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The road map describes Djibouti's economy as a location. Ports, Ethiopian transit, the Addis–Djibouti railway and rents from six foreign military bases produce growth of about 6% a year, a current-account surplus, inflation under 2% behind a currency board in place since 1949, and income per head near USD 3,700. Red Sea rerouting has made it a stronger transshipment and naval hub.
The balance sheet tells a different story. Public debt of 67–69% of GDP is mostly external and owed largely to China Eximbank for railway and port infrastructure financed on commercial terms against transit revenue that has fallen short of projections. Debt service on the railway loan has been suspended since 2024, so the IMF and World Bank classify Djibouti as in debt distress. Reserves of USD 390 million cover 2.6 months of imports, which is thin for a currency board. Ethiopia accounts for roughly 90% of port traffic and is seeking other sea access. Unemployment is about 26% and youth unemployment exceeds 60%.
The paper calls Djibouti a Category 2 sovereign because its geography pays its bills, and a Category 3 debtor because it borrowed against that geography faster than it could collect. The road map aims to convert a rent into an economy: restructure the debt, diversify the customer base and spend the surplus on a population the rent has not reached.
Key findings
- The urgent step is converting the 2024–27 debt-service suspension into a formal restructuring of the railway and port loans, including the Ethiopian counterparty, possibly anchored by an IMF arrangement.
- The port authority, railway, airport and utilities would enter a published general-government balance sheet, with no new sovereign guarantees unless they pass a debt-strategy test.
- Client diversification through transshipment, bunkering, ship repair and free-zone logistics would bring Ethiopia below 60% of port traffic.
- Base rents would go into a stabilisation fund, while revenue excluding rents rises from about 12% to 16% of GDP through free-zone, property and VAT measures.
- Reserves would rise from 2.6 to four months, about USD 250 million more, to strengthen the 77-year-old peg.
- By years three to five, the targets are external debt below 50% of GDP, a first rating and a small regional bond.
Summary of the paper; the full analysis is in the PDF.