Djibouti country climate and development report

Djibouti is facing important climate challenges, including extreme heat, increased floods and droughts, and rising sea levels which threaten its coastal economy. Climate impacts undermine water security, increase the prevalence of climate sensitive diseases like malaria, and strain livelihoods. Without investments in adaptation, Djibouti could face annual climate-related economic damages equivalent to 6 percent of its GDP by 2050. However, with reforms and investments to promote resilience, Djibouti can leverage its significant infrastructure assets to mitigate these risks, safeguard vulnerable populations, and protect Djibouti's pivotal role as a trade hub for the Horn of Africa.

This report argues that policies and investments aimed at climate adaptation can reduce economic damages and help to build systems that protect livelihoods; a limited set of priority actions could halve the potential GDP losses in Djibouti. While significant infrastructure investments have laid a foundation for resilience and economic diversification, the country must now ensure that these assets deliver on their promise. Capacity building, economic reform, and an emphasis on skills are critical to successful adaptation while building resilience will require additional concessional resources, in the context of reform to ensure their effective use.