Photo by UNDP Djibouti
The Djibouti SDG Investor Map was launched today at a ceremony opened by the Prime Minister, H.E. Abdoulkader Kamil Mohamed and Secretary of State for Investments and Private Sector Development, H.E. Safia Mohamed Ali Gadileh, wherein they gave a speech on the investment opportunities in the East African country. Following the opening ceremony, H.E. Mr. Ilyas Moussa Dawaleh, the Minister of Economy and Finance (MEFI) in charge of Industry of the Republic of Djibouti, presented an overview of the sectors and opportunities highlighted by the Map.
The Djibouti SDG Investor Maps can be used by private investors to explore the 21 identified investment themes across eight sectors that not only have significant potential to advance the SDGs, but also where the Government’s policies and sustainable national development needs meet.
Djibouti is strategically positioned in of the Horn of Africa region for its easy access to maritime trade routes. It is at the crossroads connecting Western Europe and Asia via the Suez Canal as well as the Middle East and South Africa via the India Ocean. The investment themes the Djibouti SDG Investor Map has identified center on the regional economic integration and intra-regional trade through inclusive cross-border value chains among neighbouring countries for the peace and stability of the region.
Domestically, the investment themes identified are focused on regional connectivity, economic integration, resilience to climate shocks, access to financing and improved value chains - particularly in food and agriculture.
The eight identified priority sectors span Transportation, Services, Renewable and Alternative Energy, Financials, Technology and Communications, Infrastructure, Food and Beverage and Healthcare. Below are the priority sectors identified for Djibouti where investment could contribute significantly to advance sustainable development:
- Transportation: Djibouti's growth is driven by maritime transportation and mega projects that envisage creating a major hub with multi-modal infrastructure around the Port of Djibouti by 2035.
- Services: Djibouti's economy is dominated by the services sector generating 70% of growth. Transport services, especially port activities are the main growth source and employ most of the workforce. Tourism is a priority sector eligible for advantageous financing from the state-owned Economic Development Fund of Djibouti (FDED); hotel owners can apply for financing to implement environmentally sustainable solutions, and environmentally friendly tourism businesses can apply for loans from DJF 3.5 m to 7m ($19,700-39,400) with 6% or lower interest.
- Renewable and Alternative Energy: Djibouti has a very large and untapped renewable energy potential in terms of wind, geothermal and solar power with an average annual sunshine rate 5 kWh/m² as well as an insolation rate of around 4000 hours. The government, in partnership with Power Africa, has the goal of achieving 100% access to electricity by 2035, using exclusively renewable energy sources.
- Financials: The financial sector in Djibouti is dominated by banks, representing 94% of total assets of the financial system and 80% of total loans to the economy. Microfinancing and innovative solutions could help MSMEs as only 13% of micro enterprises and 39% of SMEs with less than 50 employees use a bank loan.
- Technology and Communications: Access to telecommunications and internet services in Djibouti is limited and could be enhanced through investments increasing the mobile broadband penetration rate. Djibouti Vision 2035 focuses on strengthening the ICT sector to provide quality telecommunication services at affordable prices and to leverage the potential of digital technologies as a driver of economic growth.
- Infrastructure: Affordable and eco-friendly housing could help Djibouti’s population gain access to decent housing tackling challenges, particularly considering house purchase and rental prices in the country.
- Food and Beverage: Boosting agricultural activity could generate employment and help address the high dependence on imports for food security and rising levels of desertification in rural areas. The contribution of agriculture to the national GDP is expected to increase from 3.7% in 2012 to 4.1% in 2022 and 5% of GDP by 2035, according to the Djibouti Vision 2035 strategy document.
- Healthcare: The 2018-22 National Health Development Plan, allocates an operating budget comprising 6.73% of total government expenditures to the Ministry of Health to provide quality care and accessibility, carry out disease and sickness prevention campaigns, and strengthen governance and information management.
The Djibouti SDG Investor Map was created in collaboration with the UNDP Istanbul International Center for Private Sector Development (UNDP IICPSD) and UNDP Djibouti with the support of the MEFI of the Republic of Djibouti.
Explore the investment themes, business models and the respective government policies in more detail here.
For more information on the SDG Investor Map methodology, click here.
To learn how to manage sustainable impacts of investment and business, enroll in our free online Coursera course Impact Measurement and Management for the SDGs, produced in collaboration with CASE at Duke University here.