Djibouti Country Summary

FATF Status

Djibouti is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Djibouti was undertaken in 2024. According to that Evaluation, Djibouti was deemed Compliant for 8 and Largely Compliant for 10 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Djibouti has established laws to combat corruption among public officials, but there is a lack of enforcement and prosecution, with no recorded cases of corruption being addressed. Despite being a signatory to the UN Convention against Corruption, the country's institutions responsible for investigating and reporting corruption lack the authority to implement meaningful reforms. While U.S. firms do not cite corruption as a significant barrier to investment, there are allegations of coercive practices related to government contracts, and overall, the prosecution of corruption remains rare.

Djibouti's economy, characterized by a lack of natural resources and a small population, heavily relies on foreign direct investment (FDI) to drive growth, particularly in sectors like transport, logistics, and energy. Despite a strategic location and ongoing reforms to improve the business environment, challenges such as high unemployment, a large informal sector, and regional instability hinder economic development.

Djibouti's investment climate is characterized by a strong government push for foreign direct investment (FDI) to drive economic growth, particularly in sectors such as transport, logistics, and energy. The country offers a stable currency, strategic geographic advantages, and various incentives for investors, including tax breaks and simplified registration processes through the National Investment Promotion Agency (NIPA). However, challenges such as high electricity costs, a large informal sector, and bureaucratic complexities can hinder investment.