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Regional Stability and Strong Growth
During its visit ending June 25, 2025, IMF staff concluded that Djibouti continues to display robust economic performance, buoyed by geopolitical calm in the Horn of Africa, sustained growth, tempered inflation, and gradual restoration of reserves. With GDP per capita having roughly doubled over the past decade, investments in port facilities and strategic infrastructure are modernizing the economy.
Despite macroeconomic gains, Djibouti is facing dwindling government revenue streams and increasing debt service obligations that threaten debt sustainability. The IMF mission flagged an unsustainable fiscal trajectory, advising authorities to accelerate fiscal consolidation through improved revenue collection, enhanced oversight of state-owned enterprises (SOEs), and active engagement with creditors.
The report recommends that Djibouti more effectively tap into SOE-generated dividends and push forward with creditor negotiations. Additionally, recent IMF-backed reforms—such as the launch of a national macroeconomic data portal—underscore the country’s growing commitment to transparency and adherence to global fiscal reporting standards.
Djibouti’s reform agenda echoes similar trajectories in other emerging economies. For example, Tanzania recently secured an IMF agreement aimed at strengthening governance, diversifying revenue, and anchoring macroeconomic stability. Likewise, the launch of Djibouti’s National Summary Data Page aligns with broader regional transparency efforts, promoting timely dissemination of public finances and external sector data.
Future Strategies: Transparency, Diversification, Debt Sustainability
The IMF’s concluding statement urges Djibouti to continue fiscal consolidation, emphasizing efficiency in tax collection and reducing unnecessary exemptions. Authorities are also encouraged to strengthen governance in SOEs to capture their full dividend potential and curb quasi-fiscal losses. Maintaining dialogue with creditors to restructure external debt and clear outstanding obligations, as well as sustaining investment in human capital and infrastructure to diversify growth beyond port services, are among the key recommendations.
These recommendations build on previous reviews that praised Djibouti’s resilience—especially during regional turmoil—but warned of fiscal vulnerabilities without decisive reform.
As Djibouti charts its economic future, there’s renewed focus on transforming short-term growth into long-term resilience. With alignment to international standards, enhanced data transparency, and a governance-driven approach to public finances, the country is positioned to secure debt stability, optimize SOE performance, and bolster private-sector expansion. The next IMF review will assess how effectively these commitments are translated into policy and measurable outcomes.
