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Overview

  • Djibouti is one of the smallest countries in Africa, with an area of 23,200 square kilometers and a population estimated at about 990,000. 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. With less than 1,000 square kilometers of arable land (0.04% of its total land area) and average annual rainfall of only 130 millimeters, Djibouti 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, marking a bridge between Africa and the Middle East. Adjacent to some of the world’s busiest shipping lanes (between Asia and Europe), it hosts military bases for France, the United States, Japan, China, and the North Atlantic Treaty Organization (NATO), as well as for other countries with forces supporting global anti-piracy efforts. 

    Djibouti’s 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 the country’s 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 another source of growth, as Djibouti has geothermal, solar, and eolian potential. 

    Djibouti’s economy has so far been less affected by the pandemic than expected. Output growth slowed down to 0.5% in 2020, rather than contracting further, thanks to buoyant free zone re-exports and exports of transportation, logistics, and telecommunication services to and from Ethiopia in 2020 Q3 and Q4. Free zones’ strong export activity relied (and somewhat depleted) significant existing stocks. Higher exports and lower (capital goods) imports increased the current account surplus. 

    The country’s medium-term economic outlook remains positive despite the impact of COVID-19: Output growth is set to reach 5.5% in 2021 and average 6.2% over 2022 and 2023, as free zone re-exports, as well as economic activity in, and exports of, transportation, logistics, and telecommunication services to Ethiopia rebound. That said, a more protracted economic slump in Ethiopia would have knock-on effects in Djibouti. Djibouti’s ongoing infrastructure projects, such as the construction of a ship repair yard, a new oil jetty at the Port of Damerjog and new hospitality infrastructure are also expected to boost growth and job creation, barring protracted delays in these new projects. The shipyard's repair and maintenance capabilities are expected to attract more ships to Djibouti, giving the country’s main port a competitive advantage over neighboring ports, and cementing its position as a regional trade and logistics hub.

    Last Updated: Apr 19, 2021

  • The upcoming World Bank Group (WBG) Country Partnership Framework (CPF) will build upon the Djibouti CPS Performance and Learning Review. Approved by the Bank’s Board in May 2016, this supports Djibouti’s Vision 2035 strategy to reduce extreme poverty and build the foundations for shared growth by harnessing the country’s human and economic potential. The new CPF is expected to be issued mid-2021 and will deepen the Bank’s engagement with Djibouti in job creation, human capital development, and state capacity building. 

    As of March 2021, Djibouti’s active portfolio comprises 14 IDA projects worth about US$240 million. Bank teams have been able to leverage IDA resources through recipient-executed Trust Funds, with a net commitment value of about $8.4 million. (Trust Fund activities are aligned with the IDA-funded portfolio.) The portfolio is focused on education, health, social safety nets, energy, rural community development, urban poverty reduction, the modernization of public administration, governance, and private sector development, with an emphasis on women and youth.

    Last Updated: Apr 19, 2021

  • The ongoing integrated cash transfer and human capital development (PITCH) project enabled the rapid deployment of cash and in-kind transfers during the first wave of the pandemic in early to mid-2020 and its ensuing lockdown: 27,567 poor and vulnerable households—nearly 154,000 people—living in Djibouti city and Balballa, each received food vouchers worth 30,000FD ($170) over three months. At the same time, cash transfers to 12,300 households in rural and urban areas have continued, of which 4,888 were financed by the Bank. PITCH has also launched accompanying measures for cash transfer beneficiaries to boost human capital development: These include information sessions on key themes, such as nutrition, education, health, and gender-based violence—as well as medical care, provided on the spot at the time of quarterly cash transfer payments through a partnership with the Ministry of Health.

    The project is helping the government continue the development of a national, social registry, which serves as a gateway to nine different social programs, including subsidized health insurance, social housing, food assistance, and cash transfers. The social registry now contains data on 85,147 households, over 1/3 of the population. PITCH is assisting the government to realize its goal of including refugees in the social registry, so that their eligibility for social programs can be determined—to date, 756 refugee households have been added to the registry, with an end of project goal of 1,500.

