Djibouti Could Unlock $600 Million and 12,000 Jobs Beyond Its Ports

The Government of Djibouti launched the AgriConnect Compact with the World Bank Group, businesses, financial institutions, producer organizations and development partners.

Djibouti's next wave of investment could come from solar power, data centers and tourism, with a new World Bank Group report identifying reforms that could unlock at least US$600 million in private capital and create around 12,000 jobs over five years. The Country Private Sector Diagnostic sets out changes that could help businesses turn the country's natural resources and international connections into wider economic opportunities.

Located along some of the world's busiest shipping routes and serving as Ethiopia's main maritime gateway, Djibouti recorded average annual GDP growth of 5.3 percent between 2016 and 2024 and attracted substantial foreign investment in its ports. High electricity costs, limited business financing, skills shortages and restrictions on competition have constrained private sector expansion, leaving the country with a pressing need to translate economic growth into more employment.

Solar Power Could Cut Business Costs and Create Thousands of Jobs

Electricity is the largest single cost facing businesses in Djibouti, with commercial tariffs of 25 US cents per kilowatt-hour compared with an African regional average of 14 cents. Private investors have installed approximately 10 megawatts of off-grid solar capacity since 2022, and additional projects are being prepared, demonstrating investor interest in alternatives that could help address this burden.

The report identifies potential for up to US$390 million in solar investment and more than 8,500 jobs over five years, supported by reforms that raise limits on self-generation, clarify power purchase arrangements and strengthen sector regulation. Expanded skills development would help prepare workers for opportunities in the sector, connecting efforts to improve energy supply with the need for employment and a more competitive business environment.

Data Centers Could Turn Global Connections Into Local Opportunity

Eight operational submarine cables pass through Djibouti, connecting Asia, Europe and Africa and giving the country a strong foundation for digital services. Existing data center capacity is nearing full utilization, creating an opportunity for further investment if businesses can secure the energy, market access and regulatory conditions needed to expand.

Reforms in these areas could unlock between US$160 million and US$240 million in investment and generate between 700 and 1,300 jobs, according to the diagnostic. Economy and Finance Minister Ilyas Moussa Dawaleh described the broader challenge as turning Djibouti's geographical advantage into productive capacity, linking infrastructure and connectivity with affordable energy, digital services, industry, modern logistics and exports under the country's Vision 2035.

Tourism Could Bring More Investment Into Local Economies

Lake Assal, Africa's lowest point on land, the limestone chimneys of Lake Abbe and marine experiences such as whale shark sightings give Djibouti distinctive attractions for visitors. Its cultural heritage adds to that appeal, with the report identifying potential for between US$66 million and US$180 million in tourism investment and 2,600 jobs through reforms addressing licensing, tourism data and workforce skills.

These changes could help turn investor interest into committed funding, making tourism a stronger source of business activity and employment. World Bank regional Vice President Ousmane Dione highlighted renewable energy, digital connectivity and tourism as opportunities to broaden Djibouti's development story, and IFC Vice President for Africa Ethiopis Tafara described the identified sectors as commercially viable prospects that need clear policy action to encourage private capital.

The diagnostic builds on a World Bank Group partnership with Djibouti dating to 1980, with current commitments close to US$500 million across sectors including energy, transport, digital development, education, health and employment. Its investment and job estimates describe opportunities that reforms could enable, with progress depending on the country's ability to remove barriers and create conditions in which businesses can invest and grow.