In light of Djibouti’s fortuitous positioning between East Africa and the Middle East, and on a key trade route between Asia and Europe, the country has long played a central role in regional trading. Increasingly, however, it is looking to parlay that lineage into an even greater role, expanding infrastructural capac-ity and linkages to ensure the small 800,000-person nation is able to act as a prominent gateway to the fast-growing markets surrounding it.
PROJECTS: More than $14bn worth of new airports, pipelines, port and terminal facilities, and roads and railways are under construction, underwritten by several vast public and foreign investment schemes. Whilst some new transport infrastructure will service passenger travel to and from the country – such as the two new airports under construction – the bulk of the projects will be developed to suit different types of cargo, such as minerals, energy products, bulk and containerised goods, and even livestock.
Many of the new investments are looking to lever-age the country’s role as the primary entry point to the 95m-person Ethiopian market next door, with Djibouti currently handling more than 90% of goods bound for its neighbour. Ethiopia’s economy expanded by more than 8.5% in 2014/15 and is expected to grow 8% in 2015/16, according to the IMF. This will create a driv-ing demand for imports, of which the vast majority are channelled through Djibouti’s ports and trans-ported on its roads. Forecasts for robust growth in Ethiopia in the medium term bode well for Djibouti, with increases in Ethiopia’s exports also set to boost outbound traffic and revenue from Customs duties.