## IMF Staff Completes 2023 Article IV Mission to Djibouti

_IMF News, January 25, 2024_

## Source details

**Canonical URL:** [IMF Staff Completes 2023 Article IV Mission to Djibouti](https://www.imf.org/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission)

## Other formats

- [Markdown version](/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission/index.md)
- [Structured JSON version](/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission/index.json)
- [Bundle manifest](/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission/bundle-manifest.json)

## Bibliographic details
- Published: January 25, 2024

---

### Mission and context
- 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.

### Growth and recent performance
- Djibouti became the main port of transit to Ethiopia; GDP growth averaged over 6 percent in 2013–2019.
- Growth in 2023:
  - Rebounded to around 7 percent in 2023.
  - Supported by stronger than projected port traffic and the construction sector.
  - Port traffic grew at 31 percent up to end-September 2023.
- Inflation:
  - Estimated to have slowed to 3.6 percent in November 2023.
  - Decline aided by lower energy and telecommunications costs.
- Staff projection:
  - 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.

### Fiscal position and public debt
- Debt level:
  - Debt reached 68 percent at end 2022.
- Key actions and needs:
  - 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.
  - Creation of the public debt committee centralizes approvals for all public sector debt to enhance controls over borrowing.
  - A clear medium-term vision for fiscal policy, backed by the highest authorities, is needed to ensure policy coherence and support revenues.
  - Recommended centralization of control over fiscal policy, including:
    - Creation of a tax policy unit in the Ministry of Budget.
    - Unification of the legal framework for tax policy under the tax code.
  - Ongoing review of military base leases should ensure fair value today and include an indexation mechanism to protect future revenues.
  - Caution advised on continuing untargeted fuel subsidies as inflation subsides, given deep development needs.

### Revenue administration and anti‑money laundering
- Revenue measures:
  - Planned creation of a large taxpayers’ unit.
  - Continued digitalization of revenue administration to improve tax collection.
- AML/CFT:
  - Upcoming MENAFATF evaluation and related reforms supported by IMF technical assistance would further enhance the country’s AML/CFT framework.

### Statistics and data capacity
- Positive developments:
  - Increase in human resources of the statistical agency.
  - Ongoing census.

### State-Owned Enterprises, Sovereign Wealth Fund, and governance
- Role:
  - SOEs and the Sovereign Wealth Fund should play a key role in supporting inclusive growth given limited budget resources.
- Governance and management recommendations:
  - Accelerate implementation of the Code of Good Governance.
  - Empower the Executive Secretariat of the State Portfolio with strong political buy-in and adequate resources.
  - Ensure transparent financial reporting for all SOEs and adopt a clear dividend policy tied to mutually agreed performance parameters.
  - Support authorities’ plans to consolidate administrative SOEs and urge acceleration of the technical work.
  - 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.

### Employment and private sector constraints
- Key constraints to increasing employment:
  - High telecom costs.
  - High energy costs.
  - Weak private sector job creation.
  - Informality.
- Authorities’ commitments:
  - Lowering telecoms costs through further liberalization of the sector.

### Risks and policy priorities
- Main risks:
  - Regional geopolitical developments, notably the situation in the Red Sea and developments in Ethiopia, pose important risks to the recovery.
- Policy priorities to strengthen resilience:
  - Overhaul the growth model to be more resilient.
  - Build fiscal buffers.
  - Enhance governance across public finances and SOEs.
  - Finalize debt reprofiling with main creditor to provide medium-term relief and space for durable public finance strategy.

*International Monetary Fund — IMF staff statement, January 25, 2024.*

---


## References

- [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)

_Source: https://www.imf.org/en/news/articles/2024/01/25/pr2425-djibouti-imf-staff-completes-2023-article-iv-mission_