WT/TPR/G/430 /Rev.1  
21 April  2023 
(23-2850) Page: 1/16 
Trade Policy Review Body  Original: French  
 
  
TRADE POLICY REVIEW  
REPORT OF  DJIBOUTI  
Revision  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex  3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Djibouti 
is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  3 
2   ECONOMIC AND SOCIAL ENVIRONMENT  ................................ ................................ ..... 3 
2.1   Key macroeconomic indicators  ................................ ................................ ......................  3 
2.2   Impact of COVID -19 on the national economy  ................................ ................................ . 4 
2.3   Medium -term macroeconomic outlook  ................................ ................................ ............  4 
2.4   Trends in foreign trade  ................................ ................................ ................................ . 5 
2.5   Social indicators  ................................ ................................ ................................ ..........  5 
3   NATIONAL DEVELOPMENT POLICIES  ................................ ................................ ...........  6 
3.1   Vision 2035  ................................ ................................ ................................ ................  6 
3.2   Five-year development plans  ................................ ................................ ........................  6 
3.3   National Trade Development Strategy  ................................ ................................ ............  7 
3.4   National strategy for the implementation of the AfCFTA  ................................ ....................  7 
4   OVERVIEW OF MAIN GROWTH SECTORS  ................................ ................................ ..... 7 
4.1   Primary sector: fisheries and livestock farming  ................................ ................................  7 
4.1.1    Fisheries  ................................ ................................ ................................ ..................  7 
4.1.2    Livestock farming  ................................ ................................ ................................ ..... 7 
4.2   Renewable energy  ................................ ................................ ................................ ....... 8 
4.3   Transport and logistics  ................................ ................................ ................................ . 8 
4.4   New information technologies  ................................ ................................ ...................... 10 
4.5   Tourism  ................................ ................................ ................................ ..................... 10 
5   INVESTMENT REGIME AND BUSINESS CLIMATE  ................................ ........................  11 
5.1   Investment policy  ................................ ................................ ................................ .......11 
5.2   Improvement of the business climate  ................................ ................................ ............ 12 
6   TRADE POLICY DEVELOPMENTS  ................................ ................................ ................  12 
6.1   General framework  ................................ ................................ ................................ .....12 
6.2   The multilateral trading system  ................................ ................................ .................... 13 
6.3   Regional and bilateral trade agreements  ................................ ................................ ........ 14 
6.3.1    African Continental Free Trade Area (AfCFTA) ................................ .............................. 14 
6.3.2    Tripartite Free Trade Area (TFTA)  ................................ ................................ .............. 14 
6.3.3    Common Market for Eastern and Southern Africa (COMESA)  ................................ ......... 14 
6.3.4    Intergovernmental Author ity on Development (IGAD)  ................................ .................. 15 
6.3.5    Bilateral trade agreements  ................................ ................................ ........................ 15 
7   CONCLUSIONS ................................ ................................ ................................ ...........  15 
 
  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 1  INTRODUCTION  
1.1.  The Republic of Djibouti is a State in the Horn of Africa, located on the Red Sea and bordered 
to the north by Eritrea, to the north -west, west and south by Ethiopia, and to the south -east by 
Somalia. The territory is delimited by 370 kilometres of coastli ne, the population is estimated to be 
1 million and the country has no natural resources.  
1.2.  The country has been a Member of the World Trade Organization (WTO) since 31  May 1995 
and, on 16 December 1994, it became a GATT contracting party , which it had appli ed de facto  since 
18 November 1960. The Republic of Djibouti recognizes the pivotal role played by the WTO in 
managing and safeguarding an open, rules -based multilateral trading system designed to encourage 
economic development and human well -being. The Go vernment of Djibouti reiterates that the 
monitoring of national trade policies through the Trade Policy Review Mechanism is a fundamental 
feature of the WTO's work, and transparency is essential to the effectiveness of the multilateral 
trading system.  
1.3.  The Republic of Djibouti has already conducted its first and second trade policy reviews, in 
2006 and 2014, respectively. This third trade policy review of the Republic of Djibouti is particularly 
important given the developments and other reforms undertaken i n the field of trade and 
trade -related policies.  
1.4.  This review takes place during a turbulent period, with the COVID -19 pandemic continuing to 
have a prolonged impact on the world's economies, particularly on small fragile countries  such as 
Djibouti, which is already suffering the consequences of conflict and instability in the East African 
region and the effects of recurrent drought.  
1.5.  Djibouti's trade policy is enshrined in Vision 2035, a strategic long -term development document 
supplemented by the five -year development plans, the Accelerated Growth and Employment 
Promotion Strategy (SCAPE) for 2015 -19 and the National Development Plan for 2020 –24, which 
were adopted in 2014 and 2021.  
1.6.  In recent years, the country has continued to cont ribute to the work of the Secretariat s of the 
Common Market for Eastern and Southern Africa (COMESA), of the Agreement Establishing the 
African Continental Free Trade Area (AfCFTA)  and of the Tripartite Free Trade Area (TFTA) , as well 
as the Intergovernmen tal Authority on Development (IGAD). Djibouti continues to participate in the 
various WTO Agreements and is pursuing its trade liberalization programme at the bilateral and 
regional levels with a view to promoting trade and investment.  
1.7.  The Republic of Djib outi aims to achieve all its trade policy goals while ensuring economic 
growth and sustainable development , and striving for better social inclusion of the population. The 
purpose of this report is to provide a broad overview of how Djibouti's trade policy  is formulated and 
to highlight the country's current and future trade policy priorities.  
2  ECONOMIC AND SOCIAL ENVIRONMENT  
2.1  Key macroeconomic indicators  
2.1.  Over the past two decades, the Republic of Djibouti has achieved good economic and financial 
results , driven mainly by trade and foreign direct investment  (FDI) . 
