Overview

  • Djibouti is one of the smallest countries in Africa. It covers an area of 23,200 square kilometers and is home to a population of about 865,000 (2011). The size of its economy limits its ability to diversify production and increases its reliance on foreign markets, making it more vulnerable to market downturns and hampering its access to external capital. Djibouti also has less than 1,000 square kilometers of arable land (0.04 percent of its total land area) and average annual rainfall of only 130 millimeters. It depends almost completely on imports to meet its food needs. 

    Djibouti’s strength lies in its strategic location at the southern entrance to the Red Sea, forming a bridge between Africa and the Middle East. Adjacent to some of the world’s busiest shipping lanes, it hosts military bases for France, the United States, Japan, China, and the North Atlantic Treaty Organization (NATO), as well as for other foreign countries with forces supporting global anti-piracy efforts. 

    Djibouti’s US$2 billion city-state economy is driven by a state-of-the-art port complex, among the most sophisticated in the world. Trade through the port is expected to grow rapidly in parallel with the expanding economy of its largest neighbor and main trading partner, Ethiopia. Djibouti has some natural assets that could be used for tourism, untapped marine resources that could support more artisanal fishing, and an infrastructure of undersea telecommunications cables from which it could develop new digital and service industries. Renewable energy could be a source of growth as Djibouti has geothermal, solar, and eolian potential. 

    Thanks to massive, public debt-financed investments in infrastructure, Djibouti has seen rapid, sustained growth in recent years, with per capita GDP growing at more than 3 percent a year on average and real GP at 6 percent. Growth is expected to reach 7.5 per cent in 2019.

    Because of these investments the country’s debt stands at an estimated 70 percent of GDP. The population living below the international poverty line of US$1.90 per day was estimated at 17.1 percent in 2017 but is expected to decrease if it reaps the benefits of infrastructure investments. Djibouti is not currently engaged in an IMF program but has completed an Article IV review, which was discussed by the Fund’s Board of Executive Directors in September 2019.

    Last Updated: Oct 01, 2019

  • The 2014–2017 Country Partnership Strategy (CPS) combines the resources and expertise of the World Bank’s International Development Association (IDA), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). It supports Djibouti’s Vision 2035 strategy, which is to reduce extreme poverty and build the foundations for shared growth by harnessing the country’s human and economic potential. The Bank’s strategy rests on two pillars—reducing vulnerability and strengthening the business environment—with improving institutions and a focus on gender its cross-cutting themes.  

    The upcoming World Bank Group (WBG) Country Partnership Framework (CPF) will build on the Djibouti CPS Performance and Learning Review approved by the Bank’s Board in May 2016. A new CPF is expected by early 2020 and will deepen the Bank’s engagement in job creation, human capital development, and state capacity building. 

    As of October 2019, the active portfolio for Djibouti comprises 15 IDA projects for a total commitment of US$207 million. Teams have continued to leverage IDA resources through recipient-executed trust funds with a net commitment value of about $14 million. Trust-fund activities are aligned with the IDA-funded portfolio. The programs focus on social safety nets, rural community development, urban poverty reduction, health, education, governance, energy, and private sector development. All projects place an emphasis on women and youth. 

    Specific results include:

    • 10,092 beneficiaries have received additional income through labor intensive public works.  

    • 20,409 pregnant women and mothers of young children have received preventative nutrition services. 

    • 56,857 poor households have been registered for targeted assistance, among which 14,605 individuals have been enrolled biometrically.  

    • 1,745,000 m3 of water was made available at water points for 9,692 householders and 132,379 heads of livestock, reducing the amount of time and effort women spend getting water. Women use the time saved either to care for children or carry out other productive activities. 

    • The creation/rehabilitation of 96 ha of irrigation areas, improving agricultural productivity. 

    • Djibouti’s Doing Business ranking improved from 171th in 2016 to 99th in 2018. 

    Last Updated: Oct 01, 2019

    • Social Protection: 

    An innovative social safety net project reached 20,409 women and children in the nutrition program and provided over 500,000 person-days of short-term employment opportunities. About 17,900 beneficiaries were reached with basic preventative nutrition services. The project also supports the national social registry and national social protection strategy. The social registry contains information on about 56,857 households, exceeding its target of 20,000. The collection of their biometric data has been launched. Registry data is being shared by six programs. The program has contributed toward diversifying diet and improving nutrition in beneficiary households and strengthening female empowerment.  

    • Rural Development: 

    The ongoing Rural Community Development and Water Mobilization Project (PRODERMO, 2012–2019) has helped rural communities increase their access to water and improved their ability to manage it and their pastures. Almost 7,000 households have benefited to date and 60,890 heads of livestock have gained access to more secure water supplies. Almost 2,300 persons were trained in water resource management and agro-pastoral resource management; about 1.5 million cubic meters of water infrastructure are being constructed or rehabilitated. 

    • Urban Poverty Reduction Program: 

    The ongoing Urban Poverty Reduction Program supports the upgrading of urban services and infrastructure in Quartier 7 in Djibouti City. Results have been impressive: 37,400 beneficiaries have directly benefited from access to basic services, urban mobility, or flood management; 61,725 person/days of short-term employment have been created, and 3.7 km of urban road has been constructed. 

    • Improving Health Sector Performance :

    The ongoing Improving Health Sector Performance project has increased the use of quality health care services for maternal and child health. Up to 1,543,826 beneficiaries received quality health care services; 61,180 women received two to four prenatal visits; and 45.5% of children were fully immunized before their first birthday. Five first-degree community health centers have been upgraded to second-level-of-care polyclinics providing 24-hour emergency and delivery care and outpatient services for a population of close to 100,000.

    Last Updated: Oct 01, 2019

Api


LENDING

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

*Amounts include IBRD and IDA commitments


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