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Eritrea vs. Djibouti

Economy

EritreaDjibouti
Economy - overview

Since formal independence from Ethiopia in 1993, Eritrea has faced many economic problems, including lack of financial resources and chronic drought. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice. Like the economies of many African nations, a large share of the population - nearly 80% in Eritrea - is engaged in subsistence agriculture, but the sector only produces a small share of the country's total output. Mining accounts for the lion's share of output.

The government has strictly controlled the use of foreign currency by limiting access and availability; new regulations in 2013 aimed at relaxing currency controls have had little economic effect. Few large private enterprises exist in Eritrea and most operate in conjunction with government partners, including a number of large international mining ventures, which began production in 2013. In late 2015, the Government of Eritrea introduced a new currency, retaining the name nakfa, and restricted the amount of hard currency individuals could withdraw from banks per month. The changeover has resulted in exchange fluctuations and the scarcity of hard currency available in the market.

While reliable statistics on Eritrea are difficult to obtain, erratic rainfall and the large percentage of the labor force tied up in military service continue to interfere with agricultural production and economic development. Eritrea's harvests generally cannot meet the food needs of the country without supplemental grain purchases. Copper, potash, and gold production are likely to continue to drive limited economic growth and government revenue over the next few years, but military spending will continue to compete with development and investment plans.

Djibouti's economy is based on service activities connected with the country's strategic location as a deepwater port on the Red Sea. Three-fourths of Djibouti's inhabitants live in the capital city; the remainder are mostly nomadic herders. Scant rainfall and less than 4% arable land limits crop production to small quantities of fruits and vegetables, and most food must be imported.

Djibouti provides services as both a transit port for the region and an international transshipment and refueling center. Imports, exports, and reexports represent 70% of port activity at Djibouti's container terminal. Reexports consist primarily of coffee from landlocked neighbor Ethiopia. Djibouti has few natural resources and little industry. The nation is, therefore, heavily dependent on foreign assistance to support its balance of payments and to finance development projects. An official unemployment rate of nearly 40% - with youth unemployment near 80% - continues to be a major problem. Inflation was a modest 3% in 2014-2017, due to low international food prices and a decline in electricity tariffs.

Djibouti's reliance on diesel-generated electricity and imported food and water leave average consumers vulnerable to global price shocks, though in mid-2015 Djibouti passed new legislation to liberalize the energy sector. The government has emphasized infrastructure development for transportation and energy and Djibouti - with the help of foreign partners, particularly China - has begun to increase and modernize its port capacity. In 2017, Djibouti opened two of the largest projects in its history, the Doraleh Port and Djibouti-Addis Ababa Railway, funded by China as part of the "Belt and Road Initiative," which will increase the country's ability to capitalize on its strategic location.

GDP (purchasing power parity)$9.702 billion (2017 est.)

$8.953 billion (2016 est.)

$8.791 billion (2015 est.)

note: data are in 2017 dollars
$5.388 billion (2019 est.)

$4.999 billion (2018 est.)

$4.612 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate5% (2017 est.)

1.9% (2016 est.)

2.6% (2015 est.)
6.7% (2017 est.)

6.5% (2016 est.)

6.5% (2015 est.)
GDP - per capita (PPP)$1,600 (2017 est.)

$1,500 (2016 est.)

$1,500 (2015 est.)

note: data are in 2017 dollars
$5,535 (2019 est.)

$5,214 (2018 est.)

$4,885 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 11.7% (2017 est.)

industry: 29.6% (2017 est.)

services: 58.7% (2017 est.)
agriculture: 2.4% (2017 est.)

industry: 17.3% (2017 est.)

services: 80.2% (2017 est.)
Population below poverty line50% (2004 est.)21.1% (2017 est.)
Household income or consumption by percentage sharelowest 10%: NA

highest 10%: NA
lowest 10%: 2.4%

highest 10%: 30.9% (2002)
Inflation rate (consumer prices)9% (2017 est.)

9% (2016 est.)
0.7% (2017 est.)

2.7% (2016 est.)
Labor force2.71 million (2017 est.)294,600 (2012)
Labor force - by occupationagriculture: 80%

industry: 20% (2004 est.)
agriculture: NA

industry: NA

services: NA
Unemployment rate5.8% (2017 est.)

10% (2016 est.)
40% (2017 est.)