2.2.  Djibouti's gross domestic product (GDP) grew by almost 5% between 2000 and 2009, and by 
between 5 % and 7% between 2010 and 2019, driven by structural investments in transport, 
telecommunications and water supply infrastructure. The GDP growth rate accelerated to an average 
of almost 6% over the period 2016 –19, before declining to 1.2% in 2020 owing to the COVID -19 
health crisis.  
2.3.  Over the past five years, the country has been able to maintain a relatively controlled general 
level of consumer prices (1.7% on average), except in 2019, when inflation reached  3.3% as a result 
of rising food prices.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 2.4.  In the area of public finance, State expenditure rose sharply over the period 2016 –20, in 
particular current expenditure, while capital investment remained almost unchanged. In terms of 
total revenue, mobilized resources (domestic revenue and grants) grew at a slower pace than public 
expendit ure over the same period.  
2.5.  Following back -to-back deficits in 2016 and 2017, the current account balance improved, with 
surpluses of around 14% of GDP between 2018 and 2020, mainly as a result of  an improvement in 
the balance of services and income , and an increase in unrequited transfers.  
2.6.  Major investment projects in the field of basic infrastructure (transport chain, water supply, 
energy, etc.) have been implemented in recent years thanks to significant loans from development 
partners. The external public debt ratio as a percentage of GDP rose sharply from 50% in 2015 to 
over 71% in 2020.  The return on th e investment and the other measures adopted have helped keep 
the long -term impact of the debt  under control . 
2.2  Impact of COVID -19 on the national economy  
2.7.  The COVID -19 pandemic  has had significant repercussions for the health situation and 
continues to have a negative impact on Djibouti's economic and financial outlook.  The global and 
regional recession, coupled with a decline in FDI and the uncertai nties related to the political and 
security situation in Ethiopia1, have had a negative impact on the national economy, which is largely 
dependent on transport and logistics services.  
2.8.  In 2020, GDP growth fell to 1.2% in real terms, against projected growt h of 6.6% before the 
outbreak of the COVID -19 pandemic. The sectors most affected by the decline in value added are 
construction and public works, air, sea and road transport, general trade, tourism, hotels and 
restaurants.  
2.9.  The general level of consumer pr ices saw annual growth of  0.3% by December 2020. As a 
result of the lockdown, some food prices have risen because of the risk of shortages due to 
disruptions in the supply chain and heavy precautionary stockpiling by households.  
2.10.   The fiscal position deterio rated in 2020 owing to a decline in budgetary revenues and an 
unexpected increase in current expenditure. COVID -19 expenditure2 has had a significant impact on 
the government's cash flow. Tax revenue shortfalls amounted to more than 1.2% of GDP and 
govern ment expenditure increased by 0.8% as a percentage of  GDP. The decline in tax revenues is 
due to the cessation of activities in the economic sectors affected by lockdown measures and to 
delays in the payment of taxes. By the end of 2020, COVID -19-related e xpenditure reached 2.5% 
of GDP  and capital investment shrank by 0.9% of GDP.  
2.11.   A decline in the balance of services related to foreign trade and logistics, a deterioration in 
the current transfers balance and the cessation of travel and tourism activities in  2020 contributed 
to a deterioration in the current account balance compared  to 2019. FDI also fell relative to 
pre-COVID projections as most of the basic infrastructure projects  were completed . 
2.12.   International reserves rose to 5.4 months of import  cover  in 2020. External debt increased 
from 67.8% of GDP in 2019 to 71% of GDP in 2020, taking into account the balance -of-payments 
financing needs as a result of  the health pandemic and economic and social support measures.  
2.3  Medium -term macroeconomic outl ook 
2.13.   GDP rebounded slightly in 2021, with estimated real growth of 4.8% as a result of the 
economic recovery triggered by the reopening of borders. The services sector (shipping, 
telecommunications and banking) and construction are expected to be the main d rivers of this 
medium -term growth, which is projected to average nearly 5%.  
 
1 Ethiopia is the country's main trading partner, with over 90% of its trade passing through Djibouti's 
ports.  
2 Health spending and relief and emergency expenditure for households and businesses.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 2.14.   The general level of consumer prices increased to 2.5% in 2021 as a result of global 
inflationary pressures, particularly on food and hydrocarbons, and disruptions in supply chains  
related to the lingering effects of COVID -19. 
2.15.   Preliminary data for 2021 point to a budget deficit of 3.2% of GDP, owing to, in particular, a 
decline in non -tax revenues and grant funding. The cessation of business activities during lockdown 
and the diffic ulties encountered by the sectors affected by the coronavirus pandemic led to a drop 
in the turnover of economic operators, the basis for calculating taxes and other fiscal charges.  
2.16.   The current account is expected to show a surplus of DJF 4 billion in 2021 , having recorded a 
surplus of DJF 64 billion in 2020. The level of international reserves is expected to drop to 4.6  months 
of import  cover  in 2021.  
2.4  Trends in foreign trade  
2.17.   With regard to international trade, the bulk of Djibouti's merchandise exports are  in fact 
re-exports of products, particularly agricultural products from Ethiopia. Data on exports of goods are 
drawn from the balance -of-payments figures compiled by the Central Bank of Djibouti (BCD).  
2.18.   In terms of imports of goods, the main products impor ted by the country over the 
period  2016–20, apart from khat, which accounted for nearly 7% of total imports, were food and 
beverages (23.2%), followed by miscellaneous machinery and electrical appliances (20.7%), 
vehicles and transport equipment (12.9%), h ydrocarbons and their derivatives (10.8%), 
chemicals  (7.4%), plastics (6.4%), electrical energy, and textiles and footwear (4.8% , respectively ). 
2.19.   The share of food and beverages has increased over the past five years to almost a quarter 
of total imports, gi ven the virtual non -existence of local production and the heavy dependence on 
the outside world to meet domestic needs for these products. The shares of machinery and transport 
equipment  in imports  fell over the same period as most of the basic infrastruct ure projects 
(ports,  railway, etc.)  were completed . 