    Finally, the project is putting in place a new community-driven development program that aims to boost access to human capital-related infrastructure in the interior of the country. So that communities can be empowered to identify and execute their sub-projects, a community training program is being developed through a knowledge exchange process with Beninese and Senegalese experts. Sub-project execution is expected to begin in several months in 60 selected sites. The program is being implemented in partnership with Djibouti’s Secretariat of State for Decentralization, regional authorities, and the Djibouti Agency for Social Development (ADDS) to promote the greater decentralization of government functions in a highly participatory and transparent manner. 

    Interventions by the Regional Development Response to Displacement Impacts Project (DRDIP) have improved access to social and economic services and infrastructure for 97,000 beneficiaries (both nationals and refugees in the Ali Sabieh and Obock regions); of the 33,000 host community beneficiaries, 65% are women. More than 1,300 beneficiaries of economic development activities have reported an increase in income.

    A concrete example is the extension of the main grid lines of the national electricity network to Holl Holl town for 2,700 households (more than 10,000 recipients). The 100 newly installed public lights are testimony to the realization of a 40-year wait for the residents. About 356 houses, 24 village shops, and a range of public facilities, such as the town’s health center, primary (elementary) and secondary (high) schools and community development center, are benefiting from the individual connections currently being established. Major investments include the newly rehabilitated and renovated health center in Ali Addeh, Djibouti, which is serving both refugees and host communities in equal proportion with high-quality health care services. The center is well-staffed and equipped with hospital beds, an X-ray machine, and surgery equipment, in clean premises with well-lit wards.

    The ongoing Improving Health Sector Performance project has increased the use of quality health care services for maternal and child health. So far, over 300,000 beneficiaries have received quality health care services; more than 90,000 women have received two to four prenatal visits; and 85% of children have been fully immunized before their first birthday. Five primary level community health centers have been upgraded to secondary level polyclinics providing 24-hour emergency and delivery care and outpatient services for a population of close to 100,000.

    • COVID-19 Response Project and the CERC of Towards Zero Stunting project 

    The first case of Covid-19 was discovered in Djibouti in mid-March 2020. The virus had infected over 6,000 people by end-February 2021, with almost the same number treated. The country recorded 63 deaths. Following a seven-week general lockdown, closed land and air borders, and a rigorous testing campaign with more than 100,000 tests done, Djibouti was able to substantially control the first wave of the pandemic. The Djibouti Covid-19 response contributed to that effort and achieved great results in a short amount of time. 

    Specific results include:

    • 27,567 households—nearly 154,000 people—received food vouchers, and another 4,888 households—or about 29,000 people—received cash transfers during the first COVID-19 outbreak and ensuing lockdown.
    • 4,305 COVID-19 patients and 125 health workers have directly benefited from the supplies and equipment procured through two IDA projects, namely COVID-19 Response Project and the CERC of Towards Zero Stunting project.
    • 97,000 beneficiaries (both nationals and refugees in the Ali Sabieh and Obock regions) benefited from improved access to social and economic services, and infrastructure.
    • 10,000 beneficiaries in Holl Holl town accessed electricity through the extension of the main grid to villages.
    • 1,000 beneficiaries in five poor neighborhoods in Obock received an individual electricity connection. 
    • 667 beneficiaries benefited from livelihood program activities, including 328 women and 339 youth. Beneficiaries have received extensive training and livelihood support, including livelihoods’ grants.
    • Over 300,000 beneficiaries received quality health care services; more than 90,000 women received two to four prenatal visits.
    • The rehabilitation of two health facilities (Bouffard and PK13) is supported by the IDA projects.
    • 241 health workers have been trained in infection prevention and control and other topics relevant to COVID-19 through the COVID-19 Response Project.
    • Seven health facilities have benefited from medical equipment, consumables and other items financed by the IDA projects: three supported by the COVID-19 project; one supported by the CERC of the Towards Zero Stunting project; and three supported by both the COVID-19 project and the CERC.
    • The test positivity rate peaked at around 16% in May 2020 and has come down considerably to less than 2% in recent months. 

    Last Updated: Apr 19, 2021

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

*Amounts include IBRD and IDA commitments


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