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Djibouti, Economy

capital of Ethiopia, animal hides, economic aid, national currency, rail link

Djibouti’s economy revolves around the capital city’s modern seaport, which serves not only Djibouti but landlocked Ethiopia and parts of Somalia as well. The country also relies heavily on economic aid from France and other countries. In 2000 Djibouti’s gross domestic product (GDP), the total value of goods and services produced within a country, was $553 million, or $870 per capita. Services accounted for about 82 percent of GDP, industry made up 14 percent, and agriculture about 4 percent. Estimates indicate that about three-quarters of the labor force works in agriculture. Djibouti’s dry and barren landscape supports little crop farming, but subsistence livestock herding is a significant economic activity. Although the population is mostly urban, many city dwellers periodically tend family livestock herds in rural areas. Estimates suggest that almost half the labor force lacks formal employment.

Lacking significant crop farming, Djibouti must import almost all of its food. Djibouti lacks major industries. The government is the main service sector employer, but port-related services, such as transport, communications, and warehousing, are more important economically. A rail link connects the port to Addis Ababa, the capital of Ethiopia. Djibouti has an international airport, and its telecommunication system is among the best in Africa. Most households, however, lack telephones, televisions, or computers.

The national currency is the Djibouti franc (177.72 Djibouti francs equal U.S.$1, rate fixed since 1973). The country has a strong banking sector. Djibouti’s main exports are animal hides and coffee, but its service activities—related to the port facilities and banking sector—provide most of its earnings. Its main imports are petroleum, food products, and manufactured goods. The country relies entirely on imported oil for its electrical power and other energy needs.



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