DJIBOUTI: RED SEA DYNAMICS POSE GROWING THREAT OF TRADE DISRUPTION AND DEBT DISTRESS

   Thu, 22 February 2024

Suspensions of bookings to Djibouti by global shipping companies due to heightened insecurity risks in the Red Sea and Gulf of Aden, as well as the nascent Ethiopia-Somaliland port deal, represent tangible challenges to Djibouti's economic model, which has been heavily reliant on port and logistics services. These developments not only threaten to redirect critical Ethiopian trade, but also highlight Djibouti's vulnerability to regional geopolitical shifts and global maritime trade fluctuations. Despite a robust economic rebound in 2023, driven by increased port traffic and construction activities, Djibouti now needs to navigate these uncertainties while managing its substantial debt burden.

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