The World Bank Group has approved a US$25.75 million grant from the International Development Association to support the Djibouti Economic Diversification Program, marking the country’s first Program-for-Results financing. The initiative is designed to expand economic opportunities, strengthen the private sector, and create jobs as Djibouti works to reduce reliance on traditional economic models and build a more diversified economy.
This operation represents the first phase of a broader long-term engagement between the World Bank Group and Djibouti, with a total financing envelope of US$75.75 million planned for the period from 2026 to 2034. By linking disbursements to clearly defined reform milestones, the Program-for-Results approach places a strong emphasis on implementation, accountability, and measurable outcomes.
The programme is also notable because it is the first in the region to be co-led by the World Bank and the International Finance Corporation. This joint approach combines public sector reform support with parallel IFC advisory services and investments, creating an integrated platform intended to attract private capital and support long-term job creation through stronger private sector participation.
According to the World Bank Group, the financing reflects the depth and ambition of its partnership with Djibouti. Officials noted that the operation is expected to help translate reforms into practical opportunities for citizens by improving the conditions needed for private investment and sustainable economic growth.
The programme focuses on three main reform areas that align with Djibouti Vision 2035 and the National Development Plan 2025–2030. These include strengthening the governance of state-owned enterprises and improving access to public procurement, enhancing the overall business and investment climate, and increasing the competitiveness of small and medium enterprises through better access to finance and business development services.
Djiboutian officials described economic diversification as a strategic necessity rather than a long-term aspiration. They emphasized that the country must move beyond its historical dependence on ports and foreign military bases in order to build a more resilient, competitive, and investment-driven economy. Through this programme, the government aims to implement structural reforms that unlock private sector potential, attract quality investment, and create more inclusive opportunities for the population.
Overall, the new financing is expected to lay the groundwork for deeper economic reforms in Djibouti while strengthening the role of private enterprise in national development. As the first phase of a multi-year effort, it signals a significant shift toward results-based financing and a more coordinated development model that brings together public sector reform and private sector investment support.