2.20.   According to data from the Yearbook of Foreign Trade Statistics of the National Institute of 
Statistics of Djibouti  (INSD) , in 2020, Djibouti's main trading partner was, once again, Ethiopia, 
which accoun ted for nearly 15% of the total value of goods imports. The Republic of Djibouti's other 
main trading partners in terms of values are, in descending order, the United Arab Emirates  (10.5%), 
China (9.2%), Türkiye (5.3%), Saudi Arabia (4.6%), France (3.1%), India (2.5%) and the 
United  States of America (1.6%).  
2.21.   Regarding trade in services, the country recorded surplus balances over the period 2016 –20 
mainly in government services, transport and communications. The surplus balance of government 
services re flects the consumption expenditure of the various foreign military contingents, embassies 
and international organizations based in Djibouti and contributes to almost half of the structure of 
trade in services. Transport services, especially maritime transport, generate significant surpluses 
because of the important role played by Djibouti's ports as exit points for Ethiopia's trade. The 
communications services' surplus , which shrank in 2020, accounts for 17% of the balance of 
services.  
2.5  Social indicators  
2.22.   The Rep ublic of Djibouti is characterized by social indicators below the standards of 
lower -middle -income countries. With a Human Development Index of 0.524 in 2019, the country 
falls into the "low human development" category and ranks 166th out of a total of 189 ranked 
countries.  
2.23.   Income poverty3 affects 17% of the population according to data from the 2017  Djibouti 
Household Survey  – Social Indicators (EDAM -IS) and is more prevalent in the inland regions (45%) 
than in the capital (13.6%).  
 
3 This refers to the population living below the internation al poverty line of USD 1.90 in 2017.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 2.24.   Progress  has been made  in improving access to education . The Government has adopted 
initiatives to improve teaching quality and the alignment of training and employment . 
2.25.   The national health system has been improved through the introduction of health -relate d 
social security coverage in Djibouti City and the  regions in the country's interior . 
2.26.   With a dual labour market consisting of the public sector and the informal sector, 
unemployment is a major concern, affecting 47% of the working population, mainly women  and 
young people . A national employment strategy has been launched by the Government , with the 
participation of the private sector, to support young people in the area of entrepreneurship . 
3  NATIONAL DEVELOPMENT POLICIES  
3.1  Vision 2035  
3.1.  In 2014, the Republic of  Djibouti adopted a long -term strategic vision entitled "Vision 2035", 
which aims to transform the country into a regional and international economic, commercial and 
financial hub, ensuring the well -being of the population in a safe and clean environment. This 
strategic framework for national development policy is based on five main pillars: national peace 
and unity, good governance, a diversified and competitive economy, the consolidation of human 
capital and regional integration.  
3.2.  The main strategic object ives of Vision 2035 are to cultivate trade and services integration in 
the subregion, build a regional economic, commercial and financial centre, forge community 
regulation mechanisms and strengthen the national strategy for international cooperation. Visi on 
2035 advocates greater openness of the country to the outside world, more active participation in 
world trade and integration into regional (IGAD, COMESA) and continental economic communities 
to promote and accelerate economic diversification.  
3.2  Five-year development plans  
3.3.  In 2015, to complement Vision 2035, the Government of Djibouti approved an initial five -year 
plan, namely the Accelerated Growth and Employment Promotion Strategy (SCAPE) for 2015 -19. 
The key objectives of SCAPE  were to accelerate the rate of growth, modernize the foundations of 
the economy, affirm the role of the private sector, promote employment and reduce social and 
territorial disparities.  
3.4.  The main pillar  of SCAPE  is economic growth, competitiveness and the leading r ole of the 
private sector. International trade and regional integration are defined as a major strategic focus of 
SCAPE . The second pillar is human capital development (education, health, employability and social 
inclusion) and combating  poverty and vulner ability (women's empowerment, gender equality, 
housing). The third pillar is improving governance issues (political, judicial, economic, financial) and 
institutional capacities (modernization of public administration, decentralization). The fourth pillar  of 
the Strategy is urban and territorial development and the environment.  
3.5.  More recently, in early 2022, the Government of Djibouti officially launched the National 
Development Plan for 2020 –24, entitled " Djibouti ICI ". This new reference framework for 
devel opment policies is structured around three central pillars : inclusion, connectivity and 
institutional reforms. The main objectives of the Plan are to prioritize the strengthening of trade with 
neighbouring countries through deeper regional integration and a more comprehensive trade policy 
covering services, industry and agriculture.  
3.6.  The first pillar of the Plan is inclusion , which  seeks to improv e the quality of life and well -being 
of the people of Djibouti, reduc e social and spatial inequalities and enhanc e intergenerational gender 
equity. Under connectivity, the second pillar of the Plan, the focus is on expanding trade and market 
access , and opening up to competition in order to create more productive jobs, stimulate economic 
diversification and expedite the structural transformation of Djibouti's service -based economy. The 
third pillar of the Plan, concerning institutions, aims to promote efficient public administration, the 
rule of law, transparency and accountability so that all citizens of Djibouti can  contribute to making 
the country a commercial and logistical hub on the African continent.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 3.3  National Trade Development Strategy  
3.7.  Since 2010, the Republic of Djibouti has had a National Trade Development Strategy  (SNDC) , 
a major focus of which is the develo pment of regional trade. The objectives of the Strategy are to 
contribute to economic and social development, the reduction of poverty, the establishment of a hub 
for regional trade, and the integration of the country's economy into regional economic 
organ izations , such as COMESA , and the multilateral trading system.  
3.8.  The Strategy explicitly addresses trade facilitation and Djibouti's integration into the 
multilateral and regional trading system. The Strategy document emphasizes that strengthening 
trade link s will make it possible to take advantage of the real potential offered by the development 
of intra -community trade , and optimize the country's geostrategic location and its role as a 
transhipment and transit hub.  
