Djibouti as a center for Islamic investments in the East African region

Identified as the “financial hub of East Africa,” Djibouti is a strategic country located in the Horn of Africa and close to the Middle East. The Constitution of Djibouti declares Islam to be the State Religion, and its official languages are Arabic and French. JEAN-BAPTISTE SANTELLI and RACHA WYLDE write.

According to the World Bank, the GDP of Djibouti grew at an estimated 5.1% in 2024 and is expected to accelerate to 5.4% in 2025. In 2023, Djibouti had an unemployment rate of 26.5%. The poverty rate is projected to continue declining as the country develops. Djibouti has few natural resources and a limited industry; its economy depends on foreign direct investments and port services. The country’s strategic location at the southern entrance of the Red Sea and close to the Ethiopian market has facilitated the expansion of its banking activity and encouraged it to pursue Islamic finance.