President Ismail Omar Guelleh chairs the 12th session of Djibouti’s Council of Ministers on October 27, 2026, in an image shared on X. Photo: Vue sur Djibouti (@View_of_Djib) via X
Djibouti’s government has cut its 2026 budget by 2.22 percent after revenue in the first five months of the year fell almost 13 billion Djibouti francs below forecast, the cabinet said.
The Council of Ministers, chaired by President Ismail Omar Guelleh, approved a draft amended budget law at its 12th session on Tuesday, October 27, according to the official record of the meeting published by the presidency. The revised budget is balanced at 168.48 billion Djibouti francs in both revenue and spending, down from 172.3 billion francs in the original 2026 finance law, a net cut of about 3.82 billion francs. That is about 948 million US dollars at the central bank’s fixed rate, The Rio Times calculated.
The presidency’s record says the original forecasts and the actual results of the first months of the year were far apart. By the end of May, general revenue, including grants but not loans, stood at 55.2 billion francs against a projection of 68.08 billion, a gap of 12.88 billion francs. Domestic revenue alone was 10.18 billion francs below target. At the same time, spending ran above the planned path, mainly because of current and operating costs.
The cut comes mostly from lower domestic resources, partly offset by higher external resources, the cabinet said. It lowered its growth forecast from 6.5 percent in 2025 to 5.9 percent in 2026, and warned that the outlook remains exposed to disruptions in maritime trade, higher freight and energy costs and slowing demand in the region. Djibouti’s economy depends heavily on its ports, which handle most of landlocked Ethiopia’s trade, and on foreign military bases, and shipping in the Red Sea has been disrupted repeatedly by the wars in Yemen and the wider region.
To raise more money, the government said it would widen the tax base, improve the yield of value added tax, continue digitizing the tax and customs services, and step up controls against fraud and tax evasion. The same session approved a new organic law on finance laws that the cabinet said would bring budgeting by programs, multiyear planning, online publication of budget data and stronger oversight by parliament and the Court of Accounts.
In the same meeting, President Guelleh announced an exceptional allocation of 1.8 billion francs, about 10 million dollars, to the Djibouti Economic Development Fund, known by its French initials FDED, to finance young entrepreneurs and small businesses. The presidency’s record says the fund has not made any new loans since 2016 and has focused only on recovering its old portfolio. Priority sectors include agriculture, livestock, fishing, tourism, renewable energy, logistics, digital services and the circular economy, Guelleh said, adding that success would be measured by the number of viable businesses and jobs created.
The youth fund drew most of the attention online. The Djiboutian news account Vue sur Djibouti (@View_of_Djib) shared the announcement as a “flash info” on Tuesday, and Ahmed Mousse Bakal wrote on X on Friday that it “marks a strong signal” for young entrepreneurs and the fight against unemployment. The writer Alpha Lassini (@LassiniAlpha) published a commentary titled “Djibouti and the ten million dollars promised to its youth,” which raised questions about how the fund will be governed and what employment policy should come with it. Mereja Media found no posts on X discussing the budget cut itself.
The cabinet also postponed regional and municipal elections from February to April 2027 to avoid Ramadan, a decision first reported this week. On Sunday, the president is due to host a celebration of National and African Youth Day at the People’s Palace and hand out his “Youth Initiative” grand prize, his office said on X. The amended budget was approved as a draft law, which goes to the National Assembly for a vote.