3.4  National strategy for the implementation of the AfCFTA  
3.9.  In May 2022 , the country adopted its national strategy for the implementation of the 
African  Continental Free Trade Agreement (AfCFTA), which aims to strengthen the integration of the 
national economy into the single continental market. The na tional continental integration strategy 
sets out specific objectives to increase the country's trade in goods and services with African 
countries and strengthen the diversification of Djibouti's economy by building on the AfCFTA.  
3.10.   The implementation of the AfCFTA will generate positive effects for the Republic of Djibouti 
by strengthening the institutional and regulatory framework governing the production and trade of 
goods and services, improving the competitiveness of export sectors , conquering new continental 
markets, and creating opportunities for economic diversification and employment, particularly for 
women and young people.  
4  OVERVIEW OF MAIN GROWTH SECTORS  
4.1  Primary sector: fisheries and livestock farming  
4.1.1   Fisheries  
4.1.  The Republic of D jibouti has significant fisheries resources, with an estimated exploitable 
potential of over 47,000 tonnes per year , all species  combined . This fishing potential is largely 
underexploited (3,089 tonnes in 2021) because of a lack of means of production, inc luding a limited 
number of vessels, low levels of training among fishers and inadequate fishing techniques.  
4.2.  The country wishes to maintain a model based exclusively on artisanal fishing while 
encouraging the intensification of exploitation with new boats w ith a larger operational radius and 
the testing of new kinds of fisheries, in particular mollusc and crustacean fisheries, by promoting 
aquaculture.  
4.3.  Demand for fish and seafood is growing in the domestic market, with changing eating habits 
and the developm ent of tourism. Significant export opportunities also exist, in particular to Ethiopia, 
the Gulf States and Europe. Partnerships could be developed with private and foreign operators to 
increase the availability and quality of fishery products on the domes tic and export markets.  
4.1.2   Livestock farming  
4.4.  Livestock farming is the main activity for the rural population and contributes significantly to 
the income of rural households, which account for one third of the total population. Livestock farming 
conditions hav e become more difficult in recent years owing to the effects of climate change, 
recurrent droughts and the degradation of soil and pastures.  
4.5.  The country's livestock production covers all the needs of rural people but only part of the 
needs of the urban population. The growing need for animal products (meat and milk) offers good 
business opportunities for livestock farmers. A large number of live animals are exported by 
Djibouti's livestock farmers, especially to the countries of the Arabian Peninsu la. WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 4.6.  The Republic of Djibouti has a regional livestock export centre that helps to improve the income 
of livestock farmers by adding value to animal products and creating jobs. The country plans to build 
a dedicated livestock export terminal in the new port  of Damerjog with a modern quarantine centre 
and animal assembly area.  
4.2  Renewable energy  
4.7.  Until 2011, most of Djibouti's electricity was generated by diesel power plants, the fuel for 
which had to be imported, with a total capacity of 60 megawatts  (MW) . This  thermal production was 
not sufficient to cover the exponential growth in demand for electricity driven by major structural 
investment projects (ports, free zones, hotels, etc.) and the establishment of new foreign military 
bases.  
4.8.  In 2011, to secure electr icity supplies and reduce the energy deficit, the country completed the 
interconnection of its electricity grid with Ethiopia, which meets more than 80% of the electricity 
demand with clean energy. In response to increasing demand in Djibouti, industrial d evelopment 
and the construction of railway lines between Djibouti and Ethiopia, a second transmission line will 
soon be launched to increase the country's supply of clean, cheaper electricity by 30%.  
4.9.  The Government of Djibouti also plans to develop renewab le energy sources, in particular 
geothermal energy , as an important part of the energy policy. Geothermal, wind and solar energy, 
which are thought to have considerable potential, should gradually supplement the current 
production of thermal power stations  and energy imports via the interconnection with Ethiopia.  
4.10.   In terms of investments, the Ghoubet wind farm project , with a capacity of 60 MW, has been 
completed and will be operational by the end of 2022. The Grand Bara photovoltaic project is 
expected to p rovide a total generation capacity of 30 MW through the installation of solar panels. 
The geothermal exploration project in the Lake Assal region should eventually lead to the 
construction of a geothermal power plant with a maximum capacity of 50 MW. 
4.3  Trans port and logistics  
4.11.   In terms of infrastructure, since the early 2000s the Republic of Djibouti has invested heavily 
in the development of six new hub ports to meet the strong demand from the Ethiopian market and 
position itself on the regional and continent al transhipment market (Box 4.1).  
4.12.   At present, the port facilities have an overall handling capacity of 1.5 million twenty -foot 
equivalent units (TEU) for containers, 10.5 million metric tonnes for general goods and 
11 million  metric  tonnes for bulk cargo. The country has undertaken major reforms to improve the 
business climate and attract international and regional investors, with the aim of developing 
transport and port infrastructure through the Djibouti Ports and Free Zones Authority ( DPFZA ). 
Box 4.1 Infrastructure for better integration into regional and continental markets  
The port sector has been strengthened in recent years with the ports of Doraleh, Tadjourah, 
Ghoubet and Damerjog, at an estimated overall cost of more than DJF 85 billion:  
1. The port complex at Doraleh (Doraleh Multipurpose Port), which opened in May 2017, and 
the Société djiboutienne de gestion de terminal vraquier (SDTV) are able to handle up to 
8.2 million tonnes of bulk cargo an d more than 200,000 containers per year.  
2. Horizon Djibouti Terminals Limited (HDTL) has an overall storage capacity of 
371,000  metric  tonnes of petroleum and gas products.  
3.  The Société de gestion du terminal à conteneurs de Doraleh (SGTD) has a termin al with 
handling capacity of 1.2  million  TEU per year.  
