Djibouti

Created in 1977, Djibouti came under the authoritarian, one-party regime of Hassan Gouled APTIDON, who stayed in power until 1999. Composed of the Afars and Issas, the country experienced a civil war due to a conflict among the Afars; the war ended in 2001, after a peace accord was finalized between the government, which was mostly Issa, and the Afar rebels. The country’s first multi-party presidential elections brought to power Ismail Omar GUELLEH, who was reelected for a second term in 2005. An essential transshipment location for the east African highlands, Djibouti wants close connections with France and is the only country in Sub-Saharan Africa to have a U.S. military base.

Main Airports

Djibouti (JIB)

U.S. Embassy

Villa Plateau du Serpent, Blvd. Marechal Joffre (Boite Postal 185), Djibouti
tel. 253 35-39-95

Statistics

GDP: purchasing power parity:

$619 million (2002 est.)

GDP - real growth rate:

3.5% (2002 est.)

GDP - per capita: purchasing power parity:

1,300 (2002 est.)

Inflation rate (consumer prices):

2% (2002 est.)

Labor force:

282,000 (2000)

Exports:

$250 million f.o.b. (2004 est.)

Exports - partners:

Somalia 55.3%, Yemen 19.6%, Ethiopia 17.9% (2005)

Imports:

$987 million f.o.b. (2004 est.)

Imports - partners:

Saudi Arabia 23.4%, India 12.4%, China 10.9%, Ethiopia 5.2%, France 4.9%, US 4.7%, Japan 4.5%, Indonesia 4.1% (2005)

Population:

486,530 (July 2006 est.)

Population growth rate:

2.02% (2006 est.)

Population Below Poverty Line:

50% (2001 est.)

Major Industries:

construction, agricultural processing

Employing Workers: 125*

Registering Property: 137*

Enforcing Contracts: 169*

Closing a Business: 122*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Djibouti	Region
Procedures (number)	11	10.3
Time (days)	37	40.9

Djibouti Risk Assessment

Country Rating

Rating: C

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behaviour. Corporate default probability is high.

Risk Assessment

Djibouti posted strong economic growth in 2007, driven by public and foreign investment in port infrastructure and the construction sector. That dynamism should gain momentum in 2008 thanks to the continuing efforts to ease the congestion in the Port of Djibouti and the development of the new Doraleh oil complex. The growth will nonetheless not suffice to meet the Millennium Development Goals. In this context, most of the rural population — vulnerable to weather conditions — remains dependent on international food aid. The existing currency board foreign exchange regime, meanwhile, with the Djibouti franc pegged to the dollar since 1973, has allowed the country to limit inflation.

Despite favourable economic conditions, the imbalance in public sector accounts has persisted. A lack of progress on fiscal policy has moreover prompted the IMF to oppose since 2005 an extension of the Poverty Reduction and Growth Facility. The growth of capital goods imports needed for investments has, meanwhile, continued to widen the external deficit. The high proportion of exports involving re-export business from Ethiopia or Somalia reflects the lack of diversification of the productive fabric and the great dependency of the economy on spending by foreign troops stationed in Djibouti.

The legislative elections in January this year should confirm the pre-eminence of the president Ishmael Omar Guelleh and his coalition, the Union for the Presidential Majority, in the local and national political scene. Regional instability could, however, jeopardise that shaky national equilibrium. A severe deterioration of the security and political situation in Somalia with repercussions throughout the Horn of Africa constitutes indeed an appreciable risk. It could have a significant impact on Djibouti's economy, which is largely dependent on regional trade.

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