Djibouti is an African nation located on the continents eastern edge where it covers an area of roughly 8,958 square miles. In 2017, the World Bank ranked the Djibouti gross domestic product, which at the time was approximately $1.85 billion, as the 164th highest in the world. The economy of Djibouti is reliant on several natural resources such as the country's arable land, minerals, and energy sources.
According to statistics from the World Bank, roughly 0.086% of Djibouti's land was considered arable. During the 21st century, the amount of arable land in Djibouti has been fluctuating significantly, and it was at its lowest level in 2004 when it was at 0.04%. Despite the small size of arable land in Djibouti, agriculture is one of Djibouti's most important sectors. Some of the most agriculturally productive regions in Djibouti include the areas around the Mabla Mountains and the Goda mountains. In 2017, according to estimates from the Djiboutian government, the agricultural sector contributed roughly 2.8% of the country's gross domestic product. In that year, roughly 10% of the Djibouti labor force was employed in the agricultural sector.
The number of people involved in the Djiboutian agricultural industry has reduced significantly and in the 1990s more than 70% of the Djiboutian labor force was involved in the agricultural sector. In 1999, Djiboutian farmers produced roughly 23,000 tons of agricultural products. Due to the climate of Djibouti, most of the farmers in the country rely on irrigation to supply their crops with water. The Djiboutian government estimated that in 2012 roughly 4 square miles of land in Djibouti was under irrigation. Some of the most important crops grown within Djibouti include dates and tomatoes. Djiboutian farmers grow dates along the country's coastal region. Most of the crops grown in Djibouti are sold to other nations. Despite the importance of the Djiboutian agricultural sector, the country is unable to produce enough food to feed the Djiboutian people and is forced to rely on imports from other nations such as Kenya and Ethiopia. The most significant challenge facing the Djiboutian agricultural sector is the low amount of rainfall received in the country which has forced Djiboutian farmers to invest in expensive water pumps. Due to the high cost of agriculture in the country, most of the farmers in the country have abandoned farming.
Djiboutian farmers keep different types of livestock such as camels, goats, and sheep. The livestock sector is one of Djibouti's most ancient industries since Djiboutian communities have kept livestock since the pre-colonial era. In the modern era, most of the livestock in Djibouti are kept in rural areas. Livestock products are some of Djibouti's essential export products. According to data from the Djiboutian government in 2016, sheep and goats were the most exported livestock from Djibouti with close to 160,000 animals sold to other nations. Apart from sheep and goats, Djiboutian farmers also export large number of cattle with estimates indicating that more than 55,800 cattle were exported from Djibouti. The major challenge facing the Djiboutian livestock sector is the country's climate which reduces the amount of water and pastures available to the country's livestock. Due to the importance of the livestock industry to the Djiboutian economy, the Djiboutian government has invested huge sums of money in the country's livestock sector. The Djiboutian government has also urged the private sector to invest in the country's livestock industry.
Due to its location, Djibouti has vast fishing resources, particularly within the Red Sea. The waters around Djibouti attract both commercial fishers and sports fishers. Most of the sports fishermen who visit Djibouti are attracted to the area due to the significant number of game fish in the country. One of the primary sport fishing areas in Djibouti is the Seven Brothers Archipelago which is considered one of the premier locations globally for sports fishers. Commercial fishing within Djibouti's waters is one of the activities vital to the Djiboutian economy. According to data from the Djiboutian government in 1981, Djiboutian fishers caught roughly 503 tons of fish. In the 21st century, the amount of fish caught in Djibouti has increased significantly and in 2014 roughly 2,300 tons of fish were caught within Djibouti. Djibouti's most significant fishing area is the Red Sea Fishing Port which registered a catch of 1,760 tons in 2014. Most of the fishermen in Djibouti, roughly 95% according to some estimates, relied on traditional fishing methods which have hampered the growth of the Djiboutian fishing industry. The Djiboutian government has invested heavily in developing the country's fishing industry to increase the amount of money the sector contributes to the economy.
Due to Djibouti's climate, water is one of the most critical natural resources in the country. Water in Djibouti is mainly used for irrigation and for livestock in the country. The amount of fresh water in Djibouti has been decreasing significantly due to the impact of climate change which has reduced the amount of rainfall received in the country. The Djiboutian government estimated that in the past 25 years, the amount of rainfall in Djibouti has decreased by close to 20%. The Djiboutian government estimated that if the impacts of climate change are not mitigated, the amount of rainfall in the country could decrease further.
Djibouti, unlike other nations within the region, has limited minerals. Some of Djibouti's most essential minerals include diatomite, clay, and salt. The Djiboutian government estimated that in 2004, the mining industry contributed about 3% of the country's gross domestic product. Salt is one of the major minerals produced in Djibouti and in 2001, Djiboutian salt miners extracted about 173,000 tons of salt. In subsequent years, Djibouti's salt production declined significantly and in 2004 Djiboutian salt miners extracted only about 30,000 tons of salt.
Challenges Facing the Djiboutian Economy
The major challenge facing the Djiboutian economy is the rapidly changing global climate which has reduced the amount of rainfall in the country, which has limited the growth of different key industries in the country.