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DJIBOUTI CITY, September 13, 2026 – The World Bank Group today released a Country Private Sector Diagnostic (CPSD) for Djibouti, identifying reforms that could unlock at least US$600 million in private investment and create around 12,000 jobs over five years in off-grid solar energy, data centers, and tourism. The report outlines targeted policy actions that would enable such investment.
Positioned at the intersection of some of the world’s busiest shipping lanes and serving as the primary maritime gateway for Ethiopia, Djibouti has seen GDP growth average 5.3 percent annually from 2016 to 2024 and has attracted substantial foreign direct investment in port infrastructure. Yet high electricity tariffs, limited access to finance, skills gaps, and restrictions on competition in key sectors have constrained private sector expansion. With unemployment remaining high, the CPSD identifies opportunities to create jobs in strategic sectors.
Solar Energy: Up to $390 Million and more than 8,500 Jobs
Private investors have deployed approximately 10 megawatts of off-grid solar capacity in Djibouti since 2022, with additional projects in preparation. Commercial electricity tariffs at 25 US cents per kilowatt-hour – against an Africa regional average of 14 cents – are the largest single cost factor for businesses operating in the country. The CPSD identifies targeted regulatory reforms, including raising self-generation limits, clarifying power purchase arrangements, strengthening sector regulation, and expanding skills development to attract private investment. Together, this could attract up to $390 million in investment and create more than 8,500 jobs over five years.
Data Centers: Up to $240 Million and 1,300 Jobs
Eight operational submarine cables run through Djibouti, connecting Asia, Europe, and Africa. Current data center capacity is nearing full utilization. The CPSD identifies reforms to the regulatory framework, energy provisioning, and market access that would unlock private investment in the sector, with potential for between $160 million and $240 million in investment and between 700 and 1,300 new jobs.
Tourism: Up to $180 Million and 2,600 Jobs
Djibouti’s tourism assets include Lake Assal (the lowest point on land in Africa), the limestone chimneys of Lake Abbe, marine ecotourism such as whale shark sightings, and a cultural heritage recognized when Djibouti City became the first African metropolis named World Capital of Culture and Tourism by the European Council on Tourism and Trade. The CPSD identifies licensing, data, and skills reforms that would convert investor interest into committed capital, with potential for between $66 million and $180 million in investment and 2,600 jobs.
- Djibouti must now move from an economic model that monetizes its strategic location to one that transforms this geographical advantage into productive capacity. By combining infrastructure and connectivity with affordable energy, industry, digital services, modern logistics, and exports, we can open a new chapter of development. This diagnostic identifies the reforms needed to unlock private investment and accelerate the structural economic transformation envisioned under Vision 2035.
