Economic growth at its best
Deprived of natural resources, Djibouti is banking on its exceptional geostrategic location. According to a World Bank report, despite a difficult international environment due to the health crisis of 2020, with growth rates nearing the bottom, Djibouti will see a strong rebound in growth in 2023 (7%). The country has the advantage of being located on one of the world's densest maritime corridors, controlling access to the Red Sea. The country has therefore embarked on ambitious port infrastructure projects. The new deep-water port of Doraleh is now one of the most efficient in the region. Despite the disruption to shipping in the Red Sea, transshipment activity at the port of Djibouti was on the rise in March 2024, with a 39% increase in the volume of containers handled. The rail link between Djibouti and Addis Ababa, which had been out of service since 2010 and reopened in January 2018, is making a major contribution to this growth. Djibouti dreams of becoming a global air-sea freight hub, an African freight hub. In January 2021, the signing of a tripartite agreement between Ethiopian Airlines, Air Djibouti and the Port of Djibouti will underpin this ambition. The entry into service of the Djibouti International Free Zone (2018), the mineral port of Goubet (2017) and the port of Tadjourah (2017), extended by the road corridor linking Balho, the border post with Ethiopia, reinforce the overall picture. With around 30% of the world's merchant ships passing through Djibouti's waters, the country has no trouble attracting foreign investors in the transport and logistics sectors.
A fifth mandate
"Internal peace and good governance": these are the prerequisites for political action, in the words of Mr. Ismaïl Omar Guelleh, President of the Republic of Djibouti, since 1999. Re-elected in 2016, with 86.68% of the vote in the first round, Ismaïl Omar Guelleh has not let up. His economic and diplomatic record seems satisfactory, but there is still much to be achieved on the social front (particularly in terms of housing and employment, with the unemployment rate still unable to fall below 50% and 70% among the under-30s). Within the opposition, calls for a boycott are multiplying, and the attacks carried out by the armed group FRUD on various sites in Tadjourah, in the north-east of the country, in January 2021, have only served to further dampen the mood. No opposition candidate will be presented. Ismaïl Omar Guelleh was re-elected in April 2021 with 98.58% of the vote.
An unstable region
Somalia, Sudan, Yemen, Ethiopia, Eritrea... Djibouti is at the heart of an arc of crisis stretching from the Sahel to the Middle East. The country plays the stability card, in a perilous diplomatic game with its direct neighbors. In the conflict that has raged in Yemen since 2015, Djibouti lends its political support to the Saudi-led coalition. The country is home to more than 70,000 refugees and asylum-seekers from the Horn of Africa (UNHCR 2023), thousands of whom are Ethiopians who transit Djibouti on foot every year in an attempt to reach Saudi Arabia through war-torn Yemen. The Strait of Bab el-Mandeb, which separates Djibouti from Yemen, is trafficked by migrants and refugees in both directions. Djibouti's ties with Ethiopia are based on mutual economic and development interests, but peace between Ethiopia and Eritrea could pose a threat to Djibouti's economic prosperity and the use of its port infrastructure. Against this backdrop, Djibouti has also been seeking to normalize its relations with Eritrea for some years now. But the region was once again destabilized in 2024, with the announcement of the maritime agreement between Ethiopia and the self-proclaimed republic of Somaliland on January1, 2024. Addis Ababa's battle for direct access to the Red Sea caused considerable turbulence. As Somaliland was not recognized as an independent state by the international community, Somalia saw its sovereignty trampled underfoot. A dangerous military escalation ensued between Ethiopia and Somalia. A cold war begins.
In the middle, Djibouti, a small country with high strategic value, is like the eye of the storm, a land of peace and mediation at the heart of a tormented region.
The electrical challenge
The commissioning of the electricity interconnection line with Ethiopia in May 2011 - the idea for the project was born in 1985! - radically changed the situation, considerably reducing the bill. But Ethiopia, which obtains 95% of its electricity from hydroelectric dams, is also experiencing an energy crisis that is having repercussions on the electricity supply of its neighbors. Severe droughts affecting water levels have led to production shortfalls and rationing phases, even prompting Ethiopia to suspend exports. In view of Djibouti's growing domestic demand, the country is keen to secure a domestic source of production. Geothermal and wind power could be favored, as one of Djibouti's ambitions is to operate with "100% green" energy. At the very least, this would be a good way to offset the energy deficit. Djibouti is due to inaugurate its very first wind farm in 2023 (387 hectares - the equivalent of 700 soccer pitches), in the Ghoubet region. As for geothermal energy production, everything remains to be done. The project to build a 30 MW photovoltaic solar power plant in the Grand Bara desert, initially supported by the French group Engie, then by the Emirati company Amea Power since 2023, should contribute to greater energy independence.
Water, a national priority
Djibouti's water resources are among the poorest in the world, and come mainly from volcanic aquifers. Growing demand for water has led to intensive exploitation of these underground resources, which are overexploited and now threatened by saline intrusion. Their overall level and quality have plummeted. Repeated droughts, population growth and the development of water-intensive infrastructures have exacerbated the situation. The Ministry of Hydraulics and the Office National de l'Eau et de l'Assainissement de Djibouti (ONEAD) have made the development of the water sector a national priority. Several large-scale projects have been launched, including the construction of a drinking water pipeline between Ethiopia and Djibouti, and the construction of a desalination plant in Doraleh, which should eventually cover 60% of the Djibouti capital's needs. However, access to sanitation remains below 30% outside the capital, and despite efforts to protect the population from thirst, water remains a key issue for Djibouti. The country is already on the list of the twenty countries most affected by water shortages, in a world where water resources are becoming increasingly scarce. Against this backdrop, the European Union and Agence Française de Développement (AFD) have pledged 40 million euros, alongside the Djibouti Ministry of Economy and Finance in charge of Industry, to improve access to water and sanitation in Djibouti. This agreement is part of the Team Europe initiative "Clean and prosperous Djibouti by 2027".
