- The country’s strategic geographical location is its most attractive investment feature – on a coast where the Far East, Persian Gulf, Africa and Europe are at crossroads.
- It is easy for investors to do business with Djibouti; the government is efficient with high levels of transparency and accountability.
- Djibouti’s currency is stable, freely convertible, and pegged to the US dollar.
- The government offers significant tax reductions to foreign investors.
- Djibouti has launched free economic zones, aimed at incentivizing industrial development.
- Public investments are targeted at energy, transport (ports and railways), and water services to boost business activities in the country.
- There are strong regional links between Djibouti and Ethiopia, as seen by the development of a 550km oil pipeline and construction of a train to connect Ethiopia to its main port.
- Djibouti’s government wants to leverage its strategic location and deep-water harbor to become the logistics and commercial hub for East Africa.
- The service sector is the largest contributor to Djibouti’s GDP, fueled by public and private investment into transport and energy infrastructure. A gas pipeline is currently being built between Djibouti and Ethiopia, due for completion in 2019.
- Djibouti’s industry is driven by the construction and energy sectors, buoyed by public investments. Mining and manufacturing have a low contribution to GDP.
- Djibouti’s agricultural sector contributes 3% to GDP, but the government has been able to attract grant financing to develop fishing, livestock and horticulture.
- The country has announced a series of infrastructure developments, including improving drinking water, building airports, a wind farm, a solar power plant, and a geothermal power plant, with the support of foreign investors.
- China has contributed USD 200M to construct the Obock International Airport, which will improve the country’s business environment.
- China recently opened its first military base on the African continent in Djibouti, adding to the existing military bases in the country – US, UK, France and Japan (its only base outside Japan). Saudi Arabia is currently building a base there as well. Now that Eritrea has opened its borders to Ethiopia, Djibouti is no longer Ethiopia’s sole port and may suffer economically as a consequence.
South Korean Alignment
- South Korea has deep expertise in metals, machinery and textiles; and these are three of the sectors that Djibouti may develop into next, according to their product space map.
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