{
  "title": "Press Release: IMF Approves ESAF Loan for Djibouti",
  "publication": "IMF News, October 18, 1999",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9950",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9950",
  "overlayPath": "/en/news/articles/2015/09/14/01/49/pr9950/index.md",
  "summary": "IMF approved a three-year loan for Djibouti under the Enhanced Structural Adjustment Facility (ESAF) in an amount equivalent to SDR 19.082 million (about US$26.5 million) to support the government's three-year economic reform program beginning July 1999.",
  "publishDate": "1999-10-18",
  "sections": [
    {
      "heading": "Loan approval and terms",
      "content": "- IMF approved a three-year loan for Djibouti under the Enhanced Structural Adjustment Facility (ESAF) in an amount equivalent to SDR 19.082 million (about US$26.5 million) to support the government's three-year economic reform program beginning July 1999.\n- The first annual loan will be disbursed in three installments.\n- The first installment in an amount equivalent to SDR 2.726 million (about US$3.8 million) will be available shortly.\n- Footnote on ESAF terms: ESAF loans carry an interest rate of 0.5% and are payable over 10 years with a 5 ½-year grace period."
    },
    {
      "heading": "Executive Board commentary (statement by Mr. Shigemitsu Sugisaki, Deputy Managing Director)",
      "content": "- Directors welcomed Djibouti's decision to pursue a comprehensive medium-term adjustment program under the ESAF arrangement to:\n  - accelerate growth,\n  - raise employment levels,\n  - reduce poverty, and\n  - strengthen the external position.\n- Directors commended intentions to continue a tight fiscal policy stance while increasing outlays for social programs and infrastructure investment.\n- Directors underscored the need to provide adequate expenditure allocations for health, education and social safety nets.\n- Fiscal implementation requirements emphasized:\n  - steadfast implementation of the envisaged tax reform program,\n  - containment of non-priority expenditures—particularly through reductions in the wage bill and the implementation of the demobilization and civil service reform programs,\n  - acceleration of the settlement of arrears in a timely manner.\n- Structural reform priorities urged:\n  - pressing ahead with the privatization program,\n  - freeing up markets—including in particular the labor market,\n  - reforms in tax, pension, and financial sector,\n  - legal reforms to support market functioning.\n- Directors recognized:\n  - the ambitious reform agenda is a major challenge,\n  - timely financial assistance on concessional terms and substantial technical assistance from the international community would be essential for success."
    },
    {
      "heading": "Program summary — macroeconomic context and objectives",
      "content": "- Progress during 1996-98 under IMF-supported reform program:\n  - inflation declined, and in 1998 the price level was relatively stable.\n  - structural measures implemented: demobilization of military and security personnel, civil service downsizing, reduction in the government wage structure, and banking system reforms.\n- Medium-term reform program aims:\n  - establish an environment conducive to private sector-led growth,\n  - enhance the country's social indicators,\n  - restructuring to accelerate economic growth and raise per capita income, increase employment, reinforce domestic financial stability, and strengthen the external position.\n- Macroeconomic objectives for 1999-2002:\n  - real GDP growth of 3% on average,\n  - annual inflation limited to 2%,\n  - overall balance of payments deficit contained at 2.5% of GDP on average.\n- Medium-term fiscal stance:\n  - pursue fiscal restraint to limit the budget deficit to 3% of GDP on average."
    },
    {
      "heading": "Structural reform measures",
      "content": "- Tax, revenue administration, and budget management reforms.\n- Completion of the demobilization program; adoption of a retirement program; civil service reform to ensure further lowering of the wage bill.\n- Reorientation of budget outlays toward priority purposes—particularly education and health sectors and social safety nets.\n- Pension fund reform; banking sector reforms.\n- Significant privatization program; deregulation; legal reforms—including labor and commercial codes and establishment of commercial courts."
    },
    {
      "heading": "Social issues and anti-poverty measures",
      "content": "- Poverty reduction strategy components:\n  - higher economic growth,\n  - increased outlays for education and health and the social safety net.\n- Specific programs:\n  - employment-creation program to be implemented over 2000-03,\n  - re-insertion program to provide training for demobilized personnel,\n  - Social Fund Program to address rehabilitation of education and health infrastructure."
