Market Overview
Djibouti is a strategically critical rail node in East Africa, serving as the Indian Ocean terminus of the Addis Ababa–Djibouti Railway. This 756-km electrified standard gauge line, built by Chinese contractors and financed by China Exim Bank, gives landlocked Ethiopia direct rail access to the Port of Djibouti. The railway handles a growing volume of freight destined for Ethiopia, which represents the vast majority of Djibouti's port throughput. Djibouti City is also home to a free trade zone and multiple foreign military bases, making it a key logistics hub for the Horn of Africa. The government is studying additional rail connections and port expansion to capitalise on growing regional trade flows. Djibouti's small size makes rail a relatively straightforward investment, with high strategic returns.