November 2022

CENTRE FOR
AFRICA-CHINA STUDIES
OCCASIONAL PAPER NO 2
Djibouti: Africa’s microstate with a military stronghold

Goitseone Maswabi and Lebo Mosebua

Djibouti: Africa’s microstate with a military

Published in November 2022 by:

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LIST OF ACRONYMS

AFCFTA - The African Continental Free Trade Area

AGOA - African Growth and Opportunity Act

AU - African Union

BRF - Belt and Road Forum for International Cooperation

BRI - The Belt and Road Initiative

CCECC - China Civil Engineering Construction Corporation

CRCC - China Railway Construction Corporation

FOCAC - Forum on China-Africa Cooperation

GDP - Gross Domestic Product

IMF - International Monetary Fund

PLA - People Liberation Army

PRC - People’s Republic of China

SDF - Japanese Self-Defence Force

USA - United States of America

Djibouti, formally the Republic of Djibouti, is one of the smallest African countries coming in at only
23 200 km2. Although small, Djibouti is located strategically on the Bab El-Mandeb Strait, which
connects the Red Sea to the Gulf of Aden and the Indian Ocean. In addition, Djibouti is located not
far off from one of the busiest and most important waterways in the world, the Suez Canal. Both
the Suez Canal and the Gulf of Aden are crucial channels for both national and international trade.
Essentially, every ship that passes through the Bab El-Mandeb Strait, will also make its way past the
Gulf of Aden; unless the ship’s ‘port of call’ is in Sudan or Saudi Arabia.

In addition to its reality as a landlocked East African country, the country only has 1 000 km2 of
arable land, which has led to a chronic food security crisis for its population of 1 011 507. To put this
crisis in context, the average Djiboutian spends 83% more on food and other essentials than the average
South African. This has created a harsh reality for the more than 23% of Djiboutians already living
in extreme poverty.

In spite of its agricultural and economic challenges, Djibouti is viewed as an attractive location
for global superpowers that wish to set up military base in the horn of Africa and has become a military
home away from home for several international superpowers.

Military playground

As of November 2022, France, the United States of America (USA), Japan, China and Italy,
all host military bases in Djibouti. Following the country’s independence from France in 1977, and
as one of the conditions for its independence, French troops remained in the country to help protect
its interests in Djibouti and within the region. Today, there are approximately 1 500 French troops
stationed in Djibouti.

Following the 9/11 attacks, the USA launched various counter-terrorism efforts with one such being
the deployment of a permanent military delegation in Djibouti as part of Africom. The USA realized
the need to establish localized networks across various strategic locations in order to better manage
global threats. In 2002, the USA acquired Camp Lemonnier in an effort to counter terrorism,
promote stability and protect its interests in the Horn of Africa.

Historically, Italy has maintained its presence in the Horn of Africa. Originating from its colonial
past, Italy occupied Eritrea, Somalia and Ethiopia. Owing to its positioning in the region, in 2013
Djibouti became home to Italy’s military support base, which accommodates roughly 300 personnel.

Asian superpowers have also acquired a slice of this cake. In 2011, Japan opened its first overseas
military base since World War II in Djibouti. Although notably smaller than the USA and French
contingents in Djibouti, it remains a key base in aiding the counter-piracy efforts in the region. It
is also home to 600 members of the Japanese Self-Defence Forces (SDF) who move between naval
vessels and their land base to achieve this end.

Africa’s largest investor, China, opened up its People Liberation Army (PLA) base in Djibouti adjacent
to the critical Port of Doraleh. This base, which was officially inaugurated in 2017, is located on the
coast of the Horn of Africa, making it China’s first overseas military base. Interestingly, the PLA’s
military base is only 14 kilometres away from the US’s Camp Lemonnier adding another layer to
tensions between Washington and Beijing. China’s aim with this base, is among others, combatting
the threat of piracy in the Gulf of Aden and protecting its interests in the region. That, alongside its
investment in different infrastructure projects in the region, all helps to solidify China’s economic
and political influence in Africa.
China’s presence in Djibouti

Djibouti has undertaken an ambitious strategy to grow into a regional hub for trade in the Horn
of Africa. A sizable portion of this project is being funded by the People’s Republic of China (PRC),
which is playing a significant role in the infrastructural development of the torrid country.

Under the African Growth and Opportunity Act (AGOA), Djibouti is eligible for preferential trade
incentives. Several significant infrastructure projects, including a natural gas pipeline, a liquefaction
plant, an export terminal, a geothermal plant, renewable energy projects, and the Djibouti
International Free Trade Zone, which will be Africa’s largest free trade zone, are anticipated to be
completed by Djibouti before 2035.

