Djibouti

Djibouti is a strategic port state at the mouth of the Red Sea and Gulf of Aden, one of the world's busiest shipping lanes. The economy is driven by port and logistics services (handling approximately 95% of Ethiopia's trade), military base revenues (hosting French, US, Chinese, Japanese, and Italian military bases), and free zone activities. The Djibouti International Free Trade Zone (DIFTZ), developed with China Merchants Group, is one of Africa's largest. Challenges include a small domestic economy, limited natural resources, water scarcity, and high temperatures. Djibouti's currency is pegged to the US dollar, providing stability for international trade.