    },
    {
      "heading": "Country IMF membership and outstanding use",
      "content": "- Djibouti joined the IMF on December 29, 1978 and its quota is SDR 15.90 million (about US$22.08 million).\n- Its outstanding use of IMF financing currently totals SDR 6.91 million (about US$9.60 million)."
    },
    {
      "heading": "Selected economic and social indicators (1995–2002; values as presented)",
      "content": "- National income and prices (annual percentage changes)\n  - GDP at current prices: 0.7; 1.2; 1.6; 1.8; ...; 3.5; 4.4; 5.2; 6.3\n  - GDP at constant prices: -3.6; -1.5; 0.0; 1.7; 1.4; 2.3; 3.2; 4.3\n  - Consumer prices (annual average) 1/: 4.5; 2.6; 0.1; 2.0\n- Government finance (In percent of GDP)\n  - Total revenue and grants: 31.1; 30.6; 31.0; 34.2; 13.8; 34.4; 36.2; 34.9; 34.5\n  - Revenue: 29.1; 28.8; 27.2; 25.4; 10.2; 25.2; 26.3; 26.8; 27.0\n  - Grants: 3.8; 8.9; 3.6; 9.2; 9.9; 8.1; 7.6\n  - Total expenditure: 39.2; 35.3; 33.4; 16.7; 34.8; 35.5; 35.0\n  - Current expenditure: 35.6; 26.7; 14.9; 30.2; 30.0; 28.9; 29.5\n  - Capital expenditure: 3.7; 3.9; 6.7; 4.6; 5.5\n  - Overall balance (payment order basis): -8.1; -3.9; -4.3; 0.9; -2.8; -0.4; 0.5; -0.5\n  - Change in arrears (decrease-): -0.7; 2.4; -0.8; -1.2; -4.5\n  - Overall balance (cash basis): -4.9; -4.6; -1.9; -1.6; -3.8; -3.3\n  - Government domestic arrears (stock) 2/: 23.1; 22.0; 23.9; 22.9; 23.8; 20.8; 13.6\n  - Government domestic debt 3/: 18.7; 19.0; 18.8; 17.6; 17.8; 17.2; 19.4; 20.7; 21.2\n- Money and credit (Change in percent of broad money)\n  - Money and quasi-money: 3.3; -10.0; -1.4; 8.2; 0.2; 2.2; 5.4; 5.8; 6.4\n  - Net foreign assets: -10.3; -4.0; -2.6; -2.0; -0.9; 0.4; 0.8\n  - Net domestic assets: 6.9; 2.7; 10.7; 3.1; 5.0; 5.6\n  - Claims on the central government (net): -1.1; 0.6; 2.1\n  - Claims on nongovernment sector: 8.0; -0.3; 11.2; 6.1; 2.8\n- Interest rates (in percent)\n  - Lending rates: 9.4-13.1; 9.5-13.3; 9.2-12.4; 13.0-14.0; …\n  - Deposit rates: 4.2-6.0; 2.1-4.0; 3.6-6.0; 3.6-4.0\n- External Sector (In millions of U.S. dollars; unless otherwise indicated)\n  - Exports: 37.6; 39.6; 42.6; 59.1; 65.0; 70.2; 75.9; 82.4\n  - Locally produced goods: 13.7; 12.9; 13.9; 14.7; 16.0; 17.1; 18.5\n  - Re-exports: 24.0; 25.9; 29.7; 45.3; 50.3; 54.2; 58.8; 63.9\n  - Imports: 206.8; 200.7; 204.0; 238.8; 242.9; 254.4; 259.9; 272.8\n    - For domestic use: 178.7; 171.0; 174.7; 190.8; 193.4; 201.0; 202.0; 209.9\n    - For re-export: 28.1; 29.2; 48.0; 49.5; 53.4; 57.9; 62.8\n  - Services (net): 85.9; 82.3; 85.5; 85.6; 62.0; 62.7; 70.6; 83.1\n  - Income (net): 17.3; 15.7; 12.2; 11.7; 12.5; 12.4\n    - Of which: Interest obligations: -3.7; -5.0; -6.5; -6.3; -6.7; -7.0; -7.3\n  - Transfers (net): 49.0; 46.9; 52.2; 67.9; 70.8; 73.3; 65.4; 61.5\n    - Of which: Official transfers: 60.1; 57.0; 61.0; 72.2; 74.9; 77.1; 68.7; 64.5\n  - Current account: -17.0; -16.3; -11.5; -14.4; -32.9; -35.9; -35.5; -33.4\n  - Overall balance: -34.0; -12.0; -11.4; -15.0; -14.2; -14.0; -11.0\n- Memorandum items:\n  - Currency board gross foreign assets (In millions of U.S. dollars): 71.4; 77.0; 67.8; 64.4; 71.5; 75.1; 78.8\n  - Monetary and LOLR cover (in percent): 115.6; 122.2; 113.1; 111.8; 113.7; 118.1; 116.9; 117.3; 116.5\n  - Commercial bank gross foreign assets (In months of imports for domestic use): 10.0; 8.6; 7.2; 7.1; 7.3\n  - Commercial bank gross foreign assets (In percent of GDP): -3.5; -2.3; -6.2; -6.1; -5.4; -6.9; -2.4; -2.2; -1.8\n  - Official debt 4/: 265.3; 284.3; 316.6; 337.0; 352.6; 368.1; 382.9; 398.3; 54.1; 57.3; 65.7; 66.4; 64.2\n  - Debt