4.  Tadjourah port was opened in June 2017 for exports of products and imports of all kinds of 
goods and raw materials needed for industry.  
5.  Ghoubet port, a new mineral terminal that also opened in  June 2017, capable of 
accommodating vessels of up to 100,000 tonnes deadweight (DWT) and handling exports 
of 5 million  tonnes of salt per year.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 6.  Construction of Damerjog port began in August 2018. It is designed to handle and store 
petroleum products a nd export livestock to the Gulf States. In addition to the port, there 
will be an industrial free zone covering an area of 2.5 km2. 
Source:  Extract from the National Development Plan, 2021.  
4.13.   The first, 240 -hectare phase of the Djibouti International Free Trade Zone (DIFTZ) for industry 
and commerce was launched in July 2018 to allow continental and international companies to set up 
processing units in order to add value to products, rather than focusing on the import and export of 
raw ma terials. The country intends to develop what will eventually be the largest special economic 
zone in Africa, covering an area of 48.2  km2, with an attractive incentive scheme4 for industrial and 
commercial enterprises.  
4.14.   A new 756 -kilometre railway connecti ng Djibouti's ports to Addis Ababa was opened in 2017 
to help reduce congestion  on roads used to  transport goods and hydrocarbons. Railway  services 
should substantially reduce the shipping time between Djibouti's port facilities and the Ethiopian 
capital, and allow 900 containers to be transported per day at full capacity. The railway could 
eventually supply around half of Ethiopia's foreign trade and compete with international road 
corridors, which are currently served by almost 1,000 lorries per day trave lling between Djibouti and 
Addis Ababa.  
4.15.   With the construction of the Tadjourah -Balho north corridor and the Djibouti -Loyada route, 
the road sector has strengthened economic ties and connections with Ethiopia, Somalia and, by 
extension, neighbouring landloc ked countries in the Great Lakes region, allowing transportation of 
cattle, agricultural products, miscellaneous goods and people. Improvements to the intercity road 
network will increase business and employment opportunities in rural regions, especially i n the 
agricultural, fisheries, mining and tourism sectors.  
4.16.   The airline, Air Djibouti , was relaunched in 2015 to complement the network of ports, roads 
and railways and expand the different forms of logistical infrastructure connecting the countries in 
the region. Ethiopian Airlines recently joined forces with Air Djibouti to launch a multimodal sea -air 
shipping service to handle freight arriving from China by sea and distribute it by air from Djibouti 
airport to different parts of the African continent.  
4.17.   A new centralized system, the Djibouti Port Community System (DPCS), was set up in  2018 
to provide a complete range of online services to the international community and reduce the length 
and cost of administrative procedures. This system streamlines, manages  and automates port and 
logistical processes through a single data submission, connecting transport and logistics chains.  
4.18.   In an effort to create synergies, improve productivity and reduce the cost of the services 
offered, all port, airport and road (intern ational corridors only) activities have been brought under 
the control of the DPFZA . 
4.19.   In late  2020, the customs service's ASYCUDA WORLD programme  was interconnected with 
the DPCS , which is overseen by the Djibouti Ports and Free Zones Authority . 
4.20.   The Container Port  Performance  Index  20215, published by the World Bank in May  2022, 
ranked  the port of  Djibouti first in the  region of s ub-Saharan Africa and nineteenth in the world, 
after taking sixty -first place the year before . 
4.21.   Djibouti's geostrategic loc ation on the New Silk Road allows the country to position itself on 
a bustling trade route and benefit from the positive effects of Chinese investment in strategic 
infrastructure projects. In addition to ports and railways, the construction of a gas pipeli ne is being 
planned to carry Ethiopian gas from a liquefaction plant and export terminal to Damerjog.  
 
4 The scheme will allow 100% foreign ownership, free repatriation of capital and profits, and exemption 
from corporate and income tax.  
5 The Container Port Performance Index (CPPI) is based on total port hours per ship call. WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 4.22.   To diversify its transport and logistics services, Djibouti intends to establish an industrial 
estate around the future port of Damerjog , and to set up a new business district and ship repair yard 
inside the historic port of Djibouti.  
4.4  New information technologies  
4.23.   Vision 2035 gives priority to the development of new information and communication 
technologies (ICTs) as a springboard for the digital transforma tion of Djibouti's economy. The aim 
is to bridge the digital divide at the national level and foster the development of an ICT -oriented 
activity hub at the regional and international levels.  
4.24.   To this end, the Republic of Djibouti recently created the Minist ry for the Digital Economy and 
Innovation to prepare the reforms (cost saving, appropriate taxation, data protection and combating 
cybercrime, etc.) necessary for digital transformation in all sectors of industry and to encourage the 
emergence of new trade s and innovative sectors, such as e -commerce and related activities.  
4.25.   The Multisectoral Regulatory Authority (telecommunications, ICTs, renewable and 
non-renewable energy, and gas) was established in February 2020 to oversee and monitor the 
sectors concerne d and promote market competition.  
4.26.   The telecommunications sector received substantial investment throughout the 
decade  2010-20 to develop modern infrastructure and increase accessibility for the people  of 
Djibouti. Internet usage is relatively high in Djibo uti compared to other African countries, while 
mobile penetration remains low, especially in semi -urban and rural areas.  
4.27.   In recent years, the country has seen significant progress in data and connectivity at the 
regional level, thanks to a dense network of  submarine cables. Djibouti is currently connected to 
nine submarine optical fibre cables, making it a regional telecommunications hub. More recently, the 
national operator, Djibouti Télécom, together with a consortium of East African telecom operators, 
launched a new regional system of submarine cables called "DARE1" (Djibouti Africa Regional 
Express), connecting Somalia and Kenya in order to provide fibre -optic services.  
