The country of Djibouti is located on the east coast of Africa at the point where the Red Sea and the Gulf of Aden come together. It has been self-governing since 1977.


Djibouti’s economy is greatly directed in the service sector. Commercial activities revolve around the country’s free trade policies and strategic location as a Red Sea transit point. Since there’s limited rainfall, vegetables and fruits are the main production crops, and other food items need importation. The GDP (purchasing power parity) in 2013 was approximated at $2.505 billion, with a real growth rate of 5% annually. Per capita income is around $2,874 (PPP). The services sector established around 79.7% of the GDP, followed by production at 17.3%, and agriculture at 3%.


Djibouti’s gross domestic product increased by an average of more than 6 percent per year, from US$341 million in 1985 to US$1.5 billion in 2015. The Djiboutian franc is the currency of Djibouti. It is issued by the Central Bank of Djibouti, the country’s financial authority. Since the Djiboutian franc is pegged to the U.S. dollar, it is normally balanced and inflation is not a problem. This has contributed to the developing interest in investment in the country.


Money transfer services, which hold a strategic place in the country’s financial system, have expanded following the arrival of an international money transfer network onto the market. Djibouti’s financial sector grew rapidly from 2006. On the back of a rise in both capital investment and transport activity, Djibouti’s banking sector has seen a major expansion in its recent years. The most visible change has been the growing number in the market, which has led to an increase in competitiveness, and the expansion of products and services targeting local clients.


Djibouti’s banking sector, which features both Islamic and conventional banks, has grown significantly in recent years and saw the arrival of new banks bringing the number of institutions to 11, compared with only two in 2006. The sector remains highly profitable with a low level of nonperforming loans (approximately 6 percent). Even so, the sector remains very concentrated, with two main banks accounting for 85% of assets. Under newly enacted directives, all public and private sector employees earning more than FDJ 40,000 are required to hold a current account in banking institutions; a move which has led to an important increase in bank deposits.