Djibouti: Fourth Review Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria
Staff Report and Press Release.
Author: International Monetary Fund
Publication Date:
10 Jul 2012
eISBN:
9781475505849
Language:
English
Keywords:
ISCR; CR; ECF arrangement; Extended Credit Facility arrangement; government; position vis-à-vis; Djibouti authorities; government arrears; currency board regime; government transition; Arrears
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The fourth review of Djibouti’s economic performance under the Extended Credit Facility (ECF) arrangement highlights that the authorities maintained fiscal discipline in 2010, but fiscal performance weakened in the first months of 2011. The authorities made progress toward tackling high input costs, which hinder the development of the private sector. The Djibouti authorities remain committed to the IMF program, especially in the areas of fiscal discipline and structural reforms in tax revenue, public financial management, bank supervision, and central bank governance.

Abstract

The fourth review of Djibouti’s economic performance under the Extended Credit Facility (ECF) arrangement highlights that the authorities maintained fiscal discipline in 2010, but fiscal performance weakened in the first months of 2011. The authorities made progress toward tackling high input costs, which hinder the development of the private sector. The Djibouti authorities remain committed to the IMF program, especially in the areas of fiscal discipline and structural reforms in tax revenue, public financial management, bank supervision, and central bank governance.

I. Background

1. As expected, the April elections confirmed President Guelleh for a third term. The constitution was changed last year to allow for unlimited re-election of the president. Mr. Guelleh obtained 80 percent of the votes, with the remainder going to the only other candidate, an independent. Following the crackdown of anti-government demonstrations in February and March, the opposition initially boycotted the elections, but decided just before the polls to support the challenger to Mr. Guelleh. Most ministers in the recently appointed government are new and with a background in the public administration or in business, including the minister of finance.

2. Mr. Guelleh faces difficult challenges at home and abroad. Domestically, his main challenge is to tackle poverty and unemployment and maintain high rates of economic growth. Abroad, he has to manage a delicate balance in the complex regional political situation, particularly in the south vis-à-vis Somalia; in the north with Eritrea, with which the conflict has been suspended thanks to Qatari mediation, but not resolved; and in the east, with a possible humanitarian crisis in Yemen.

II. Recent Economic Developments and Program Performance

3. Economic activity weakened in 2010 but is expected to recover this year. GDP growth in 2010 is estimated at 3½ percent, down from 5 percent in 2009, due mainly to the suspension of port transshipment activity, disappointing foreign direct investment (FDI), and the impact of the devaluation of the birr on transit trade from Ethiopia (Figure 1). Port activity and FDI should rebound in 2011 and push growth to almost 5 percent for the year. The current account deficit fell to about 5 percent of GDP in 2010, but is expected to deteriorate to over 10 percent in 2011 in line with recovering economic activity, international food and fuel prices surge, and FDI-related imports increase (Figure 2).

Djibouti: Main Macroeconomic Indicators, 2008–12

article image
Sources: Djibouti authorities; and IMF staff estimates.

In months of following year’s imports.

However, international reserves of $231 million at end-2010 are projected to rise to over $240 million in 2011 thanks to the expected increase in capital inflows and ECF disbursements. As a result, currency board cover is expected to remain above the program floor of 105 percent.1

4. World food and oil prices are pushing inflation up. Inflation is projected to rise from 4 percent in 2010 to almost 9 percent in 2011, before tapering off to below 2 percent in 2012 as international prices are expected to weaken (Figure 3). In 2011, the acceleration of prices will likely further worsen the real effective exchange rate, which has been appreciating since 2008 due to the strength of the U.S. dollar and the rise in domestic prices (Figure 4).

Figure 1.
Figure 1.

Djibouti: Real GDP Growth, 2001–11

(in percent)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: IMF World Economic Outlook, April 2011.
Figure 2.
Figure 2.

Djibouti: External Sector, 2002–11

(in U.S dollar millions)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: Djibouti authorities; and Fund staff estimates and projections.
Figure 3.
Figure 3.

Djibouti: Domestic and International Food Prices, 2000–11

(average, in percent)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: IMF World Economic Outlook, April 2011; Djibouti authorities; and Fund staff projections.
Figure 4.
Figure 4.

Djibouti: Effective Exchange Rates, 1999–2010

(2005=100)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: IMF Information Notice System.

