About CountryDjibouti’s spectacular strategic location is its main economic asset. The large, well equipped Port of Djibouti, managed since 2000 by Dubai Ports World, straddles the juncture of sea routes between the Far East, the Arabo- Persian Gulf, Africa, Europe, and the East Coast of the United States. It plays a real and increasing hub rule and distribution centre for neighbouring economies as well as a gateway to internal African markets.
Transshipment is growing, and currently accounts for approximately 28% of port business. The increase of transports and logistics activities leads the country to undertake a huge investment estimated at 5.8 billion of dollars in the ports and infrastructures development. Thus, new ports and free zones are currently under construction. Among it, a multipurpose port in Doraleh, two new ports in the North of the country (Tadjourah and Goubet) as well as a port dedicated to the livestock export in Damerjog. Djibouti is also modernizing its road infrastructures through the construction of a new railway connecting the country to Ethiopia.
Services provided by Djibouti’s port, airport, financial institutions, and related sectors account for more than 80% of GDP. In recent years, intensive port activities, improved management and, especially, public investment in infrastructures and Foreign Direct Investment have significantly improved Djibouti’s economy. For a decade the country has a positive and sustained growth with a GDP of 6% in 2014. Inflation is relatively moderate and remains around 3 percent in the past 3 years.
Djibouti has moderate tax rates. The top income tax rate is 25 percent. Other taxes include a property tax and an excise tax. In the most recent year, overall tax revenue as a percentage of GDP was 20 percent.
Djibouti’s financial sector has been growing as more banks, particularly foreign banks, have entered the market. The government has made efforts to promote the integrity and efficiency of the banking sector and adopted new banking laws in 2005. Since 2006, this sector has particularly been developed with the arrival of ten banks in a market limited to only two banks for a long period. At the regional level, Djibouti is strengthening its position as a financial platform to neighboring countries thanks to a stable currency pegged to the US dollar and the total absence of restrictions on the transfer of currency and profits.
In tourism, Djibouti has all the assets to become a tourist destination internationally. It registers a steady growth of tourists over the past decade. The country has a reputation in the international diving community thanks to the beauty and diversity of its marine wildlife. Indeed, with Australia and the Caribbean, Djibouti is the third country in the world where one can approach the whale sharks that come to breed in certain periods of the year.
Djibouti has pursued a moderate foreign policy and the country enjoys a political and social stability which constitutes an added comparative advantage. Djibouti’s population is estimated at 913,714. French and Arabic are the official languages used in government, business and daily activities. English is becoming more widely spoken for professional purpose.
Source: Djibouti National Investment Promotion Agency (NIPA)