A 750-kilometer Addis Ababa-Djibouti railway is China’s greatest investment in the Horn of Africa.
2018 saw the project’s commercial launch and its 3.5 billion USD price tag. This international project,
which was planned and contracted before the BRI was established, will span 100 kilometres of Djibouti
and 650 kilometres of Ethiopian territory. The Djiboutian government granted the China Civil
Engineering Construction Corporation (CCECC), a division of China Railway Construction Corporation
(CRCC), a separate 505 million USD contract in February 2012 to cover the Djiboutian portion of the
project.

China’s involvement in the country is seen as multifarious, varying from substantial infrastructural
investments to the creation of a military outpost in Djibouti. The China-Djibouti ties have grown
and produced positive outcomes in a number of areas in recent years. China initially sought a permanent
military presence outside of its borders in 2017 when it opened a naval station in Djibouti. That
same year, China and Djibouti agreed to form a strategic partnership to improve overall cooperation,
ushering in a new era in bilateral relations. The Chinese military’s position in the Horn has evolved
since it started conducting anti-piracy operations off the coast of Somalia in late 2008. Its actions
to evacuate Chinese nationals using a navy supercarrier from Yemen in 2016 and Libya in 2011 may
have had an impact on its choice to set up a facility in the region.

China has significantly increased its political influence in South-East Asia and East Africa by harnessing
its economic power. The autocratic governments of many of the African countries with which China
has increased its engagement have caused policies to converge more than in the past, with only one
African country (Eswatini in South Africa) choosing to support Taiwan over China because China’s
“One China” policy is opposed to recognising Taiwan. China has pledged billions of dollars to East
African infrastructure improvements. Their large investments, which other banks and nations are
hesitant to provide, have given them an advantage in Africa and drawn nations like Djibouti closer
in terms of dependence.

The African Continental Free Trade Area (AfCFTA)

In 2019, Djibouti was listed by the International Monetary Fund (IMF) as one of the treaty signatory
countries to the African Continental Free Trade Area (AfCFTA). The IMF reported that 54 (of 55) of
the African Union (AU member) nations had ratified the AfCFTA by the end of January 2020. The
55 African nations that make up the AfCFTA, with a total estimated GDP of 2.5 trillion USD and a
population of over 1.2 billion, were anticipated to be included if completely implemented. It would
be the world’s largest free trade region in terms of population.

The AfCFTA was established to aid in the economic potential of the continent. The basis of the
agreement was to boost Africa’s poor productivity and encourage more investment, which would
raise income levels and lessen poverty. Most of Africa’s trade is with countries outside the continent.
Since 2000, Africa’s trade has migrated away from the United States and Europe and towards China
and Asia in general. Given that Djibouti is in a geostrategic location, superpowers and more so China
would be justified in massively investing in the country, which would be consistent with the AfCFTA
treaty. Djibouti has used its strategic geographic location to gain concessions from multiple influential
players and has leveraged other partners and investors through China’s presence.

Djibouti as a member of the Belt and Road Initiative (BRI)

The Belt and Road Initiative (BRI) was initiated by Chinese President Xi Jinping in 2013 with the
announcement of an economic belt along the Silk Road and a maritime silk road for the 21st century.
A massive transport network, including highways, ports, energy, and railways, was the intention
behind China’s Belt and Road Initiative introduced in 2013. Besides passing through Asia, Europe,
and Africa, the BRI will pass through East African countries such as Djibouti, Ethiopia, Kenya,
Rwanda, Uganda, and Tanzania.

Following a meeting between Presidents Guelleh and Xi at the seventh Forum on China-Africa
Cooperation (FOCAC) in Beijing, Djibouti signed a Memorandum of Understanding in September
2018 to collaborate with China on the BRI. In April 2019, the two countries signed a ‘Cooperation
Plan’ for the BRI’s co-construction. Chinese officials pitched the initiative as a means of enhancing
global connectivity, accommodating global trade, and boosting economies of participating countries.

A growing number of neighbouring countries have become increasingly supportive of China’s Belt
and Road Initiative (BRI) with the increased participation in the Belt and Road Forum for International
Cooperation (BRF) (dating back to 2017 after the first BRF meeting). Country leaders who have taken
part in the programme have been supportive. However, some Western nations, including the United
States, have criticised it as a “debt trap”. In order to participate in the BRI, host nations must borrow
large sums of money that European and other Western institutions are unwilling to provide due to
the instability and risks of those regions. Consequently, countries must rely on China’s willingness
to lend, even if the terms are better for China. Some nations cannot afford to service their debts to
China in time, while others have already defaulted. In response to this, countries like the United
States have referred to the BRI as a debt trap.

