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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)
$9.402 billion (2017 est.)
$8.953 billion (2016 est.)
$8.791 billion (2015 est.)

note: data are in 2017 dollars

$3.64 billion (2017 est.)
$3.411 billion (2016 est.)
$3.203 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
5% (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

$3,600 (2017 est.)
$3,400 (2016 est.)
$3,300 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 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 line
50% (2004 est.)
23% (2015 est.)

note: percent of population below $1.25 per day at purchasing power parity

Household income or consumption by percentage share
lowest 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 force
2.71 million (2017 est.)
294,600 (2012)
Labor force - by occupation
agriculture: 80%
industry: 20% (2004 est.)
agriculture: NA
industry: NA
services: NA
Unemployment rate
5.8% (2017 est.)
10% (2016 est.)
40% (2017 est.)
60% (2014 est.)
Budget
revenues: 2.029 billion (2017 est.)
expenditures: 2.601 billion (2017 est.)
revenues: 717 million (2017 est.)
expenditures: 899.2 million (2017 est.)
Industries
food processing, beverages, clothing and textiles, light manufacturing, salt, cement
construction, agricultural processing, shipping
Industrial production growth rate
5.4% (2017 est.)
2.7% (2017 est.)
Agriculture - products
sorghum, lentils, vegetables, corn, cotton, tobacco, sisal; livestock, goats; fish
fruits, vegetables; goats, sheep, camels, animal hides
Exports
$624.3 million (2017 est.)
$485.4 million (2016 est.)
$139.9 million (2017 est.)
(2016)
Exports - commodities
gold and other minerals, livestock, sorghum, textiles, food, small industry manufactures
reexports, hides and skins, scrap metal
Exports - partners
China 62%, South Korea 28.3% (2017)
Ethiopia 38.8%, Somalia 17.1%, Qatar 9.1%, Brazil 8.9%, Yemen 4.9%, US 4.6% (2017)
Imports
$1.127 billion (2017 est.)
$1.048 billion (2016 est.)
$726.4 million (2017 est.)
$705.2 million (2016 est.)
Imports - commodities
machinery, petroleum products, food, manufactured goods
foods, beverages, transport equipment, chemicals, petroleum products, clothing
Imports - partners
UAE 14.5%, China 13.2%, Saudi Arabia 13.2%, Italy 12.9%, Turkey 5.6%, South Africa 4.6% (2017)
UAE 25%, France 15.2%, Saudi Arabia 11%, China 9.6%, Ethiopia 6.8%, Yemen 4.6% (2017)
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 rates
nakfa (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 year
calendar year
calendar year
Public debt
131.2% 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.)
$2.029 billion (2017 est.)
Commercial bank prime lending rate

NA

11.3% (31 December 2017 est.)
11.45% (31 December 2016 est.)
Stock of domestic credit
$5.787 billion (31 December 2017 est.)
$5.223 billion (31 December 2016 est.)
$673.1 million (31 December 2017 est.)
$659.4 million (31 December 2016 est.)
Stock of narrow money
$3.084 billion (31 December 2017 est.)
$2.734 billion (31 December 2016 est.)
$1.475 billion (31 December 2017 est.)
$1.361 billion (31 December 2016 est.)
Stock of broad money
$3.084 billion (31 December 2017 est.)
$2.734 billion (31 December 2016 est.)
$1.475 billion (31 December 2017 est.)
$1.361 billion (31 December 2016 est.)
Taxes and other revenues
34.9% (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 use
household 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 saving
5.5% of GDP (2017 est.)
6% of GDP (2016 est.)
6.8% of GDP (2015 est.)
22.3% of GDP (2017 est.)
38.1% of GDP (2016 est.)
19% of GDP (2015 est.)

Source: CIA Factbook