4.28.   The Republic of Djibouti  could leverage its geostrategic location to position itself as a digital 
hub in the region, particularly for data centres. In 2013, the country launched the Djibouti Data 
Centre, a tier 3 centre majority -owned by Djibouti Télécom, to centralize incoming data connections 
in a single location and redirect them within  Africa and to Asia and Europe. The Data Centre 
complements the Djibouti Internet Exchange (DjIX), which is comprised of 16 members, including 
major regional players, such as MTN and Telkom SA, and international content distribution network 
providers.  
4.29.   The announced opening of state -owned Djibouti Télécom to private investors will improve 
service efficiency and quality and reduce the costs of telecommunications services, which are 
currently high in relation to comparable countries in the COMESA region.  
4.30.   Within the context of regional integration, ICTs will allow Djibouti to exploit fully its digital 
potential, create skilled job opportunities, build national expertise and facilitate access to regional 
and continental markets. African businesses would be attrac ted by the developed 
telecommunications infrastructure and a large skilled workforce.  
4.31.   The forthcoming liberalization of the telecommunications sector in Djibouti, the development 
of the telecommunications network at the regional and international levels, and the emergence of 
numerous employment opportunities for young people in offshoring will reinforce the country's 
privileged position as a regional and continental connectivity nexus.  
4.5  Tourism  
4.32.   The tourism industry in Djibouti is mostly in its infancy and remains under -exploited, 
accounting for less than 3% of GDP. The tourism sector is an important enabler of economic growth 
and may have knock -on effects on other economic activities, such as transport, agri -food, 
handicrafts and p rofessional services.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 4.33.   However, the country has relatively modern hotels and they are constantly growing in 
number, with around 2,200 beds in 2021. Foreigners' hotel stays are mostly related to logistics and 
transport activities (45% of all international vi sitors), leisure tourism and the operations of foreign 
military bases.  
4.34.   Current hotel capacity will be expanded substantially after the signing in late 2020 of a 
partnership agreement with French group Accor for the renovation and construction of three hote l 
complexes in the capital, and a management agreement in September 2021 for the construction of 
the luxury 150 -room Fairmont hotel.  
4.35.   Given the wealth of unique attractions (geological landscapes and a rich cultural and 
archaeological heritage) and unspoile d marine environment, the tourism sector boasts genuine 
advantages and major development potential. A more diversified range of tourist products, in 
combination with other countries in the subregion, will attract a larger number of international and 
region al visitors.  
4.36.   According to Vision 2035, the Republic of Djibouti aspires to position itself as a top regional 
tourist destination, based on a three -area model: (i)  the capital area (business and leisure tourism); 
(ii) the beach area (beach resorts and scuba  diving facilities on priority development sites); and 
(iii) an eco -friendly area (adventure tourism at archaeological and prehistoric sites).  
4.37.   A law on strategic guidance for developing and promoting tourism was passed in April  2019 
and the Master Plan for  Sustainable Tourism Development in Djibouti (2019 -24) has been prepared. 
The main pillars of the Plan are the promotion of sustainable tourism, planning and development of 
tourist attractions, structuring tourism product offerings and development of human  resources. The 
targets set for the tourism sector are to increase the number of tourists to 267,000 per year by 
2024, employ 5,000 people and attract more than DJF  120 billion in private investment.  
4.38.   The development of road and airport infrastructure, bett er access to water and electricity, 
and improved waste management are considered to be essential catalysts for opportunities in the 
tourism value chain. Training skilled and unskilled staff in the tourism and hospitality sector, 
promoting the country's exc eptional tourist attractions and improving air connectivity will attract 
more tourists and create numerous jobs for women and young people.  
5  INVESTMENT REGIME AND BUSINESS CLIMATE  
5.1  Investment policy  
5.1.  The Republic of Djibouti has a liberal economy that promote s the freedom of investment of all 
natural and legal persons, whether Djiboutian or foreign, subject to the legal and regulatory 
provisions governing their activities.  
5.2.  The Djibouti Investment Code was adopted in 1984 and underwent a major review in 1994. 
The Code is currently under  review, particular ly with regard to  the treatment and protection of 
investments and the obligations of foreign investors in the country.  
5.3.  In 2013, the country conducted its first investment policy review with the aim of improving the 
business climate for private developers and attracting foreign investment, thereby ensuring greater 
diversification of an economy heavily reliant on the tertiary sector.  
5.4.  A result of this investment policy review, a number of recommendations were produc ed for 
improving the business environment, strengthening human capital and infrastructure, and better 
targeting to attract investors to key sectors.  
5.5.  Furthermore, the Republic of Djibouti recently drew up the Djibouti SDG Investor Map, which 
can be used by private investors in eight sectors6 with significant potential to advance the 
Sustainable Development Goals (SDGs) in line with government policies and national development 
needs. The SDG investment platform provides data, information and insights on inve stment 
 
6 The eight priority sectors identified in the SDG Investor Map are transportation, services, renewable 
and alternative energy, finance, ICTs, infrastructure, food and beverages, and health.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 opportunities with the potential to have a positive impact on sustainable development and help 
improve the allocation of financial resources from private investors.  
5.2  Improvement of the business climate  
5.6.  The Republic of Djibouti has made significant pr ogress on reforms to improve the business 
climate in recent years.  Djibouti was ranked 154th out of 190 world economies in the 2018 report 
and 172nd in the 2012 report. The country moved up a remarkable 55 places to 99th position in 2019 
and has featured a mong the top 20 of the world's most reforming economies for the past three  years.  