Djibouti has consequently grown extremely reliant on China, who is now its biggest creditor.
Between 2014 and 2018, Djibouti’s national debt rose from 50% of Gross Domestic Product (GDP)
to 104% as a result of Chinese projects. At the end of 2017, China had lent Djibouti 1.47 billion USD
(or 77% of its GDP), primarily through its Exim Bank, which prompted the International Monetary
Fund (IMF) to issue a warning.

Why the scramble to set up base in Djibouti?

There are a number of reasons why global superpowers are scrambling to set up base in Djibouti.
The most compelling reason being its strategic geographic location. The country lost its relevance
in global politics following the end of the Cold War. However, the rise of maritime security issues in
the Gulf of Aden and terrorism saw the revival of its relevance and importance in the region.

Djibouti has a unique geostrategic location as it is bordered by Eritrea to the North, Ethiopia to the
West, and Somalia to the Southeast. The destabilisation of the Horn of Africa is often attributed
to the domestic politics of Eritrea, Ethiopia and Somalia. These three countries are fraught with
a number of challenges: poor state institutions, extreme poverty, rising conflicts and free-falling
economies. These challenges have given rise to a human rights crisis that has expedited security
challenges in the region.
Somalia, for instance, has not had an effective central government for over two decades. This has
impacted on its ability to maintain a well-functioning naval force, equipped with upholding and
enforcing maritime law. This, together with a floundering economy, poverty and high levels of
unemployment, has created fertile ground for piracy to flourish off the coast of Somalia and along
the Gulf of Aden, one of the world’s busiest shipping lanes.

According to research conducted by the LSE Group, every 120 million USD seized by Somalian pirates
translates to a loss of between 0.9 and 3.3 billion USD for the global economy. Naturally, the challenge
of piracy has given rise to a need for global superpowers with interests in the region to build their
own military and naval capacity to protect their various interests.

Djibouti is regarded as a relatively stable country in the volatile region, thus making it a magnet for
countries aiming to establish military bases.

In addition to Djibouti’s status as a relatively stable country and its prime location, the country
benefits financially from the rent paid for these bases. With a GDP of only 3.38 billion USD, the over
300 million USD it generates from the rent paid for these bases serves as a vital lifeline for the
country’s economy.

A balancing act

The existence of foreign military bases in Djibouti has proven to be a double-edged sword for all
those involved. The 300 million USD it generates from the rent paid for these military bases provides
a certain level of comfort and stability for the country as it seeks to find more sustainable ways of
strengthening its economy. Nevertheless, hosting different flags with competing interests comes
with its own set of challenges that require a political balancing act to maintain.

The competing and often conflicting interests of international actors may threaten the country’s
ability to independently make policy decisions. When China took over the Port of Doraleh in 2017,
the US government strongly condemned this move, citing their concerns that this would have an
impact on their military and intelligence assets in Djibouti. There is also the risk that tensions
between superpowers may spill over onto Djibouti land. China and US tensions, for instance, could
lead to a devastating outcome should a trade war between the two escalate.

The resolution of Djibouti’s domestic issues could also be compromised by the presence of permanent
military bases in Djibouti. Djibouti’s current president, Ishmail Omar Guelleh, has served as the
country’s president since 1999, taking over from his uncle Hassan Gouled Aptidon. Up until 2010,
the president of Djibouti could only be elected for two six-year terms. In spite of that, the parliament
of Djibouti approved a constitutional amendment that would do away with terms limits and set a
75-year age limit for candidates.

Guelleh has been criticised by many as being a dictator, known for jailing opposition leaders,
silencing detractors and censoring media. Efforts made by human rights groups and civil society
organisations to resolve human rights complaints have been drowned partly due to the influence of
the world’s most powerful nations that have been allowed to host military bases in the country by
Guelleh’s government. Many observers say that is because these countries have a vested interest in
maintaining the status quo.
Looking ahead

President Guelleh aims at tapping into the country’s tourism potential with a grand master plan
poised towards turning Djibouti into ‘Africa’s Dubai’. The country is also building a 3.5 billion USD
free-trade zone, in which China has a huge stake. With only four years remaining of his last term in
office, it will be interesting to see whether or not this ‘grand plan’ materialises.

The outcome of the country’s next presidential elections will be extremely important in shaping the
future trajectory of the country. With 2026 being Guelleh’s last year in office, all eyes will be on his
successor. It will be crucial for his successor to be competent enough to manage the competing
interests of the various superpowers present in the country as well as seeing the country’s ambitious
plan of turning Djibouti into ‘Africa’s Dubai’. It will also be important for the next president to
prioritise resolving the countries high levels of unemployment, poverty and human rights issues.
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