The Central Bank of Djibouti has been making significant strides in advancing financial inclusion in Djibouti. The bank has introduced a mobile banking system, allowing citizens to access financial services through their mobile phones.
This innovative approach has greatly expanded access to financial services, particularly for rural communities. The bank has also partnered with local financial institutions to increase access to credit and other financial services.
The Central Bank of Djibouti has also implemented a national payment system, which has streamlined transactions and reduced the need for cash. This has made it easier for businesses and individuals to conduct financial transactions.
Central Bank of Djibouti Overview
The Central Bank of Djibouti is responsible to the Djiboutian government, having been established by the decree 79030 of 18 April 1979.
The bank's duties include issuing and redeeming notes and coins, which is a crucial function of any central bank.
One of the key objectives of the Central Bank of Djibouti is to promote the financial stability and soundness of financial institutions, which is essential for the country's economic growth.
The bank also supervises, regulates, and inspects any financial institution operating in and from within Djibouti, ensuring that they comply with the country's financial regulations.
Here are some of the key duties of the Central Bank of Djibouti:
- To issue and redeem notes and coins
- To supervise, regulate and inspect any financial institution which operates in and from within Djibouti
- To promote the financial stability and soundness of financial institutions
- To supervise, regulate or approve the issue of financial instruments by financial institutions or by residents
- To assist with the detection and prevention of financial crime
- To foster close relations between financial institutions themselves and between the financial institutions and the Government
- To manage exchange control and regulate transactions in foreign currency or gold on behalf of the Government
- To advise and assist the Government and public bodies on banking and other financial and monetary matters
- To perform such functions as may be necessary to fulfill the said objects.
Djibouti Complies with FATF Guidelines
Djibouti is taking steps to comply with the Financial Action Task Force (FATF) anti-money laundering guidelines.
It has been given a one-year deadline to implement the recommendations or risk being placed on the grey list.
Djibouti: IOG Progresses on Cybersecurity Reforms
Djibouti is making significant strides in strengthening its cybersecurity measures to become an international financial centre. President Ismail Omar Guelleh is taking proactive steps to secure the country's information systems.
The FATF experts are currently assessing Djibouti's progress in combating financial crime, and the Central Bank is bracing for its first FATF anti-graft review. This review will be a critical evaluation of the country's efforts to prevent money laundering and other financial crimes.
President Guelleh wants Djibouti to be recognized as a secure destination for international financial transactions. To achieve this, he is implementing cybersecurity reforms to protect the country's financial systems.
The Central Bank of Djibouti is likely to be under close scrutiny during the FATF review, and its ability to prevent financial crimes will be a key focus area.
Interview with the Governor
The Central Bank of Djibouti has a specific mechanism for SME financing called the Economic Development Fund.
This fund is in place to support small and medium-sized enterprises in Djibouti, which have historically been underfunded.
The local banking sector in Djibouti is highly liquid and has the means to finance SMEs.
In fact, the majority of SMEs in Djibouti are of a commercial nature.
Governors
Let's talk about the Governors of Djibouti. Abdi Mohamed Luc Aden held the position from 1979 to 1991.
The longest-serving governor was Djama Mahamoud Haid, who held the position for over 20 years from 1991 to 2013. That's a long time to be in one job!
Ahmed Osman Ali took over as governor in 2013 and is still in the position today.
OBG Talks to Ahmed Osman, Governor
I've spoken to business owners in Djibouti who have struggled to get the funding they need to grow their companies.
The local banking sector in Djibouti is highly liquid, meaning it has the means to finance small and medium-sized enterprises (SMEs).
A specific mechanism for SME financing exists in Djibouti called the Economic Development Fund.
Most SMEs in Djibouti are commercial in nature and have historically been underfunded.
The majority of SMEs in Djibouti are commercial in nature.
The Economic Development Fund is a mechanism that can be used to finance SMEs in Djibouti.
Banking Penetration and Faith
In Djibouti, Islamic finance is playing a significant role in the country's financial sector.
The segment currently accounts for between 15% and 20% of the overall market.
Of the 10 existing banks in late 2015, four were Islamic.
These four Islamic banks had assets of over DJF50bn ($280m) in the fourth quarter of 2015.
They also disbursed 15% of total loans and advances.
Frequently Asked Questions
How many banks are there in Djibouti?
There are 13 banks in Djibouti, with 3 major banks dominating the sector. Discover more about Djibouti's banking system and its growth over the past 14 years.
Do African countries have central banks?
Yes, African countries have central banks, with some countries sharing a central bank through regional currency unions. Two notable examples are the West African Banque Centrale des États de l'Afrique de l'Ouest and the Central African Banque des États de l'Afrique Centrale.
Sources
- https://en.wikipedia.org/wiki/Central_Bank_of_Djibouti
- https://african.business/2024/05/dossier/monetary-stability-is-an-asset-we-will-not-compromise-on
- https://oxfordbusinessgroup.com/reports/djibouti/2016-report/banking
- https://sme.asia/ciif-central-bank-of-djibouti-and-salaam-center-forge-strategic-alliances-in-islamic-finance/
- https://www.africaintelligence.com/eastern-africa-and-the-horn/2023/09/28/central-bank-braces-for-its-first-fatf-anti-graft-review,110059363-art
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