5. The authorities maintained fiscal discipline in 2010, but fiscal performance weakened in the first months of 2011. The 2010 fiscal deficit matched the program target of 0.5 percent of GDP, thanks to spending discipline in the face of lower-than-expected tax revenues. Also, the authorities avoided extra-budgetary spending. However, they postponed to this year the repayment of some domestic arrears scheduled to be paid in 2010.2 In the first quarter of 2011, fiscal performance was weaker than expected, resulting in a slight deficit, instead of the programmed surplus, due mostly to weak tax and nontax revenue recovery in the run-up to the elections, which was not fully matched by spending cuts. In February and March of this year, the authorities exceeded the ceiling on the stock of domestic arrears by about 0.1 percent of GDP, leading to the nonobservance of the continuous performance criterion on domestic arrears.3 Moreover, mainly owing to capacity and coordination problems in the government, they paid in May external debt service due in March, amounting to about 0.06 percent of GDP to two Paris Club creditors, leading to the nonobservance of the continuous criterion on the non-accumulation of external arrears.

6. After years of strong growth, broad money and credit to the private sector contracted in the first quarter of 2011. This reversal is likely due to capital flight triggered by domestic and regional political instability, the repatriation of some deposits held at the Banque Indosuez Mer Rouge (BIS-MR)4 following its sale to the Bank of Africa (BoA) group, and delays in the execution of projects in the run-up to the elections. But the latest monetary data point to a return of capital, and the recovery of credit and money growth; overall trends for the year are thus expected to be positive (Figures 5 and 6). The banking sector, according to end-2010 indicators, remains overall healthy, with high profitability and nonperforming loans of about 6 percent of total loans.

Figure 5.
Figure 5.

Djibouti: Money and Credit, 2002–11

(year-on-year, in percent)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: Djibouti authorities; and Fund staff estimates and projections.
Figure 6.
Figure 6.

Djibouti: Deposit Growth, 1994–2011

(in DF millions)

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: Djibouti authorities; and Fund staff estimates and projections.

7. The program is broadly on track. All the quantitative performance criteria for end-December 2010 have been met. As described above, in 2011 the authorities however did not observe the continuous performance criteria on the non-accumulation of domestic arrears and the non-accumulation of external arrears. Structural benchmarks were met (including some due end-June 2011) except for the end-March 2011 structural benchmark on a new customs code consistent with COMESA rules, which, due to the government transition, has been approved by the cabinet in June, and the continuous benchmark on web-posting of the fiscal reports, which suffered from delays in preparation of the fiscal data due to the elections.

III. Policy Discussions

8. Discussions focused on the policy challenges facing the authorities during the remainder of 2011. In the real sector, the authorities’ main concerns remain how to tackle unemployment and lower input costs, particularly of energy, and to promote investment and private sector development. In the fiscal sector, the challenges are maintaining fiscal discipline despite the impact of high food and fuel prices on subsidy spending and transfers to the electricity company, and reviving fiscal reform in tax revenue administration and public financial management after the pause of the elections. Public debt issues center on resuming the regular repayment of existing domestic arrears and preventing the new accumulation of external arrears. In the monetary and financial sector, the emphasis is on strengthening bank supervision through the implementation of the new banking law.

A. Employment and Input Costs

9. Tackling unemployment is at the forefront of the new government’s agenda. A recent labor survey confirmed that unemployment rates are extremely high compared to other Middle East and Northern Africa countries (Figure 7), and that unemployment affects in particular the youth (Figure 8). The authorities are strengthening professional education to tackle the mismatch between the labor skills and demand, particularly in the most dynamic sectors of the economy such as the port activities. Aware that the public sector cannot absorb the growing supply of university graduates (Figure 9), they have launched micro financing and loan-guarantee programs to support self-employment of new graduates, especially in the services sector.

Figure 7.
Figure 7.

Unemployment and Labor Force Participation Rates in Selected MCD Countries, 2008

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

1/ The unemployment rate for Djibouti is for 2009.Source: IMF World Economic Outlook, April 2011; World Bank World Development Indicators; and Fund staff estimates.
Figure 8.
Figure 8.

Djibouti: Unemployment by Age Group, 2009

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: Djibouti authorities.
Figure 9.
Figure 9.

Employment by Sector, 2009

Citation: IMF Staff Country Reports 2012, 169; 10.5089/9781475505849.002.A001

Source: Djibouti authorities.

