Test Debt Guide

Country Debt Guide
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djibouti
Debt History
Djibouti’s economy struggled in the 1990s with
overall negative growth on average in the period
from 1991 to 1999 due to droughts and a civil
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war. Nevertheless, the country did not qualify
for participation in the HIPC initiative as it was
judged not to be heavily indebted. There is also
no public mention of debt relief from China over
the same period.
DJIBOUTI IN 2021
8.5% economic growth
41.7% public debt to GDP ratio
-14.6% budget balance
1/ 8 DR’s Debt Transparency Index
Djibouti’s public debt remained subdued throughout the 2000’s as the fragile nature of the country meant global
creditors are unwilling to extend debt to it.
However, since 2013, external debt has increased fast, peaking at 122% of GDP in 2017, compared to general
government debt of only 48%. The discrepancy between these figures is indicative of the private sector and offbalance-sheet
state owned enterprises engaging in externally financed infrastructure projects.
Since the 2010s, Djibouti has seen an economic boom due to heavy infrastructure investment as well as rising
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trade flows, with annual GDP growth averaging 7.1% from 2015 to 2019. There has been a considerable increase
in government spending on major construction projects, including a railway line and enhanced port activities in
line with Djibouti’s attempts to leverage its strategic position in the Horn of Africa. With most infrastructure in
the hands of state-owned enterprises, the country has had to accumulate substantial debt to finance these
projects: as of 2018, the public debt to GDP ratio stood at 104%. The types of projects Djibouti has initiated with
loans from China and the World Bank are shown below, as a means of illustration.