5.7.  The principal reforms undertaken by the public authorities to improve the business environment 
covered the following areas:  
• starting a business: creation of a one-stop shop, simplification of procedures, roll -out of 
the integrated information system and introduction of a single payment system;  
• dealing with construction permits: simplification of procedures, reduced delays and 
implementation of decennial liabil ity for architectural firms;  
• getting electricity: reduced prices and improved information for consumers;  
• registering property: reduced registration fees and duties, digitized land titles and 
development of a geographical information system;  
• getting credit: establishment of an improved credit registry  and a movable collateral  
registr y; 
• protecting minority investors: disclosure of transactions with interested parties, extended 
access to corporate information and increasing shareholders' rights ; 
• paying  taxes: establishment of a national advisory commission to resolve disputes 
between taxpayers and the national tax authorities;  
• trading across borders: preparation of the pilot phase of the single window for foreign 
trade;  
• enforcing contracts : strengthening of the legal framework for the enforcement of contracts 
and adoption of a new Code of Civil Procedure;  
• resolving insolvency: strengthening of the legal framework for insolvency resolution.  
6  TRADE POLICY DEVELOPMENTS  
6.1  General framework  
6.1.  In view of its geostrategic position, Djibouti's trade policy remains strongly focused on the 
development of regional, continental and multilateral trade. The main objective behind the trade 
policy falls under pillars 3 (a diversified and competitive economy, d riven by the private sector) and 
5 (regional integration and international cooperation) of Vision 2035.  
6.2.  Pillar 3 of Vision 2035 centres on pursuing strong and sustainable growth driven by the 
exploitation of existing opportunities in various key sectors (t ransport and logistics, ICTs, financial 
services, fisheries and tourism) and boosting exports of goods and services. The goal of pillar  5 is 
for the country to play an active role in regional economic integration as part of IGAD, COMESA and 
AfCFTA, and in trade with partners in the subregion.  
6.3.  The objective of Djibouti's trade policy is to contribute to economic and social development, 
the reduction of poverty and unemployment, the establishment of a regional trade platform, and 
greater economic integration into regional markets and the multilateral trading system. The National 
Development Plan strengthens the priorities of regional integration and breaking into the COMESA 
and AfCFTA markets (Box 6.1).  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 Box 6.1 Priorities for regional integration and breaking into the COMESA and AfCFTA 
markets  
1. Strengthen national institutions by:  
• Adopting a trade policy to ensure consistency between commitments at the bilateral, 
regional, continental and multilateral levels  
• Adopting an aid -for-trade strategy that builds on the Diagnostic Trade Integration Study 
(DTIS) and implements various agreements  
• Adopting a road map for effective participation in the work programme of trade and 
regional integration organizations  
2. Step up reforms to support regional integration and market penetration by:  
• Adopting and implementing a policy on the regulation of the goods and services market 
which prioritizes transparency, competition, consumer protection and fraud prevention  
• Creating a platform for public and private sector dialogue on regional integration  
• Pursuing a strategy for participation in value chains of goods and services  
• Developing an information portal, complete with a networking and experience shar ing 
platform  
• Reforming the regulatory framework for public and private sector dialogue, with the 
involvement of foreign stakeholders  
3. Reinforce the management of trade commitments at the bilateral, subregional and 
multilateral levels by:  
• Ensuring com mitments are effectively honoured and met in order to ensure Djibouti's 
trade integration within IGAD, COMESA and AfCFTA  
• Bolstering political and diplomatic representation in COMESA, IGAD and AfCFTA 
structures  
• Enhancing international and economic coope ration services  
Source:  Extract from the National Development Plan, 2021.  
6.2  The multilateral trading system  
6.4.  Djibouti remains firmly committed to a multilateral trading system based on clearly defined 
WTO rules which safeguard the interests of developing cou ntries and ensure that world trade is 
conducted in an orderly manner.  
6.5.  Djibouti has been an original Member of the WTO since 31 May 1995 and a GATT contracting 
party since 16 December 1994. On 5 March 2018, the country accepted the 2014 Protocol of 
Amendmen t to insert the Trade Facilitation Agreement into Annex 1A of the WTO Agreement. 
Djibouti has been part of the group co -sponsoring the Joint Statement on Investment Facilitation for 
Development since 10 December 2021. The country is a member of several WTO  trade negotiation 
groups (the ACP7 Group of States, the African Group, the Group of Least Developed Countries (LDCs) 
and the G908). 
6.6.  The Republic of Djibouti took part in the Twelfth Ministerial Conference  (MC12) , which was held 
in Geneva from 12  to 15 June 2022 and proved a success with the adoption of historic packages of 
decisions . Djibouti supported the Ministerial Statement  of the African Group , the ACP and LDCs on 
the various draft MC12 declaration s. 
 
7 African, Caribbean and Pacific States.  
8 G90: African Gro up, ACP States and LDCs.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 6.3  Regional and bilateral trade agreements  
6.7.  The Republic of Djibouti intends to pursue its efforts to further open the country to trade and 
step up its involvement in forming regional economic blocs that are more competitive in world trade. 
In order to consolidate its geo strategic position, the country has joined several regional blocs, 
including COMESA, AfCFTA and IGAD. The aim of the regional integration policy is to further diversify 
the production of goods and services, accelerate economic growth, and reduce poverty an d 
unemployment.  
6.3.1   African Continental Free Trade Area (AfCFTA)  
6.8.  The African Continental Free Trade Area (AfCFTA) was established in 2018 by all eight African 
regional economic communities, bringing together 54 of the continent's 5 5 States , the exception 
being  Eritrea. The AfCFTA Agreement entered into force in early 2021 to enable African countries to 
stimulate economic growth, speed up industrialization and support the sustainable and inclusive 
development of the continent, in line with the 2030 Agenda adopte d by the General Assembly of the 
United Nations and Agenda 2063 of the African Union.  
6.9.  The Republic of Djibouti signed the historic AfCFTA Agreement on 21 March 2018 at the 
African  Union summit in Rwanda and deposited its instrument of ratification in Febru ary 2019, at 
the thirty -second session of the Assembly of Heads of State and Government. The country recently 
approved a national strategy for the implementation of the Agreement and prepared a programming 
framework for priority activities over a three -year period.  
