Given Djibouti’s economic reliance on international trade and the scarcity of natural resources, manufacturing industries have always played a secondary role in the country’s economic development. However, authorities are now looking to boost their development as a means to cut unemployment and foster more sustained and inclusive economic growth. SECTOR SIZE: In line with many emerging markets in Africa, Djibouti’s manufacturing sector has seen its contribution to GDP trend downwards in recent decades, with a limited share of 3.7% of GDP in 2014 compared to 8.1% in 1977 – a result in this instance of the country’s expanding focus on service activity.
As a result, there are currently just over 30 formal, large-scale, commercial manufacturing enterprises operating in the 850,000-person country, which is equivalent to just over 1% of the total number of companies. The firms are, by and large, focused on the domestic market as opposed to exports, with a number of companies operating in the building mate-rials, beverage and mineral water, industrial gas, and plastic and paper production segments.
As a result, while activity was historically dominated by domestic investors, that is now beginning to change: Djibouti’s National Investment Promotion Agency (Agence Nationale de Promotion des Investissements, NIPA) noted an increased number of international industrial investment projects between 2010 and 2014, corresponding to 32% of the total projects approved by the Code of Investments. As the country continues to liberalise and seeks to expand its role as a gateway to East Africa, manufacturing activities are beginning to benefit.