Djibouti is a small country in which more than 23% of the population lives in extreme poverty. With less than 1,000 km2 of arable land (0.04% of 23,200 km2) and an average annual rainfall of 5.1 inches, Djibouti has a chronic food deficit and is totally dependent on imports to meet its food needs. As such, it is highly sensitive to external shocks such as spikes in food and fuel prices and natural disasters such as floods and droughts. Djibouti’s economy is dependent on foreign financing, Foreign Direct Investments, rents from foreign countries’ military bases, and port services, which capitalize on both the strategic position at the southern entrance to the Red Sea and as Ethiopia’s main import-export route.

The private and public investment boom in port-related capital-intensive activities continues to spur growth in Djibouti, but macroeconomic risks remain high. Although national accounts data are limited in Djibouti, the IMF estimated that real GDP grew by about 6.5% in 2015–16, up from 6% in 2014 and 5% in 2013. Growth and macroeconomic stability remain subject to substantial risks such as delays in construction, inefficient management of new infrastructure, adverse economic events in countries on which Djibouti depends economically, regional security developments, and domestic social and political instability.

Recourse to publicly and externally financed investments is reflected in growing twin deficits. The fiscal deficit grew to 16.5% of GDP in 2015 from 12.2 % in 2014.  Similarly, the external deficit soared to an estimated 31% of GDP in 2015 from 25.6% in 2014, foreign reserves remain strong at an estimated US$350 million in 2015 (covering 3.6 months of imports and 109% of the currency board). However, the commercial bank loan portfolio has deteriorated and nonperforming loans are on the rise, topping 22 % in June 2015.  Moreover, Fiscal and external debt sustainability pressures are intensifying with the approaching completion of disbursements from two large nonconcessional loans contracted in 2013.

Last Updated: Oct 01, 2015

The 2014-2017 Country Partnership Strategy combines the resources and expertise of the International Development Association (IDA), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The Strategy supports the government’s vision 2035 to reduce extreme poverty and build the foundations for shared growth by harnessing the country’s human and economic potential. It rests on two pillars—reducing vulnerability and strengthening the business environment—while focusing on institutional strengthening and gender as cross-cutting themes.  

In March 2016, a Bank review of the program reflected that progress has been made in the implementation of the ongoing strategy, in particular with reference to strengthening the business environment, creating jobs, supporting rural communities, and increasing access to energy for the population.

As of August 2016, the active WBG portfolio for Djibouti comprises seven IDA projects, for a total commitment of US$62.5 million. The program – both IDA and trust funds – focuses on social safety nets, energy, rural community development, disaster risk management, urban poverty reduction, health, education, governance and private sector development.  All projects place particular emphasis on women and youth.

In May 2016, the Bank’s board approved a regional project to help countries dealing with displacement issues in the Horn of Africa (Djibouti, Ethiopia and Uganda). New waves of displacement from Yemen threaten to overwhelm the Djibouti’s already fragile institutions and public services. A US$20 million World Bank project aims to strengthen basic infrastructure so that the country can cope with the additional demand, and to create economic opportunities for both refugees and the communities. The project seeks to address gender inequality, reduce gender-based violence, and empower young people by helping communities to identify and prioritize investments in social services, economic infrastructure, and traditional and nontraditional livelihoods. Interventions will focus specifically on women, female-headed households, and young people, who are disproportionately affected by displacement. It will also contribute to reducing greenhouse gas emissions by supporting the use of renewable energy sources, soil and water conservation measures, and afforestation efforts in support of the climate change agenda.

Last Updated: Oct 01, 2015

Social Protection:

An innovative social safety nets project reached over 10,000 women and children who participated in the nutrition program and provided about 480,000 person-days of short term employment opportunities. The program contributed to diet diversification and improved nutrition practices among beneficiary households and strengthened female empowerment. At project level, an integrated Management Information System covering the nutrition, as well as the workfare component has been developed to ensure efficient implementation of the social safety net project in Djibouti. At the national level, the project is supporting the development of a social registry that will be used by multiple programs and stakeholders, creating a database containing socio-economic/demographic characteristics of the population to target resources to the most needed; the social registry will spearhead, and eventually feed into, a national ID system.


The Power Access and Diversification Project which closed on December 31st, 2014, allowed 12,000 people to access electricity. Essential social infrastructures have been electrified and 199 street lights have been installed in the poor neighborhoods of PK12 and Balbala. This parent project enabled electricity access to 4% of the total population. The project also financed the piloting of smart metering, with 3,300 meters deployed, which allowed the provision of better quality services by EDD to its clients, while enabling the company to reduce its losses, increase its profitability and improve capacity to cover costs. Moreover, a regulation on security stocks was promulgated to ensure diesel availability for the additional water pumping needs of the poor rural population in response to the prolonged state of drought in the country. Based on the regulation, the security stocks financed by IDA will be used in the next 10 years for water pumping during the 3 driest months of the year, i.e. June, July and August.

Rural Development:

The ongoing Rural Community Development and Water Mobilization Project (PRODERMO, 2012-2019), is the first project in Djibouti to support small scale fisheries activities. More than 3,750 households benefited from the water mobilized so far and 160 fishermen are benefiting from the recently rehabilitated Ice unit, allowing better fish conservation and improved quality.

Last Updated: Oct 01, 2015


Djibouti: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments