The Republic of Djibouti, located in the Horn of Africa, stands out as an oddball within the region. In recent years, the country has demonstrated significant progress, largely attributed to its port and strategic positioning in the Red Sea.

The consumer goods that you purchase, such as televisions, furniture, or food, may have transited through the port of Djibouti. In a relatively short span of time, the country has emerged as not only one of the most crucial terminals globally but also one of the most efficient in Africa, as indicated by an index established by the World Bank and S&P Global Market Intelligence in 2021 and 2022.

The port and maritime transport sectors serve as the primary economic drivers of Djibouti. In 2023, the country experienced a 6.7% GDP growth, predominantly propelled by port-related activities, according to the World Bank.

Despite the recent volatility in the Red Sea, Djibouti’s economy is anticipated to sustain its growth trajectory. In response to heightened tensions arising from the conflict between Israel and the Hamas, Houthi rebels have launched a series of attacks against merchant vessels crossing the Red Sea. Several major carriers have temporarily suspended or adjusted their operations in the area, including the Danish company Maersk.

Confronted with these escalating tensions, the authorities of Djibouti have bolstered their patrols to safeguard this pivotal maritime hub both commercially and militarily. Several Western nations have established military bases in Djibouti, including France with nearly 1,500 soldiers stationed there, constituting one of the largest French contingents in Africa, as reported by the French Ministry of the Armed Forces. This contingent collaborates with Djiboutian forces to protect the country’s coasts and combat piracy and various illicit trafficking activities, such as drugs and human trafficking.

Despite the recent tensions, Djibouti’s growth prospects remain favorable, with an expected GDP increase of 5.1% between 2024 and 2026, attributed to the expansion of its port facilities.