10. The authorities made progress toward tackling high input costs, which hinder the development of the private sector. The interconnection with the Ethiopian electrical grid is now operational, and will help the state-owned energy company Electricité de Djibouti (EDD) absorb losses due to high oil prices (electricity tariffs are set for a breakeven at 75 dollars per barrel) and, later, lower electricity tariffs. EDD is evaluating plans to build a thermal power station, at a cost of $130 million (9 percent of GDP), to replace the existing, ageing facilities.5 In the water sector, the authorities are developing plans to expand the increasingly scarce water supply through desalinization plants.

B. Fiscal Issues

Fiscal policy

11. The authorities are targeting a surplus of 0.4 percent of GDP in 2011, compared to a deficit of 0.1 percent of GDP under the original 2011 program. Given the program objective of improving the government’s position vis-à-vis the banking sector and the slightly worse net external financing prospects, a surplus is needed to allow for the payments of some of the domestic arrears that were to be settled in 2010, and that are now scheduled to be paid in the second and third quarters of 2011. This target is also consistent with maintaining debt sustainability and financing the repayment of the domestic arrears scheduled for 2011.

12. The revised fiscal target is attainable despite a slow first quarter and spending pressures triggered by high commodity prices. Compared to the original program, the revised program balance requires an additional effort of about 0.4 percent of the revised 2011 GDP (which is slightly higher than the original program due to higher deflator). Revenue-side gains will amount to about 0.3 percent of GDP: the authorities expect to make up fully for the disappointing tax revenues in the first months of 2011 and, in addition, count on dividends from state-owned companies projected to be higher than programmed by 0.5 percent of GDP for the year, based on payments already received. These extra revenues will compensate the costs of the recently introduced freeze on diesel pump prices, reflected in nontax revenues lower by 0.2 percent of GDP. On the expenditure side, net gains of about 0.1 percent of GDP will come from postponing domestically-financed investment for 0.3 percent of GDP, despite the transfer of about 0.2 percent of GDP to cover part of EDD’s losses, which was not included in the 2011 budget.

13. The subsidies on fuel add to the existing food subsidies (Box 1). Based on the available information, subsidies in Djibouti are projected at about 0.8–0.9 percent of GDP in 2011 (up from 0.5 percent in 2009). Subsidies are mostly aimed at softening the impact of high commodity prices on the poor and containing the inflationary pressures from imported prices.

14. The authorities are committed to improving the transparency of direct and indirect subsidies. They agree that subsidies are not a first-best solution, but consider that they are simple and relatively effective instruments to support the poor while targeted social safety nets are developed. To improve transparency, they will attach the budget of the farm program to the future budget laws, starting with the revised 2011 budget law. The authorities also plan to gradually eliminate the diesel subsidies once world oil prices decline sufficiently.

Subsidies

Djibouti’s subsidy programs are mainly aimed at helping the poor by improving access to food and containing the price of food items and transportation. According to available information, Djibouti’s subsidies appear to be relatively small, with an annual cost of about 0.8–0.9 percent of GDP. However, this amount only covers the costs of these programs that have been shared by the authorities with staff. Furthermore, there is very limited tracking of implicit subsidies in smaller programs such as microfinance.

Food

In 2008, the authorities exempted five basic food items (rice, edible oil, sugar, flour and powder milk) from indirect taxes to offset the increase in world food prices. The exemptions, which were never removed, were estimated to produce a loss of revenues amounting to $5 million in 2009 (0.5 percent of GDP).

In 2009, the government leased agricultural land in Ethiopia and Sudan to address the population’s structural lack of access to food and stabilize domestic food prices. 3000 hectares in Ethiopia and 2000 hectares in Sudan were leased free of charge for 45 (renewable) years to grow wheat, sorghum, and vegetables for consumption in Djibouti. The program, managed by an agency controlled by the ministry of agriculture, delivered the first 6000 tons of wheat and 2000 tons of sorghum in 2010. The agreements with the host countries consider the land as Djibouti’s national territory and exempt products from taxes or duties; labor must be hired locally.

The food program subsidies are difficult to calculate. Food is sold to consumers at administered prices through a private company, with an estimated revenue loss of about 0.1–0.2 percent of GDP at current production levels. Staff has not been able to properly estimate the program’s direct cost to the budget, since the relevant allocations are included among capital spending but are not separately reported, and financial statements are not available. However, the authorities estimate budget costs of the farm program at 0.05 percent of GDP in 2011. Extra-budgetary spending on inputs and equipments for the program (amounting to about 0.4 percent of GDP) was one of the causes of the 2009 fiscal slippage.

