Over the past ten years, the Republic of Djibouti has undergone a remarkable transformation, leveraging its strategic location at the Bab el-Mandeb Strait to drive robust economic growth, ambitious infrastructure projects, and greater regional influence. As the country celebrates a decade of progress, experts and citizens alike reflect on the achievements and challenges that define this new era.
Economic growth anchored by ports
Djibouti’s economy has nearly doubled in size over the last decade, with GDP rising from $768 million in 2006 to $1.6 billion by 2014, and maintaining annual growth rates of 5–7% since then. This surge has been powered by large-scale public investment, especially in the construction, transport, and logistics sectors. The expansion of the Doraleh Multipurpose Port and the new Damerjog livestock terminal have solidified Djibouti’s status as a regional trade gateway, handling about 15% of global maritime traffic and serving as a vital outlet for landlocked Ethiopia.
Infrastructure and diversification: Major infrastructure projects have reshaped Djibouti’s landscape and economic prospects:
Ports and logistics: Upgrades to the Doraleh Container Terminal, Tadjourah (ores), and Ghoubet (salt) terminals have diversified the port ecosystem and boosted throughput.
Energy and water: A 550-km pipeline to Ethiopia, new storage facilities, and investments in solar and wind farms are moving Djibouti toward 100% renewable electricity. Desalination plants and pipelines have improved water security for hundreds of thousands.
Connectivity: Airport upgrades and a modernized Djibouti-Addis Ababa railway have enhanced regional integration and trade efficiency.
The government’s Vision 2035 strategy aims to further diversify the economy, targeting renewable energy, tourism, and digital innovation. Free zones like the Djibouti Free Trade Zone (DIFTZ) and the upcoming Damerjog Industrial Free Zone are attracting international companies and fostering light manufacturing and value-added industries.
Social development and challenges
Djibouti has launched several programs to promote socio-economic inclusion, such as microfinance, health assistance, and food security initiatives. Health and education indicators have improved, though the focus is now shifting from access to quality. Despite these gains, unemployment remains high (around 48%), and about 42% of the population still lives in extreme poverty. The government is prioritizing support for small and medium-sized enterprises (SMEs) and investing in human capital to address these persistent issues.
Geopolitical and strategic significance
Djibouti’s strategic location has attracted major international military bases from the United States, China, France, and Japan, reinforcing its geopolitical importance. This presence brings economic opportunities and security dividends but also exposes the country to the complexities of global power competition.
The Guelleh era: Stability and vision
President Ismaïl Omar Guelleh, in power since 1999, is widely credited as the architect of Djibouti’s modern progress. Under his leadership, the country has experienced political stability, economic modernization, and increased regional influence. Guelleh’s administration has pursued policies to diversify the economy, improve the investment climate, and modernize bureaucracy. While critics point to authoritarian tendencies, his legacy as a peacemaker and visionary is recognized both domestically and internationally.
Looking Ahead
Future port projects and industrial zones are set to deepen Djibouti’s role as a trade and logistics hub, fostering industrialization and economic diversification. The government’s Vision 2035 emphasizes sustained, inclusive growth, human capital development, and energy transition.
Summary Table: Djibouti’s Progress (2015–2025)
Area | Progress Made |
Economic Growth | GDP doubled, 5–7% annual growth, increased FDI, regulatory reforms |
Infrastructure | Major port, energy, water, and airport projects; expanded trade capacity |
Social Development | Improved health/education, new social protection, focus on SMEs and inclusion |
Geopolitical Role | Hosts multiple international military bases, rising as a maritime hub |
Ongoing Challenges | High unemployment and poverty, need for diversification and social protection |
As Djibouti continues to invest in its strategic advantages, the next decade will be pivotal in ensuring that economic gains translate into widespread social improvement, securing its place as a key economic gateway for Africa.
Written by: Salim Abdullahi Elmi: Diplomat and researcher