IMF approves $14 M loan for drought-hit Djibouti

The International Monetary Fund on Monday agreed to boost financing for Djibouti by another $14 million to help the country deal with the impact of a drought in the Horn of Africa and an increase in global commodity prices.

The IMF said it would immediately disburse about $9.7 million of the money to the government. In 2008, the IMF agreed a $19.6 million loan for Djibouti.

Drought late last year hit countries in the Horn of Africa including Somalia, Ethiopia, Kenya and Djibouti, putting more than 13 million people at risk of starvation.

IMF Deputy Managing Director Nemat Shafik said higher commodity prices and the drought had hit poor households the hardest.

"These shocks have hiked imports, especially on food and fuel, thus increasing the current account and external financing needs, and have put pressure on fiscal space through lower tax revenues and higher fuel subsidies," Shafik said in a statement.