Djibouti is one of the smallest countries in Africa. It covers an area of 23,200 square kilometers and is home to a population of about 864,617 (2011). As in other small states, the size of Djibouti’s economy limits its ability to diversify production and increases its reliance on foreign markets, making it more vulnerable to external market downturns and hampering access to external capital. With less than 1,000 square kilometers of arable land (0.04 percent of the country’s total land area) and an average annual rainfall of only 130 millimeters, Djibouti depends completely on imports to meet its food needs.
Strategically located at the southern entrance to the Red Sea, Djibouti forms a bridge between the Middle East and Africa. The country is adjacent to some of the world’s busiest shipping lanes. Djibouti hosts military bases for France, the United States, Japan, and the North Atlantic Treaty Organization (NATO), as well as other foreign forces that are located in the country to support anti-piracy efforts.
Djibouti’s economy is currently driven by the country’s state-of-the-art port complex, which is among the most sophisticated in the world. Trade through Djibouti’s port is expected to grow rapidly in parallel with the expanding economy of its main trading partner, Ethiopia. In addition, Djibouti is endowed with natural assets for the development of tourism, untapped marine resources that could support growth in artisanal fishing, and a significant infrastructure of undersea telecommunications cables on which it could draw to develop new service industries. Energy trade could also be a source of growth for the country.
Djibouti has enjoyed rapid and sustained growth over the past fifteen years with per capita GDP increasing by 3.1 percent on average per annum in 2001-2017. Despite the growth however, an estimated 16 percent of the population lived below the international poverty line of US$1.90 per day in 2017. The most recent official national extreme poverty rate, calculated using a survey conducted in 2017, stood at 21.1 percent.
Last Updated: Apr 01, 2019