service ratio 5/:\n    - To current account receipts: 4.9; 5.3; 5.9; 5.7\n    - To exports of goods and services 6/: 7.5; 9.8; 10.1; 9.1; 8.5\n- Social and demographic indicators\n  - Population: 660,000 (1996 estimate); rate of growth 3 percent\n  - Unemployment rate: 40 percent (51 percent for under 20 years of age)\n  - Life expectancy: 50 years (at birth)\n  - Infant mortality rate: 106 (per 1,000 live births)\n  - Medical access: 1 physician per 5,900 people (1991)\n  - Education: Pupil-teacher ratio: 47.2 (primary school); gross enrollment ratio: 14 percent (of secondary school age children)\n\nSource: IMF Press Release No. 99/50, October 18, 1999; Annex: Program Summary and Selected Economic and Social Indicators.\n\n---\n\n\n References\n\n- Djibouti and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9950"
    }
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    "Published: October 18, 1999",
    "IMF approved a three-year loan for Djibouti under the Enhanced Structural Adjustment Facility (ESAF) in an amount equivalent to SDR 19.082 million (about US$26.5 million) to support the government's three-year economic reform program beginning July 1999.",
    "The first annual loan will be disbursed in three installments.",
    "The first installment in an amount equivalent to SDR 2.726 million (about US$3.8 million) will be available shortly.",
    "Footnote on ESAF terms: ESAF loans carry an interest rate of 0.5% and are payable over 10 years with a 5 ½-year grace period.",
    "Directors welcomed Djibouti's decision to pursue a comprehensive medium-term adjustment program under the ESAF arrangement to:",
    "Directors commended intentions to continue a tight fiscal policy stance while increasing outlays for social programs and infrastructure investment.",
    "Directors underscored the need to provide adequate expenditure allocations for health, education and social safety nets.",
    "Fiscal implementation requirements emphasized:",
    "Structural reform priorities urged:",
    "Directors recognized:",
    "Progress during 1996-98 under IMF-supported reform program:",
    "Medium-term reform program aims:",
    "Macroeconomic objectives for 1999-2002:",
    "Medium-term fiscal stance:",
    "Tax, revenue administration, and budget management reforms.",
    "Completion of the demobilization program; adoption of a retirement program; civil service reform to ensure further lowering of the wage bill.",
    "Reorientation of budget outlays toward priority purposes—particularly education and health sectors and social safety nets.",
    "Pension fund reform; banking sector reforms.",
    "Significant privatization program; deregulation; legal reforms—including labor and commercial codes and establishment of commercial courts.",
    "Poverty reduction strategy components:",
    "Specific programs:",
    "Djibouti joined the IMF on December 29, 1978 and its quota is SDR 15.90 million (about US$22.08 million).",
    "Its outstanding use of IMF financing currently totals SDR 6.91 million (about US$9.60 million).",
    "National income and prices (annual percentage changes)",
    "Government finance (In percent of GDP)",
    "Money and credit (Change in percent of broad money)",
    "Interest rates (in percent)",
    "External Sector (In millions of U.S. dollars; unless otherwise indicated)",
    "Memorandum items:",
    "Social and demographic indicators",
    "[Djibouti and the IMF](http://www.imf.org/external/country/DJI/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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