Economical overview
Djibouti's economy is almost entirely based
on the service sector, especially revenues from the
port, the railway to Ethiopia's capital Addis Ababa and
from the foreign military. The economy has grown rapidly
since the turn of the millennium, thanks in large part
to money from foreign military bases and new investments
in port traffic. However, the income comes only a small
elite in the capital.
Despite the growing economy, Djibouti is poor and
dependent on foreign aid. The old colonial power France
pays about $ 30 million a year for its naval base, one
sixth of which goes to the Djiboutian defense and the
rest to various development projects. At the same time,
the French forces do not have to pay any income tax or
import duties.
-
Countryaah.com:
Major imports by Djibouti, covering a full list of top products imported by the country and trade value for each product category.
The United States pays $ 63 million a year for its
base and has also increased its other aid to Djibouti.
In recent years, support from Japan, China, the EU and
Arab countries, such as Saudi Arabia, has also grown.
In order to grant new loans to the country, the IMF
has, among other things, demanded that the government
tighten the economy, not least by cutting the public
sector and reducing government and foreign debt. Plans
are also in place for the privatization of the largest
state-owned companies. Demands have also been made for
the government to address the widespread corruption.
-
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including DJU which represents the country of Djibouti. Check findjobdescriptions to learn more about Djibouti.
High indebtedness
The slow pace of these changes led to the IMF
freezing its loans in 2003-2007. After some improvement,
the IMF repaid loans in 2008, but the old financial
tightening requirements remained. Djibouti could then
enter into an agreement with the so-called Paris Club
for a debt relief of $ 69 million. An IMF-funded program
for poverty reduction, among other things, expired in
2012 with satisfactory results according to the Fund,
which has, however, continued to warn of weaknesses in
the Djibouti economy: large budget deficits, high
indebtedness and deep social and economic gaps in the
population.
Not least, the IMF has expressed concern over growing
debt to China in the 2010s. Djibouti's total external
debt grew from 97 percent in 2016 to 121 percent in
2019. Most of the increase in debt was made up of loans
from China.
Revenues from military bases, railways and ports are
primarily a political and economic elite, while nearly a
quarter of rural residents live in extreme poverty,
according to UN agency Ocha. The IMF states that just
over 40 percent of the population is extremely poor. The
World Bank is active in the country with projects in,
for example, water and electricity supply, agricultural
development and poverty reduction.
During the war between Ethiopia and Eritrea in
1998–2000, more and more Ethiopian goods were shipped
via the port of Djibouti. Even after the end of the war,
Djibouti remained the most important port for Ethiopia's
foreign trade. Djibouti also has Ethiopia's merchant
fleet. In 2009, almost four-fifths of the goods that
passed the port were on their way to or from Ethiopia.
However, in the summer of 2018, Ethiopia warned that up
to two-thirds of the country's foreign trade would be
gradually moved from Djibouti to Eritrea as part of a
peace process between the two countries.
Extensive imports
The port of Djibouti was privatized in 2000 but was
again state-owned in 2018 following a conflict between
the state and the private owner. Tax-free zones for
businesses and free-trade zones have been created, as
well as a new port facility, Doraleh, north of the
capital to receive large container vessels. China has,
among other things, financed the construction of a port
for livestock exports and one for salt exports in
Damerjog.
Many French companies have left Djibouti, while the
Ethiopian and Chinese companies have become more.
Djibouti imports almost all its food, most of it from
Ethiopia. When the harvesters in the neighboring country
fail, Djibouti also suffers from food shortages and
increased prices. In the second half of the 2010, over
half of the Djibouti in rural areas suffered from food
shortages, according to the UN agency Ocha.
Djibouti has for many years had a deficit in trade
with the outside world, that is, imports exceed exports.
Exports mainly consist of livestock, hides and skins as
well as the re-export of goods from many African
countries via the large port. The most important import
goods are food, qat (khat; a drug with a narcotic effect
such as chewing gum), oil products and machinery. Also
the current account (including current account exports
and imports of services) is included in the deficit. The
Djiboutian franc is tied to the US dollar.
Much of the trade is done with Ethiopia, but the full
extent of the exchange is not visible in the official
figures. A large part of the trade with the Somali
outbreak state Somaliland is also not visible in the
statistics. The figures for exports can give a somewhat
misleading picture since such a large proportion (80 per
cent) is re-export of various goods.
FACTS - FINANCE
GDP per person
US $ 2,050 (2018)
Total GDP
US $ 1 966 million (2018)
GDP growth
6.0 percent (2018)
Agriculture's share of GDP
2.3 percent (2018)
Manufacturing industry's share of GDP
4.4 percent (2018)
The service sector's share of GDP
71.7 percent (2018)
Inflation
2.2 percent (2019)
Government debt's share of GDP
48.0 percent (2018)
External debt
US $ 2,057 million (2017)
Currency
Djiboutian Franc
Merchandise exports
US $ 142 million (2017)
Imports
US $ 768 million (2017)
Current account
- US $ 294 million (2017)
Commodity trade's share of GDP
49 percent (2018)
Main export goods
re-export of goods, livestock, hides and skins
Largest trading partner
Ethiopia, Saudi Arabia, China, United Arab Emirates
(2016)
2005
April
President Guelleh re-elected
President Ismael Omar Guelleh from the Issa-dominated RPP is the only
candidate in the presidential election and is elected for a second six-year
term.
|