In the medium term, the program is intended to provide 30–40 percent of Djibouti’s key food items and be financially self-sustaining. To this end, the authorities plan a substantial expansion of the program: besides additional 2000 hectares in Ethiopia, for which permits have already been obtained, additional 20,000 hectares would produce rice, sugar, and cash crops such as kiwi and strawberries, which could be sold on international markets.

Petroleum products

In 2011, the authorities have stabilized diesel prices at a level that would make public transportation costs politically acceptable. They de facto suspended a smoothing mechanism which adjusts pump prices with a lag relative to international prices. The revenue loss is estimated at 0.2 percent of GDP for the year.

Also starting this year, the government has been selling kerosene, which is used for cooking mainly by the poor, at a subsidized price. Total budget cost is estimated at $0.3 million (0.03 percent of GDP) for 2011.

Fiscal sector reforms

15. Progress on structural fiscal reform slowed in 2011 as the administration focused on the elections:

  • Tax revenues: the authorities are on track to strengthen VAT administration (structural benchmarks for end-2011). The ministry of finance will enforce the obligation to fill tax returns for companies benefitting from tax exemptions and prepare an estimate of tax expenditures (new structural benchmark for June 2012). The cabinet has approved in June the new customs code (structural benchmark for end-March 2011). The authorities plan to introduce the software ASYCUDA to all external trade in 2011 (new structural benchmark for end-December 2011).

  • Public financial management: the authorities are holding regular treasury planning meetings (with the participation of health and education ministries) to maintain tight control on spending. They are contacting governments in northern Africa to acquire the software needed for the GFS 2001-compatible budget reclassification (end-June 2011 structural benchmark), but lack of financing will delay the purchase. The ministry of finance is finalizing the recruitment of additional staff in the budget department to address lagging work on the introduction of the medium-term budgetary framework. To lay the basis for regular updates of the cross-debt with public enterprises, the authorities will conclude stock-taking agreements with EDD, the water company ONEAD, and Djibouti Telecom (new structural benchmark for end-September 2011).

  • Fiscal data: the ministry of finance committed to strengthen data production, following significant delays in fiscal data preparation in the period around the elections, which prevented the regular web posting of fiscal reports (continuous structural benchmark).

C. Public Debt

16. External public debt is projected to decline from 56 percent at end-2010 to 53 percent of GDP at end-2011, but Djibouti remains at high risk of debt distress.6 The authorities are revising their medium-term public investment plan linked to the national poverty reduction strategy (Initiative Nationale de Développement Social, INDS). To improve debt sustainability, they will rigorously prioritize these projects, for which they intend to seek only concessional financing.

17. The remaining bilateral Paris Club agreements were signed in the last quarter of 2010. To comply with the comparability of treatment requirement, the authorities are seeking similar terms with non-Paris Club creditors. They have already signed agreements with Saudi Arabia and are in negotiation with Kuwait and the UAE.

18. The authorities committed to avoiding further accumulation of external arrears. The temporary accumulation of external arrears to two Paris Club creditors was due to insufficient administrative capacity, coordination problems within the administration in the period around the elections, and insufficient communication with the creditors. In the future, the authorities committed to follow rigorously the external debt service schedule and strengthen the tracking vis-à-vis creditors of executed debt service payments.

19. The authorities intend to catch up with delays in repaying domestic arrears. They will repay the arrears scheduled for 2011 (including the arrears accumulated to public utilities in 2009), the remaining domestic arrears scheduled for 2010, and the government’s 2009 dividend advance from BCI. The authorities will finalize in the coming months the convention on the reconciliation of cross-debt with the main public enterprises (government arrears and unpaid taxes) (new structural benchmark for end-September 2011).

D. Financial Sector Policies

20. The CBD has made good progress in improving banking supervision. The recent internal reorganization envisages a unit comprising a supervision section (structural benchmark for June 2011) with two additional staff (structural benchmark for June 2011), and an AML/CFT section, charged with applying the recently updated legislation. With the help of Fund-financed technical assistance from Banque de France, the CBD is now working on the implementation framework of the banking law approved in January 2010 by the National Assembly (submission to the Assembly was a structural benchmark for end-2010). The CBD will approve a roadmap for the implementation of the new banking law (new structural benchmark for end-September 2011).

