According to countryaah, the economy is mainly based on the transit trade at the international port of the capital and on the service sector associated with it. For example, most of Ethiopia’s exports go via Djibouti. In addition, there is also significant income from French and US military bases.
From the beginning of the 1980s and some way into the 00s, the country’s economic growth did not keep pace with its population growth, which resulted in GDP per capita falling and that dependence on foreign aid, earlier mainly from France but later also from, for example. Kuwait, the US and Saudi Arabia, became more and more evident. In the latter half of the 1990s, annual growth figures averaged up to 5 percent, but dependence on foreign aid remained.
Very little of the land area (about 1 percent) can be cultivated. Primarily, vegetables and dates are produced, and agriculture is able to produce only 3 percent of the food needs. The agricultural sector employs about 75 percent of the workforce. Attempts are made to conduct irrigation using underground sources. More than half of the rural population feed on nomadic livestock management (goats, sheep, camels). Djibouti suffers from periodic drought, and in 1984 the country was hit by severe drought with famine as a result. In 1987, on the contrary, a flood occurred, which destroyed parts of the capital Djibouti and made 150,000 people homeless. Even since the beginning of the 1990s, the country has been hit by drought repeatedly.
The industry (mining, manufacturing and construction industry) is limited to a few small-scale groups, and almost all consumer goods must be imported.
Djibouti has a large trade deficit. Exports mainly consist of livestock, hides, skins and coffee and other products that are re-exported, while imports consist of consumer goods, food and beverages (eg bottled water), oil and machinery. The majority of exports go to Somalia, while the main importing countries are China, Saudi Arabia and India.