IMF approves new grant

The International Monetary Fund (IMF) has released about US $3.6 million to Djibouti, after praising recent privatisation of the management of Djibouti’s port. But the lending agency warned that problems with Djibouti’s weak economy were “exacerbated by the drought affecting Eastern Africa”. The US $3.6 grant, under the Poverty Reduction and Growth Facility, brings total disbursements under a three-year programme to about US $7.2 million. In a statement on 25 July, Eduardo Aninat, the IMF’s Deputy Managing Director and Acting Chairman, praised the Djibouti government for having “taken steps to address recent fiscal slippages”. He said it had made progress on the structural front “through the recent privatisation of the management of Djibouti’s port” - managed since June by a Dubai company. Djibouti’s debt had been rescheduled in order to make an “important financial contribution to Djibouti’s adjustment and reform efforts”, said the statement. But Aninat warned that Djibouti’s economy was suffering as a result of the regional drought, which had caused migration and increased urban poverty: “Djibouti’s rate of economic growth remains weak, unemployment is high, and the social problems arising from widespread poverty are being exacerbated by the drought affecting Eastern Africa.” Djibouti city has been swamped in the last two years by people from neighbouring countries affected by drought, as well as people suffering the effects of increased internal displacement.