21. Measures to reinforce CBD governance are on track. In the coming weeks, the CBD Board will set a calendar of Board meetings for 2011 (structural benchmarks for end-June), and will publish the audit opinion for the 2010 accounts (structural benchmark for end-December 2011).

IV. Program Issues and Risks

22. The quantitative targets and structural benchmarks set under the 2011 program have been updated. The quantitative performance criteria on the budget balance and net credit to the government for end-June 2011, and the quantitative performance criterion on the budget balance for end-December 2011 have been revised to take into account the authorities’ target of a small surplus for 2011, the delays in tax revenues in the first months of the year, and the consequent changes in the quarterly distribution of spending and financing. The floor on social spending has been revised upward to align it with the planned budget expenditure. The structural benchmark on the acquisition of the software for the budget reclassification has been moved to December 2011 reflecting delays in donor financing. The program envisages additional structural benchmarks on: (i) fiscal expenditure reporting; (ii) introduction of customs software; (iii) public enterprise cross-debt; and (iv) a roadmap for the application of the banking law.

23. The program is fully financed. The authorities are expected to mobilize sufficient exceptional financing from multilateral and bilateral creditors on concessional terms. Donors will continue to support Djibouti mainly through grant and loan project financing, while expected budget support is relatively limited.7

24. The program is vulnerable to a number of risks:

  • Wavering political commitment, including due to vested interests or a flare-up of domestic social unrest;

  • Administrative capacity constraints, combined with shortfalls in technical assistance from donors, which could possibly affect the authorities’ ability to implement reform;

  • Unsustainable spending pressures deriving from: (a) higher transfers to EDD due to a surge in oil prices; (b) an uncontrolled expansion of the food subsidy program; (c) the resumption of hostilities with Eritrea and increase in defense spending; and (d) a humanitarian crisis in Yemen;

  • Weaker-than-projected increase in international reserves, in case capital inflows are insufficient to finance the growing current account deficit.

V. Staff Appraisal

25. The program is broadly on track. The authorities have maintained fiscal discipline, made sufficient progress on their structural reform program, and committed to adequate policies for 2011. Staff therefore supports the authorities’ request for the completion of the fourth review and the waivers of nonobservance of the performance criteria on the non-accumulation of domestic arrears and non-accumulation of external arrears, in light of the minor deviation from the program objectives and the corrective actions undertaken by the authorities.

26. The authorities’ focus on lowering unemployment is appropriate. The shift to initiatives to support increased employment in the private sector is welcome. But to facilitate foreign investments and the development of a dynamic private sector, the authorities need to push ahead with structural reform, including improvement in the business environment.

27. Lowering the cost of energy requires a medium-term strategy. The interconnection with the Ethiopian grid is an important step forward, but the authorities need to develop a coherent energy policy to meet Djibouti’s energy needs while limiting budget costs and protecting debt sustainability. In the immediate future, they should carefully evaluate alternatives to the construction of a new power plant, financing of which would significantly delay the improvement in public debt dynamics.

28. Under the currency board regime, which has served the country well, macroeconomic stability hinges on sound fiscal policy. Staff welcomes the authorities’ commitment to go beyond the original government budget balance target for 2011 in order to catch up with the payment of some domestic arrears scheduled for 2010. To achieve this target, the authorities will have to remain vigilant about spending pressures, notably arising from transfers to the electricity company and an uncontrolled expansion of subsidies. Spending discipline will also depend on the continued avoidance of extra-budgetary spending.

29. Reform in the fiscal sector is crucial for underpinning fiscal discipline. Deepening tax revenue reforms, notably in the VAT administration and the reduction of tax exemptions, is necessary to increase revenue potential. Progress in public financial management is encouraging, but more needs to be done, particularly on strengthening the budget process (including by increasing transparency of budget planning and execution) and tracking domestic arrears and public sector cross debt. The authorities need to improve treasury management to avoid the increase in the stock of domestic arrears and rigorously execute external debt service payments.

30. Djibouti’s subsidy programs are useful to address the populations’ needs, especially with regard to food security. But, given the tight government financing constraints, fiscal space for any increase in subsidy spending would have to be found through higher revenues or lower non-priority spending items. Furthermore, to increase efficiency of public spending, the costing, transparency, and accountability of these subsidies (both direct and indirect) should be improved, particularly with regard to the farm program, which could potentially entail significant costs to the budget. With regard to subsidies on oil products, diesel subsidies should be gradually phased out by making the smoothing mechanism fully operational, to allow for the transmission of permanent international oil price increases and the recovery of foregone fiscal revenues. In the medium term, subsidies should be phased out in favor of well-targeted social safety nets.

