Djibouti

AFD Group has been present in Djibouti since 1974 and deploys a range of financing instruments to support urban development, human capital strengthening and economic activity. Our aim is to support the country in implementing public policies to sustainably improve the lives of its inhabitants, particularly the most vulnerable.

Context

The Republic of Djibouti is a country of 23,200 km² in the Horn of Africa, located at the mouth of the Red Sea. With no natural resources and a tropical semi-desert climate, the country’s key asset is its geographical position, which it utilizes by developing port and telecommunications activities, particularly with Ethiopia.

This positioning also allows it to host military bases, which are a source of stability in a region prone to conflict. The government’s strategy is to develop an economy that generates jobs, through the creation of a logistics and services platform that will attract regional and international private companies.
Since 2014, the State has been formulating a long-term development vision ‘Djibouti 2035’, in a broad participatory approach. This planning strategy aims to get the country out of emergencies, and thus build sustainable development.

AFD has been present in Djibouti since 1974 and supports the country’s development and the improvement of its inhabitants’ living conditions in three priority areas: sustainable urban development, economic development and support for the private sector, and human capital.

We support the government through subsidies and public and private companies through a wide range of tools, from subsidies to non-sovereign loans, credit lines and guarantees, technical assistance and capacity building programs, as well as equity investments. Since 2010, AFD has invested over €200 million in the country.

AFD's Djibouti office is directly attached to the East Africa regional office in Nairobi.

Our approach

"AFD AND DJIBOUTI: INVESTING IN SOLIDARITY AND REDUCING INEQUALITY"

AFD is financing the modernization of precarious neighborhoods in the municipality of Balbala. This program enables residents to improve their living conditions through the construction of new urban infrastructure (access roads, markets, police station, etc.) and improved access to essential services (water, electricity). It also contributes to strengthening the associative and economic capacities of the inhabitants.

As solid waste management is crucial to urban development, a pilot project for pre-collection and waste disposal has been set up in the commune of Balbala and continues to be supported through urban redevelopment projects. In addition, the Republic of Djibouti, the European Union and AFD are working together on the construction of a Technical Waste Disposal Center (TDC) compliant with international standards.

To improve sanitary conditions in the city of Djibouti, AFD and the European Union are also financing the improvement of the liquid sanitation system by extending wastewater collection networks and increasing the treatment capacity of one wastewater treatment plant. A program to strengthen the national water and sanitation operator (ONEAD) will also improve the quality and sustainability of its services.

Finally, to improve the delivery of local public services, AFD is supporting the Djibouti City Council and its three communes in their decentralization process, by creating an environment that is favorable to the operationalization of an effective local governance framework between the State, the communities and the citizens.

Education is one of AFD's historical sectors of intervention in Djibouti. The first interventions date back to the early 2000s with the improvement of primary schooling in rural areas. AFD also supported the Ministry of Education in the development of its first master plan, the reform of the entire system through the revision of curricula and textbooks, initial and in-service training for basic education staff and capacity building for the General Inspectorate.

AFD, thanks to delegations of funds from the European Union, has also supported the the professionalization of young people, companies and actors in the port logistics sector, and plans further support on employment issues.

Since 2020, AFD is also supporting the improvement of the quality of higher education and research, and the revitalization of the digital ecosystem through the construction and equipping of a training center for digital, innovation and technology within the University of Djibouti campus, and the strengthening of the capacities of the Higher Institute of Health Sciences.

We have also been working with UNICEF since 2022 to implement, in collaboration with the Ministry of Education and Vocational Training, a project in support of the 2021-2025 Education Action Plan. This will help retain vulnerable girls and adolescents in the Djiboutian education system, especially in the rural areas.

In Djibouti, AFD supports renewable energy and the Djibouti government in its efforts to improve energy management through an energy efficiency project for public buildings.

AFD deploys a wide range of financial instruments to support the country's private sector in order to support the national strategy for wealth and job creation, which is part of the Vision 2035 development strategy. This strategy aims to make the country the "lighthouse of the Red Sea", a trade and logistics hub for East Africa. Proparco, the Group's private sector subsidiary, has also participated in financing port infrastructure, such as the Doraleh container terminal.

Guarantee funds (Ariz/Euriz) for local banks facilitate access to investment loans for small and medium-sized enterprises. Proparco has also supported the growth of the Bank of Africa-Mer Rouge (BOAMR) through equity investments.
We are also supporting the government in a comprehensive financial sector modernization program that aims to develop and strengthen the banking system so that it contributes more significantly to the development of Djibouti's productive sector and to the financial inclusion of vulnerable populations. We also support the Djibouti Post Office in developing accessible and digitalized financial services for universal financial inclusion.

In Djibouti, public companies are an essential link in the economy and employment. AFD supports the government in its strategic role of steering these companies to ensure their good governance, performance and participation in the country's economic transformation process.

Djibouti Télécom has also benefited from several direct loans to lay submarine fiber optic cables. These investments should eventually enable Djibouti to become a regional telecommunications hub.