Djibouti shares border with Ethiopia
Economy
Djibouti's economy is largely concentrated in the service sector. Commercial activities revolve around the country's free trade policies and strategic location as a Red Sea transit point. Due to limited rainfall, vegetables and fruits are the principal production crops, and other food items require importation. The GDP (purchasing power parity) in 2013 was estimated at $2.505 billion, with a real growth rate of 5% annually. Per capita income is around $2,874 (PPP). The services sector constituted around 79.7% of the GDP, followed by industry at 17.3%, and agriculture at 3%.As of 2013, the container terminal at the Port of Djibouti handles the bulk of the nation's trade. About 70% of the seaport's activity consists of imports to and exports from neighboring Ethiopia, which depends on the harbour as its main maritime outlet. As of 2018, 95% of Ethiopian transit cargo was handled by the Port of Djibouti. The port also serves as an international refueling center and transshipment hub. In 2012, the Djiboutian government in collaboration with DP World started construction of the Doraleh Container Terminal, a third major seaport intended to further develop the national transit capacity. A $396 million project, it has the capacity to accommodate 1.5 million twenty foot container units annually.Djibouti was ranked the 177th safest investment destination in the world in the March 2011 Euromoney Country Risk rankings. To improve the environment for direct foreign investment, the Djibouti authorities in conjunction with various non-profit organizations have launched a number of development projects aimed at highlighting the country's commercial potential. The government has also introduced new private sector policies targeting high interest and inflation rates, including relaxing the tax burden on enterprises and allowing exemptions on consumption tax.
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