Western partners - not least in security and trade, as host to forces from NATO, the U.S., France and Japan in support of anti-piracy, anti-terrorism and broader defence and security requirements.
Djibouti benefits from an educated and multilingual workforce. The government agency in charge of employment and professional training, the National Employment Agency for Training and Professional Integration (ANEFIP), helps companies to source skilled workers from the Djiboutian population. It has also established technical training programmes to help train Djiboutian people with job specific skills.
The port and the free zone have created significant employment. In addition, the government is working hard to boost its other major sectors such as tourism and finance in order to create more jobs and is actively seeking investment in these areas.