60% (2014 est.)
Budgetrevenues: 2.029 billion (2017 est.)

expenditures: 2.601 billion (2017 est.)
revenues: 717 million (2017 est.)

expenditures: 899.2 million (2017 est.)
Industriesfood processing, beverages, clothing and textiles, light manufacturing, salt, cementconstruction, agricultural processing, shipping
Industrial production growth rate5.4% (2017 est.)2.7% (2017 est.)
Agriculture - productssorghum, milk, vegetables, barley, cereals, pulses nes, roots/tubers nes, wheat, millet, beefvegetables, milk, beef, camel milk, lemons, limes, goat meat, mutton, beans, tomatoes
Exports$624.3 million (2017 est.)

$485.4 million (2016 est.)
$139.9 million (2017 est.)
Exports - commoditiesgold and other minerals, livestock, sorghum, textiles, food, small industry manufacturesvarious animals, chlorides, dried legumes, industrial fatty acids/oils, coffee, chickpeas (2019)
Exports - partnersChina 62%, South Korea 28.3% (2017)Saudi Arabia 42%, India 15%, China 14%, Egypt 5%, South Korea 5% (2019)
Imports$1.127 billion (2017 est.)

$1.048 billion (2016 est.)
$726.4 million (2017 est.)

$705.2 million (2016 est.)
Imports - commoditiesmachinery, petroleum products, food, manufactured goodsrefined petroleum, fertilizers, iron sheeting, cars, palm oil (2019)
Imports - partnersUAE 14.5%, China 13.2%, Saudi Arabia 13.2%, Italy 12.9%, Turkey 5.6%, South Africa 4.6% (2017)China 43%, United Arab Emirates 15%, India 7%, Turkey 5% (2019)
Debt - external$792.7 million (31 December 2017 est.)

$875.6 million (31 December 2016 est.)
$1.954 billion (31 December 2017 est.)

$1.519 billion (31 December 2016 est.)
Exchange ratesnakfa (ERN) per US dollar -

15.38 (2017 est.)

15.375 (2016 est.)

15.375 (2015 est.)

15.375 (2014 est.)

15.375 (2013 est.)
Djiboutian francs (DJF) per US dollar -

177.7 (2017 est.)

177.72 (2016 est.)

177.72 (2015 est.)

177.72 (2014 est.)

177.72 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt131.2% of GDP (2017 est.)

132.8% of GDP (2016 est.)
31.8% of GDP (2017 est.)

33.7% of GDP (2016 est.)
Reserves of foreign exchange and gold$236.7 million (31 December 2017 est.)

$218.4 million (31 December 2016 est.)
$547.7 million (31 December 2017 est.)

$398.5 million (31 December 2016 est.)
Current Account Balance-$137 million (2017 est.)

-$105 million (2016 est.)
-$280 million (2017 est.)

-$178 million (2016 est.)
GDP (official exchange rate)$5.813 billion (2017 est.)$3.323 billion (2019 est.)
Ease of Doing Business Index scoresOverall score: 21.6 (2020)

Starting a Business score: 52.9 (2020)

Trading score: 0 (2020)

Enforcement score: 55.9 (2020)
Overall score: 60.5 (2020)

Starting a Business score: 84.3 (2020)

Trading score: 59.4 (2020)

Enforcement score: 48.4 (2020)
Taxes and other revenues34.9% (of GDP) (2017 est.)35.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-9.8% (of GDP) (2017 est.)-9% (of GDP) (2017 est.)
GDP - composition, by end usehousehold consumption: 80.9% (2017 est.)

government consumption: 24.3% (2017 est.)

investment in fixed capital: 6.4% (2017 est.)

investment in inventories: 0.1% (2017 est.)

exports of goods and services: 10.9% (2017 est.)

imports of goods and services: -22.5% (2017 est.)
household consumption: 56.5% (2017 est.)

government consumption: 29.2% (2017 est.)

investment in fixed capital: 41.8% (2017 est.)

investment in inventories: 0.3% (2017 est.)

exports of goods and services: 38.6% (2017 est.)

imports of goods and services: -66.4% (2017 est.)
Gross national saving5.5% of GDP (2017 est.)

6% of GDP (2016 est.)

6.8% of GDP (2015 est.)
25.6% of GDP (2018 est.)

25.6% of GDP (2017 est.)

19% of GDP (2015 est.)

Source: CIA Factbook