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Djibouti's economy is largely concentrated in the service sector. Commercial activities revolve around the country's free trade policies and strategic location as a Red Sea transit point. Due to limited rainfall, vegetables and fruits serve as the principal production crops, and other food items require importation. The GDP (purchasing power parity) in 2013 was estimated at $2.505 billion, with a real growth rate of 5% annually. Per capita income is around $2,874 (PPP). The services sector constituted around 79.7% of the GDP, followed by industry at 17.3%, and agriculture at 3%.

As of 2013, the container terminal at the Port of Djibouti handles the bulk of the nation's trade. About 70% of the seaport's activity consists of imports to and exports from neighboring Ethiopia, which depends on the harbour as its main maritime outlet. The port also serves as an international refueling center and transshipment hub. In 2012, the Djiboutian government in collaboration with DP World started construction on the Doraleh Container Terminal, a third major seaport intended to further develop the national transit capacity. A $396 million project, it has the capacity to accommodate 1.5 million twenty foot container units annually.

Djibouti was ranked the 177th safest investment destination in the world in the March 2011 Euromoney Country Risk rankings. To improve the environment for direct foreign investment, the Djibouti authorities in conjunction with various non-profit organizations have launched a number of development projects aimed at highlighting the country's commercial potential. The government has also introduced new private sector policies targeting high interest and inflation rates, including relaxing the tax burden on enterprises and allowing for exemptions on consumption tax.

 

Additionally, efforts have been made to lower the estimated 60% urban unemployment rate by creating more job opportunities through investment in diversified sectors. Funds have especially gone toward building telecommunications infrastructure and increasing disposable income by supporting small businesses. Owing to its growth potential, the fishing and agro-processing sector, which represents around 15% of GDP, has also enjoyed rising investment since 2008.

To expand the modest industrial sector, a 56 megawatt geothermal power plant slated to be completed by 2018 is being constructed with the help of OPEC, the World Bank and the Global Environmental Facility. The facility is expected to solve the recurring issue of electricity shortages, decrease the nation's reliance on Ethiopia for energy, reduce costly oil imports for diesel-generated electricity, and thereby buttress the GDP and lower debt.

 

The Djibouti firm Salt Investment (SIS) began a large-scale operation to industrialize the plentiful salt in Djibouti's Lake Assal region. Operating at an annual capacity of 4 million tons, the desalination project has lifted export revenues, created more job opportunities, and provided more fresh water for the area's residents. In 2012, the Djibouti government also enlisted the services of the China Harbor Engineering Company Ltd for the construction of an ore terminal in the area. Worth $64 million, the project is scheduled to be completed within two years and will enable Djibouti mineral officials to export a further 5 thousand tons of salt per year to markets in Southeast Asia.

The Djiboutian franc is the currency of Djibouti. It is issued by the Central Bank of Djibouti, the country's monetary authority. Since the Djiboutian franc is pegged to the U.S. dollar, it is generally stable and inflation is not a problem. This has contributed to the growing interest in investment in the country.

As of 2010, 10 conventional and Islamic banks operate in Djibouti. Most arrived within the past few years, including the Somali money transfer company Dahabshiil and BDCD, a subsidiary of Swiss Financial Investments. The banking system had heretofore been monopolized by two institutions, the Indo-Suez Bank and the Commercial and Industrial Bank (BCIMR).  To assure a robust credit and deposit sector, the government requires commercial banks to maintain 30% of shares in the financial institution; a minimum of 300 million Djiboutian francs in up front capital is mandatory for international banks. Lending has likewise been encouraged by the creation of a guarantee fund, which allows banks to issue loans to eligible small-and-medium-sized businesses without first requiring a large deposit or other collateral. Saudi investors are also reportedly exploring the possibility of linking the Horn of Africa with the Arabian Peninsula via an 18-mile (29 km) long oversea bridge through Djibouti referred to as the Bridge of the Horns. The investor Tarek bin Laden has been linked to the project.

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