{
  "title": "IMF Staff Completes 2023 Article IV Mission to Djibouti",
  "publication": "IMF News, January 25, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission",
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  "summary": "Strong rebound in activity in 2023 but regional geopolitical developments pose important risks to continued recovery.",
  "publishDate": "2024-01-25",
  "sections": [
    {
      "heading": "Mission and context",
      "content": "- Press Release No. 24/25\n- Mission dates: January 14-25.\n- End-of-Mission statement date: January 25, 2024.\n- Lead IMF team member: Joyce Wong.\n- Statement type: End-of-Mission press release conveying preliminary findings; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board."
    },
    {
      "heading": "Growth and recent performance",
      "content": "- Djibouti became the main port of transit to Ethiopia; GDP growth averaged over 6 percent in 2013–2019.\n- Growth in 2023:\n  - Rebounded to around 7 percent in 2023.\n  - Supported by stronger than projected port traffic and the construction sector.\n  - Port traffic grew at 31 percent up to end-September 2023.\n- Inflation:\n  - Estimated to have slowed to 3.6 percent in November 2023.\n  - Decline aided by lower energy and telecommunications costs.\n- Staff projection:\n  - Recovery expected to continue in 2024, albeit at a lower pace and subject to significant risks stemming from the situation in the Red Sea and developments in Ethiopia."
    },
    {
      "heading": "Fiscal position and public debt",
      "content": "- Debt level:\n  - Debt reached 68 percent at end 2022.\n- Key actions and needs:\n  - Finalizing the preliminary agreement on debt reprofiling with the main creditor would open a window of opportunity to develop a sustainable strategy for public finances in the medium term.\n  - Creation of the public debt committee centralizes approvals for all public sector debt to enhance controls over borrowing.\n  - A clear medium-term vision for fiscal policy, backed by the highest authorities, is needed to ensure policy coherence and support revenues.\n  - Recommended centralization of control over fiscal policy, including:\n    - Creation of a tax policy unit in the Ministry of Budget.\n    - Unification of the legal framework for tax policy under the tax code.\n  - Ongoing review of military base leases should ensure fair value today and include an indexation mechanism to protect future revenues.\n  - Caution advised on continuing untargeted fuel subsidies as inflation subsides, given deep development needs."
    },
    {
      "heading": "Revenue administration and anti‑money laundering",
      "content": "- Revenue measures:\n  - Planned creation of a large taxpayers’ unit.\n  - Continued digitalization of revenue administration to improve tax collection.\n- AML/CFT:\n  - Upcoming MENAFATF evaluation and related reforms supported by IMF technical assistance would further enhance the country’s AML/CFT framework."
    },
    {
      "heading": "Statistics and data capacity",
      "content": "- Positive developments:\n  - Increase in human resources of the statistical agency.\n  - Ongoing census."
    },
    {
      "heading": "State-Owned Enterprises, Sovereign Wealth Fund, and governance",
      "content": "- Role:\n  - SOEs and the Sovereign Wealth Fund should play a key role in supporting inclusive growth given limited budget resources.\n- Governance and management recommendations:\n  - Accelerate implementation of the Code of Good Governance.\n  - Empower the Executive Secretariat of the State Portfolio with strong political buy-in and adequate resources.\n  - Ensure transparent financial reporting for all SOEs and adopt a clear dividend policy tied to mutually agreed performance parameters.\n  - Support authorities’ plans to consolidate administrative SOEs and urge acceleration of the technical work.\n  - Strong corporate governance and financial transparency are essential to attract private interest, especially as the authorities commit to lowering telecoms costs, including further liberalizing the sector."
    },
    {
      "heading": "Employment and private sector constraints",
      "content": "- Key constraints to increasing employment:\n  - High telecom costs.\n  - High energy costs.\n  - Weak private sector job creation.\n  - Informality.\n- Authorities’ commitments:\n  - Lowering telecoms costs through further liberalization of the sector."
    },
    {
      "heading": "Risks and policy priorities",
      "content": "- Main risks:\n  - Regional geopolitical developments, notably the situation in the Red Sea and developments in Ethiopia, pose important risks to the recovery.\n- Policy priorities to strengthen resilience:\n  - Overhaul the growth model to be more resilient.\n  - Build fiscal buffers.\n  - Enhance governance across public finances and SOEs.\n  - Finalize debt reprofiling with main creditor to provide medium-term relief and space for durable public finance strategy.\n\nInternational Monetary Fund — IMF staff statement, January 25, 2024.\n\n---\n\n\n References\n\n- Djibouti and the IMF\n- The Federal Democratic Republic of Ethiopia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission"
    }
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    "Published: January 25, 2024",
    "Press Release No. 24/25",
    "Mission dates: January 14-25.",
    "End-of-Mission statement date: January 25, 2024.",
    "Lead IMF team member: Joyce Wong.",
    "Statement type: End-of-Mission press release conveying preliminary findings; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.",
    "Djibouti became the main port of transit to Ethiopia; GDP growth averaged over 6 percent in 2013–2019.",
    "Growth in 2023:",
    "Inflation:",
    "Staff projection:",
    "Debt level:",
    "Key actions and needs:",
    "Revenue measures:",
    "AML/CFT:",
    "Positive developments:",
    "Role:",
    "Governance and management recommendations:",
    "Key constraints to increasing employment:",
    "Authorities’ commitments:",
    "Main risks:",
    "Policy priorities to strengthen resilience:",
    "[Djibouti and the IMF](http://www.imf.org/external/country/DJI/index.htm)",
    "[The Federal Democratic Republic of Ethiopia and the IMF](http://www.imf.org/external/country/ETH/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[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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