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Extreme heat, droughts, and floods are serious threats to the livelihoods and economic growth of Djibouti. If action isn’t taken quickly, the country could lose up to 6% of its GDP each year by 2050, which is equivalent to nearly four years of current economic output, according to the World Bank’s first Djibouti Country Climate and Development Report (CCDR). The report outlines a clear plan for Djibouti to turn these climate challenges into opportunities for sustainable growth and economic diversification.
Key areas for improvement include investing in infrastructure, ensuring water and food security, and reforming the energy sector. While Djibouti shares similar climate risks with other countries in the region, its position as the main port for the Horn of Africa makes its transport infrastructure vital to the entire region. Additionally, since much of its economic activity happens in the low-lying Djibouti City, protecting it from flooding due to rising sea levels is a top priority.
The International Development Association (IDA), which is the World Bank’s fund for low-income countries, has played a vital role in supporting Djibouti’s development. The Djibouti Country Climate and Development Report (CCDR) highlights how important IDA’s support is in helping the country secure the large investments needed to adapt to climate change over the next 25 years.
Stéphane Guimbert, World Bank Country Director for Djibouti, said in a statement, “Climate change is no longer a distant threat but an immediate challenge for Djibouti. But with identified strategic investments and policy actions, the country can leverage the important investments it has already made to pave the way towards sustainable, low-carbon development, ensuring that its people and its economy are more resilient to climate shocks. The World Bank is committed to supporting Djibouti as it tackles these risks, and builds a resilient economy that benefits all Djiboutian, especially the most vulnerable.”
Ilyas Moussa Dawaleh, Minister of Economy and Finance, in charge of Industry – Republic of Djibouti., mentioned, “This report emphasizes the opportunity for Djibouti to accelerate investments as we move to the goal of 100 percent renewable energy very soon. Our main objective is to reduce energy costs and expand access to it. We must ensure that all Djiboutians benefit from reliable and affordable energy. Djibouti is full of multiple renewable energy resources including solar, wind, geothermal and green hydrogen.”
Djibouti has already made significant infrastructure investments that position it to become a resilient hub for the region, adapt to a hotter and drier climate, and diversify its economy. These investments include improvements in ports, rail, roads, clean energy, water desalination, and a water pipeline. However, the Djibouti Country Climate and Development Report (CCDR) states that further investments, capacity building in public sector management, and policies encouraging private sector involvement are essential to fully benefit from these investments.
The total investment required could exceed $2.8 billion, with $1.1 billion needed for a set of priority adaptation actions. These investments can help Djibouti achieve both growth and debt sustainability, provided there are economic reforms and additional adaptation resources on favorable terms. Given Djibouti’s regional importance, international support is critical for strengthening its economic resilience.
Cheick-Oumar Sylla, IFC’s Director for North Africa and the Horn of Africa, also commented, “Private sector solutions are indispensable to support Djibouti’s climate adaptation and resilience ambitions. Building on recent investments, such as the Goubet wind farm, Djibouti can unlock critical resources to scale green infrastructure, enhance water security, and strengthen its energy transition through an ambitious business climate reform agenda. IFC is committed to working alongside Djibouti to build a pipeline of bankable, climate-smart projects that will drive inclusive growth and safeguard the economy against future climate shocks.” |