31. The CBD needs to focus on implementing the new banking law. Building on its internal restructuring, the CBD should now develop a solid implementation framework and adequately train its staff. The financial system appears sound, but, in light of the high credit growth and increase in the number of banks in recent years, the authorities should carefully monitor banking sector developments and be vigilant on the increase in risks, both systemic and to individual banks.

32. The authorities should be commended for maintaining fiscal discipline during the electoral period, and for confirming their commitment to program objectives for 2011. With the elections over, the authorities should focus on catching up with tax recovery to achieve the ambitious fiscal target for 2011; push forward reforms in the public administration, especially in the fiscal sector; and urgently resume data reporting and publication with appropriate timeliness and coverage, which is key for the implementation and monitoring of the ECF program.

Table 1.

Djibouti: Selected Economic and Financial Indicators, 2008–16

(Quota: SDR 15.9 million)

(Population: 0.818 million; 2009)

(Per-capita nominal GDP: $1,383; 2010)

(Poverty rate: 42 percent; 2002)

article image
Sources: Djibouti authorities; and Fund staff estimates and projections.

In 2009 includes externally financed projects of public enterprises guaranteed by the government amounting to 3.7 percent of GDP.

Does not include repayment of arrears to public enterprises accumulated in 2009. Repayment of these arrears is included in current expenditure in 2010–12.

In 2009, includes special and general allocation of SDR 14 million.

Gross foreign assets of the CBD in percent of monetary liabilities (reserve money and government deposits at CBD).

Table 2.

Djibouti: Central Government Fiscal Operations, 2008–11

(In millions of Djibouti francs)

article image
Sources: Djibouti authorities; and Fund staff estimates and projections.

Includes €7.5 million of ITS personal income taxes from the French millitary, as per leasing agreement.

Annual leasing fees from French (€30 million) and US (US$30 million) military bases, which include the payment of TIC on behalf of French soldiers. From Q3 2010, includes US$3 million from Japanese military base.

In 2009, includes externally financed projects of public enterprises guaranteed by the government amounting to 3.7 percent of GDP.

In 2010–12 includes the repayment of arrears to public enterprises accumulated in 2009.

Includes €5 million (out of a total of €30 million) of foreign-financed current spending from French military as per leasing agreement. The budget classifies this amount as domestic investment spending.

Excludes housing subsidies.

Revised from 2010 to exclude salaries. In 2011 includes only social spending as defined in TMU.

Defined as domestic revenue minus expenditure financed from domestic sources.

Table 3.

Djibouti: Central Government Fiscal Operations, 2008–11

(In percent of GDP)

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Sources: Djibouti authorities; and Fund staff estimates and projections.

Includes €7.5 million of ITS personal income taxes from the French military, as per leasing agreement.

Annual leasing fees from French (€30 million) and US (US$30 million) military bases, which include the payment of TIC on behalf of French soldiers. behalf of French soldiers. From Q3 2010, includes US$3 million from Japanese military base.

In 2009, includes externally financed projects of public enterprises guaranteed by the government amounting to 3.7 percent of GDP.

In 2010–12 includes the repayment of arrears to public enterprises accumulated in 2009.

Includes €5 million (out of a total of € million) of foreign-financed current spending from French military as per leasing agreement. The budget classifies this amount as domestic investment spending.

Excludes housing subsidies.

2010 GDP was revised compared to program.

Defined as domestic revenue minus expenditure financed from domestic sources.

Table 4.

Djibouti: Balance of Payments, 2008–11

(In millions of U.S. dollars, unless otherwise indicated)

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Sources: Djibouti authorities; and Fund staff estimates and projections.

Includes the French and U.S. contributions for the military bases and outflows of interest due on Paris and non-Paris Club debt.

Excludes exceptional financing.

In 2009, includes special and general allocation of SDR 14 million.

Table 5.

Djibouti: Monetary Survey and Banking Sector Indicators, 2008–11

(End-of-period, in millions of Djibouti francs, unless otherwise indicated)

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Sources: Djibouti authorities; and IMF staff estimates and projections.

In 2009, includes special and general allocation of SDR 14 million.