6.3.2   Tripartite Free Trade Area (TFTA)  
6.10.   The purpose of the TFTA is to create a customs union between three regional economic 
communities in eastern and southern Africa, namely COMESA, the East African Community (EAC) 
and the Southern African Developmen t Community (SADC). The TFTA is a constituent element of 
the AfCFTA and its aim is to gradually reduce the tariffs for all goods traded within the bloc. The 
TFTA comprises 53% of African Union member States, accounts for 60% of the continent's GDP and 
has a combined population of 800 million people.  
6.11.   The Republic of Djibouti signed  the TFTA Agreement in Egypt in 2015 and takes part in 
technical working group meetings. Negotiations are still under way on rules of origin, trade remedies 
and tariffs. The tripar tite working group initially prioritized the signature, ratification and 
implementation of the TFTA Agreement, before moving on to negotiations on trade in services, 
completion policy, intellectual property rights, trade and development cooperation, and cr oss-border 
investment.  
6.3.3   Common Market for Eastern and Southern Africa (COMESA)  
6.12.   The Preferential Trade Area (PTA) for Eastern and Southern African States was originally set 
up 1981, before becoming the Common Market for Eastern and Southern Africa (COMESA) i n 1994, 
with the aim of promoting regional integration through trade and the development of natural and 
human resource for the benefit of member countries.  
6.13.   Djibouti is a founding member of COMESA, the largest market for trade and investment in 
Africa, whic h currently comprises 21 countries in eastern and southern Africa9, with a population of 
nearly 600 million people. In recent years, COMESA has pursued reforms in the areas of trade 
liberalization and facilitation, customs management, transport facilitati on, and support for the 
agricultural, industrial and energy sectors. Discussions on the liberalization of priority sectors are 
still ongoing within COMESA.  Djibouti has concluded negotiations on the schedule  of commitments 
in the four priority sectors for trade in services ( transport, communication , tourism and finance ) 
published in the COMESA gazette. The country is taking part  in negotiations on  the three additional 
sectors (energy, professional s ervices and construction).  
 
9 Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, 
Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia 
and Zimbabwe.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 6.3.4   Interg overnmental Authority on Development (IGAD)10 
6.14.   Founded in 1986, the Intergovernmental Authority on Drought and Development (IGADD) 
was transformed in 1995 and its scope was expanded to cover economic cooperation and regional 
integration matters. IGAD is pri marily involved in the promotion of food security, environmental 
management and the development of intra -regional trade and infrastructure.  
6.15.   The Republic of Djibouti is home to  IGAD's  headquarters and maintains a solid strategic 
partnership with neighbourin g countries in the subregion with a view to achieving the organization's 
development objectives, which are geared towards promoting peace, prosperity and regional 
integration. In this vein, the country is developing key infrastructure to bolster economic i ntegration 
and trade with IGAD members.  
6.3.5   Bilateral trade agreements  
6.16.   The Republic of Djibouti views bilateral trade agreements as a means of achieving a high 
degree of liberalization more rapidly, which would facilitate access to partner countries' markets. 
Djibouti has signed several bilateral trade agreements with its neighbouring countries (Ethiopia, 
Kenya and South Sudan) and countries on the Arabian Peninsula (United Arab Emirates, Kuwait and 
Yemen).  
7  CONCLUSIONS  
7.1.  The Republic of Djibouti firmly believes i n the importance of the trade policy review process of 
WTO Member States, which helps foster transparency and understanding of their trade policies and 
practices. It is pleased to have carried out this third Trade Policy Review and would like to thank the 
WTO Secretariat for its invaluable support.  
7.2.  The third Trade Policy Review of Djibouti, which is taking place under difficult global 
circumstances, has shown the vigour of Djibouti's economic expansion and the resilience of its 
economy to numerous external shocks. The country has undertaken major economic and social 
reforms and invested massively in infrastructure to accelerate economic growth, create jobs in key 
sectors and reduce poverty levels among the population.  
7.3.  In recent years, Djibouti's authorities have largely helped boost trade and deepen regional 
integration with partner countries to maximize benefits for the relevant populations. Accordingly, 
the Republic of Djibouti will maintain an open trade regime conducive to economic activity and trade 
with its partners. It will continue to pursue policies that promote the regional and international 
integration of its economy and help improve the transparency of its trade policies and practices.  
  
 
10 IGAD bring s together seven East African countries: Djibouti, Ethiopia, Kenya, Somalia, South Sudan, 
Sudan and Uganda. Eritrea joined the organization in 1993 but suspended its membership in 2007.  WT/TPR/G/430 /Rev.1  • Djibouti  
 
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 List of Acronyms  
ACP African, Caribbean and Pacific Group of States  
AfCFTA  African Continental Free Trade Area  
AU African Union  
BCD Central Bank of Djibouti  
COMESA  Common Market for Eastern and Southern Africa  
DARE  Djibouti Africa Regional Express  
DB Doing Business  
DIFTZ  Djibouti International Free Trade Zone  
DJF Djibouti francs  
DjIX Djibouti Internet Exchange  
DPCS  Djibouti Port Community System  
DPFZA  Djibouti Ports and Free Zones Authority  
DTIS Diagnostic Trade Integration Study  
DWT Deadweight tonnage  
EAC East African Community  
EDAM -IS Djibouti Household Survey - Social Indicators  
GATT  General Agreement on Tariffs and Trade  
GDP Gross Domestic Product  
HDTL  Horizon Djibouti Terminal Limited  
ICT Information and communication technology  
IGAD  Intergovernmental Authority on Development  
INSD National Institute of Statistics of Djibouti  
LDC Least Developed Country  
PND National Development Plan  
SADC  Southern African Development Community  
SCAPE  Accelerated Growth and Employment Creation Strategy  
SDG Sustainable Development Goal  
SGTD  Société de gestion du terminal à conteneurs de Doraleh  
SNDC  National Trade Development Strategy  
TFTA Tripartite Free Trade Area  
USD United States dollars  
WTO World Trade Organization  
 
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