• World Bank approves $25.75M to support Djibouti diversification
• Programme targets SMEs, investment climate and state enterprise governance
• Funding tied to reforms, part of $75.75M long-term plan

The World Bank approved $25.75 million in financing from the International Development Association (IDA) to support Djibouti’s Economic Diversification Programme, the institution said on Monday, March 30.

This is the country’s first Program-for-Results (PforR) financing operation. The programme aims to expand economic opportunities, strengthen the private sector and create jobs for Djiboutians.

The programme has three main components. The first focuses on improving the governance of state-owned enterprises and access to public procurement. The second aims to strengthen the business and investment climate. The third seeks to boost the competitiveness of small and medium-sized enterprises (SMEs) through better access to finance and business development services.

“Djibouti’s economic diversification is no longer a choice or a distant ambition. It is a strategic necessity that will shape our future,” said Ilyas Moussa Dawaleh, Djibouti’s Minister of Economy and Finance in charge of Industry. “We must move away from traditional models based on ports and foreign military bases and build a resilient, competitive and investment-driven economy,” he added.

Djibouti’s economy relies heavily on revenue from port activities, supported by its strategic location on the Red Sea, as well as income linked to foreign military bases. This concentration leaves the country vulnerable to external shocks and constrains job creation. According to the World Bank, port traffic fell by 10.5% in the first half of 2025 as transshipment volumes dropped sharply amid a slowdown in global trade.

Under its 2025-2030 National Development Plan, Djibouti aims to accelerate economic diversification, empower young people and promote more balanced regional development. According to the World Bank, the energy and digital sectors will be critical to achieving that goal.

The disbursement marks the first stage of a long-term partnership between Djibouti and the World Bank Group, with total financing of $75.75 million planned for the 2026-2034 period. The funds will be released progressively, depending on the implementation of reforms and the achievement of clearly defined targets, to ensure measurable results.

Lydie Mobio