Government Role in the Economy


The government has concentrated on developing Djibouti as a commercial and service centre., which accounts a major element of GDP. The country's unique geographical location qualifies it for tangible economic progress. The country's neighbors constitute big markets for it.

Since independence, the country has developed the seaport and its telecommunication services. Fish production has increased and a number of companies are engaged in exporting fish to GCC countries and Mauritius.

Djibouti's modernized port, with its transshipment services, combined with Horn of Africa trade, offer the most promising areas of development. The free convertibility of the currency, helps to promote international transactions. Importance has been given to the industrial sector and the government is trying to give a greater role to the private sector. The government is now turning over the ownership of some public projects to the private sector which include the dairy and mineral water factories. Studies are also under way to privatize a number of projects especially in the foodstuff industry so as to meet local demand and make a surplus for export.

With encouragement from the government and funds and technical assistance from abroad, the domestic food supply is increasing and therefore save foreign exchange. With the integrated rural development approach adopted by the government, contributions, from agriculture, fishing, forestry and livestock should reinforce each other and help to diversify the rural economy.

Fish production has increased and number of companies are engaged in exporting fish to GCC countries and Mauritius.

The manufacturing sector; is confined to small-scale establishments producing food, beverages, furniture, dairy products, paper, building materials and bottled gases and water, besides light electromechanical workshops.

The government has encouraged the foreign private sector particularly from Arab countries. Besides, the investment laws ensure investors with maximum benefits, guarantees and incentives.

An economic sector on which the government is now putting great emphasis is tourism. With its large modern airport, Djibouti enjoys excellent air connections with many countries and is thus easily accessible from most parts of the world.

The government's objective is not to develop Djibouti as a primary destination for tourists, but rather as a three or four-day transit point on multi-destination itineraries. The emphasis will be on adventure travel in the rugged hinterland and on luxury accommodation.