Djibouti country profile
Djibouti is the 8th smallest country in Africa. Although small in size, it has proved of great strategic importance, not least since it represents an outpost of military bases: USA, France, Japan and more recently China, for example.
It is located in East Africa more specifically in the "Horn of Africa" region, bordering Eritrea to the north, Ethiopia to the west and south (the main gateway for its giant neighbour to the Red Sea ), and with Somalia to the southeast, lies the red sea and gulf of aden.
Its population is mainly Muslim (about 95%), reaching almost 1 million inhabitants. The most spoken language is Somali, though the official languages are Arabic and French.
It was the last of the French colonies (former French Somalia) to gain independence in 1977, and during the 1990s it was devastated by an armed conflict which ended only in 2000 when the stalemate that had been settling, resulted in a power-sharing agreement.
This tiny African nation serves as a gateway to the Suez Canal, one of the world's busiest shipping routes. Its port is the lifeblood of its economy, providing the largest source of income and employment in this otherwise barren country.
Djibouti's proximity to restive areas in Africa and the Middle East and its relative stability have made it a prized location for foreign military bases and ensured a steady flow of foreign assistance.
Former colonial power France maintains a significant military presence. The country also hosts America's largest military base in Africa, China's first overseas military base and Japan's first military base since the Second World War.
Current President, Ismaël Omar Guelleh, has been tightening his grip on power since 1999 and will not face any serious threats to his position.
Economic growth will remain buoyed by fixed investment in the short-term, but by 2019 the key infrastructure projects reach completion, GDP growth will slow sharply. While capital projects and higher oil prices will keep the bill large, this will be offset by higher service exports on the back of new re-export handling capacity.
In 2018, Djibouti's growth will likely continue to be driven by substantial investment, particularly in transport and public services, and the economic fruits of recently completed projects. With its strategic geographic location and deep-water port, the country intends to become a hub for intermodal transport in East Africa. Port of Doraleh - officially inaugurated in June 2017 - is set to help strengthen Djibouti's trading position in 2018.
Despite robust economic growth in recent years, poverty and unemployment remain endemic.
Furthermore, Djibouti is exposed to a slowdown in trade flows in the region - especially in Ethiopia, which uses Djibouti for 95% of its imports. The unstable security and political environment in Somalia, Eritrea, and Yemen further exposures Djibouti to this slowdown risk. Economic slowdown in China, which finances most of the country's investment projects, may also impact Djibouti's growth.