Housing Finance in Djibouti


This profile is also available in French here.

To download a pdf version of the full 2020 Djibouti country profile, click here.

Djibouti is located in the Horn of Africa, bordering the countries of Somalia and Eritrea. Djibouti’s advantage comes from its strategic location along the Red Sea linking Africa and the Middle East. This strategic location has attracted a number of countries such as the United States, China and Japan, as well as the North Atlantic Treaty Organization, to establish military bases in the country. Djibouti features one the busiest shipping routes connecting Africa, Europe and Asia. The country’s deep-water port is ideal for refueling and transshipment. Djibouti’s GDP growth rate was at 7.47% in 2020. This growth is expected to accelerate to eight percent in 2020-2023.

The country’s population, is estimated at about 973 560 people in 2020 making it one of the smallest in mainland Africa. Djibouti is highly urbanised with 85 percent of the population living in urban areas of which 64.5 percent live in slums. Djibouti has over the years experienced a significant influx of refugees from war-torn neighbours such as Somalia, Eritrea and Yemen. Some of the challenges facing spatial development in the country are unplanned housing and a shortage of basic amenities to meet this demand. Considering the high levels of migration, the country needs to provide adequate infrastructure to serve its citizens, and an additional estimated 30 794 documented plus 150 000 undocumented refugees, asylum seekers and immigrants.

Although the country is surrounded by war-torn neighbours, which account for the majority its immigrants, it recorded economic growth of 7.47 percent as measured by real GDP in 2019 and one of the lowest inflation rates in Africa at 3.32 percent in
2019. Typical mortgage lending rates averaged seven percent in 2019. While Djibouti’s laws mainly promote foreign investment, evidenced by absence of investment screening or related discriminatory approaches, complicated bureaucratic red tape is prevalent. Unemployment is also relatively high rising from 10.26 percent in 2018 to 10.30 percent in 2019, coupled by extremely high poverty rate of 79 percent with 42 percent living in extreme poverty. With such high rates of unemployment and poverty, decent housing remains out of reach for the bulk of Djibouti’s population, particularly considering house purchase and rental prices in the country.

While unemployment rates in the country grew by 0.04 percent pre COVID-19, this was further aggravated by COVID-19 lockdowns that rendered many unemployed in 2020. As at September 2020 Djibouti had reported 5 403 COVID-19 cases, 5 333 recoveries and 61 deaths. Because of its small population, the Centres for Disease Control and Prevention argues that Djibouti had the highest COVID-19 prevalence in Africa. Nonetheless, Djibouti has made a number of efforts to contain the spread of the virus and mitigate its effect on housing. The government ordered lockdowns, but then lifted the restriction in May 2020 largely due to economic hardship experienced by the predominantly poor population.

The World Bank however projects a positive economic outlook for Djibouti, driven by the government’s strategy to position the country as a regional trade, logistics and digital hub. Djibouti has been identified as one of the economies that have made significant improvements in the ‘Doing Business’ environments, having made positive policy reforms in the time taken to register property sale agreements, and through the digitisation of the country’s Land Registry.

Find out more information on the housing finance sector of Djibouti, including key stakeholders, important policies and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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Neighbouring Countries Eritrea Ethiopia Somalia
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