Construction & Real Estate
From The Report: Djibouti 2016
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Benefiting from several years of consistent macroeconomic stability and the roll out of more business-friendly regulation, Djibouti has attracted a rising amount of investment – equivalent to as much as 52% of GDP – with the vast majority directed towards capital projects. This in turn is having a noticeable impact on Djibouti’s construction sector. Urban renovation programs in the cities, especially the capital, are improving housing infrastructure, while large-scale transport infrastructure projects aiming to better connect the country and establish its position as an international commerce hub are helping reshape this small nation in the Horn of Africa. New transport, energy, water and urban infrastructure will be key for Djibouti to solidify its economic integration with international markets, but equally important will be its impact on the overall improvement in living conditions. Making the housing construction sector more dynamic will significantly help in this respect, though tackling the country’s housing deficit will remain a critical challenge, both in terms of quality and quantity. The government is working to devote a higher amount of public resources and attention to the development of adequate housing solutions. In addition to helping expand housing options for the 875,000-person country’s middle-class, large-scale efforts are also being directed towards the elimination of informal settlements in major cities, with a view to replacing temporary housing with adequate long-term construction. Policy changes – both in terms of the allocation of budgetary resources, as well as stronger encouragement for private sector participation – are expected to accelerate the construction of new homes across the country over the coming years. This chapter contains an interview with Amina Abdi Aden, Secretary of State for Housing.

Articles from this Chapter

Overview

Building blocks: Countrywide infrastructure development expands construction activities
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Benefitting from several years of consistent macroeconomic stability and the roll-out of greater business-friendly regulation, Djibouti has attracted a rising amount of investment – equivalent to as much as 52% of GDP – with the vast majority of it being directed towards capital projects. This in turn is having a noticeable impact on Djibouti’s construction sector. Urban renovation projects in the cities, especially the capital, are improving housing infrastructure while large-scale transport…

Analysis

Necessary inputs: Securing sufficient amounts of locally produced quality cement can be challenging
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As Djibouti executes its $14bn infrastructure development plan, securing the necessary building materials has become a crucial necessity for construction companies and suppliers. This is most visible in terms of cement, an industry which has become the beneficiary of new investment across the continent, as major producers like Lafarge and Dangote look to raise capacity in high-growth economies. Production Capacity In spite of high energy costs – traditionally a disincentive for large energy…

Interview

Building homes: OBG talks to Amina Abdi Aden, Secretary of State for Housing
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Interview: Amina Abdi Aden What role does the private sector play in encouraging residential projects? AMINA ABDI ADEN: The need for housing in Djibouti is linked to our population increase, which currently stands at 3% per year, resulting in the need for 3000 housing units annually. On top of that, we have a deficit of around 10,000 units that has accumulated over past years. We believe that a percentage of these 3000 new residential plots will be built by existing residents who own their own…

Overview

Structuring the market: Reforms in legislation should see an increase in affordable housing
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As the Djiboutian economy continues to post high headline growth rates, the lion’s share of attention is going towards the large volumes of capital funding for a spate of new infrastructure projects. However, the government is also working to devote an increasing amount of public resources and attention to the development of adequate housing solutions. Not only is this being done to help with the expansion of housing options for the 850,000-person country’s middle-class, large-scale efforts are…

Analysis

Building a roof: Increased financing incentives in the housing market
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One of the housing sector reform’s most important changes is the establishment of the Housing Bank of Djibouti (Banque de L’Habitat de Djibouti). The new institution aims to give the state a new position in the financing mechanisms for the country’s housing sector, something that private banks, despite their increased presence in the country, have so far been unable to do. The state will channel considerable resources into the new institution. Up to DJF300m ($1.7m) will go into a feasibility…