Overview

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Context
Strategy
Results

Djibouti is a small country in which more than 23% of the population lives in extreme poverty. With less than 1,000 km2 of arable land (0.04% of 23,200 km2) and an average annual rainfall of 5.1 inches, Djibouti has a chronic food deficit and is totally dependent on imports to meet its food needs. As such, it is highly sensitive to external shocks such as spikes in food and fuel prices and natural disasters such as floods and droughts.
Djibouti’s economy is dependent on foreign financing, foreign direct investments, rents from foreign countries’ military bases, and port services, which capitalize on both the country’s strategic position at the southern entrance to the Red Sea and on being Ethiopia’s main import-export route.
Because of its global location – geographic and geopolitical – transportation and logistics services drive the economy. Djibouti has enjoyed rapid and sustained growth over the past fifteen years with per capita GDP increasing by 3.1 percent on average per annum in 2001-2017.
Economic growth accelerated to more than 6.5 percent on average per year in 2014-2016 as the country engaged in mega-investments in port infrastructure development and railway construction to link Djibouti to Ethiopia. Those strategic investments are expected to boost export of services over the coming decade with GDP growth remaining around 7 percent. Inflation rates have declined from a peak of 11.9 percent in 2008 to 0.6 percent in 2017.
In the first two months of 2018, consumer prices declined by 0.5 percent on a year-on-year basis. Extreme poverty declined in the last fifteen years but remains high since about one fifth of the population continues to live below the international poverty line. Fiscal deficits rose significantly in 2014-2016 to more than 15 percent of GDP on average per year as the country was implementing an ambitious public investment program but declined to around 3 percent of GDP in 2017.
As a result, public and publicly guaranteed debt more than doubled to reach 87 percent of GDP in 2017. Foreign exchange reserves are projected to remain strong in 2018 at US$435 million, sufficient for coverage of about 3.6 months of imports.

Last Updated: Apr 17, 2018
The 2014-2017 Country Partnership Strategy combines the resources and expertise of the World Bank’s International Development Association (IDA), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The Strategy supports the government’s vision 2035 to reduce extreme poverty and build the foundations for shared growth by harnessing the country’s human and economic potential. The Strategy rests on two pillars—reducing vulnerability and strengthening the business environment—while focusing on institutional strengthening and gender as cross-cutting themes.
The updated Strategy -- the Djibouti Country Partnership Strategy Performance and Learning Review – was approved by the Bank’s Board in May 2016. It reflected the progress that has been made in the implementation of the ongoing Strategy, in particular with reference to strengthening the business environment, creating jobs, supporting rural communities, and increasing access to energy for the population. The Strategy deepened World Bank Group engagement in areas where significant results have been achieved through earlier interventions and to respond to the government’s priorities, as defined in its long-term development strategy, Djibouti Vision 2035.
As of March 2018, the active portfolio for Djibouti comprises nine IDA projects, for a total commitment of US$105 million. World Bank Group (WBG) teams have continued to leverage IDA resources through recipient executed trust funds with a net commitment value of about $21 million. Trust-funded activities are fully aligned with, and complementary to, the IDA-funded portfolio. The program – both IDA and trust funds – focuses on social safety nets, energy, rural community development, urban poverty reduction, health, education, governance and private sector development. All projects place particular emphasis on women and youth.

Last Updated: Apr 17, 2018
Social Protection:
An innovative social safety net project reached over 10,000 women and children who participated in the nutrition program and provided about 400,000 person-days of short-term employment opportunities. Under the nutrition for pregnant women and mothers of young children component, about 17,300 beneficiaries have been reached with basic preventative nutrition services. The project has already surpassed the target of 16,000 and is expected to reach about 18,000 women by project closing. The project is also supporting the national social registry and national social protection strategy. The registry currently contains information on about 47,000 households, exceeding the target of 20,000. The collection of biometric data on these households has recently been launched. Registry data is currently being shared between 4 programs (target of 6). The program has contributed to diet diversification and improved nutrition practices among beneficiary households and strengthened female empowerment. At project level, an integrated Management Information System covering the nutrition, as well as the workfare component has been developed to ensure efficient implementation of the social safety net project in Djibouti. At the national level, the project is supporting the development of a social registry that will be used by multiple programs and stakeholders, creating a database containing socio-economic/demographic characteristics of the population to target resources to the most needy; the social registry will spearhead, and eventually feed into, a national ID system.
Rural Development:
The ongoing Rural Community Development and Water Mobilization Project (PRODERMO, 2012-2019), is the first project in Djibouti to support small scale fisheries activities. Almost 7,000 households benefited from the water mobilized so far and 160 fishermen are benefiting from the recently rehabilitated ice unit, allowing better fish conservation and improved quality. Moreover 60,890 head of livestock have gained access to more secure water supply. 2,282 persons trained on water resource management and agro-pastoral resources management, and 1.5 million cubic meter of water infrastructure are being constructed or rehabilitated.
Urban Poverty Reduction Program:
The ongoing Urban Poverty Reduction Program supports upgrading of urban services and infrastructure in Quartier 7 in Djibouti City. Results have been impressive. 37,100 beneficiaries have directly benefited from access to basic services, urban mobility, or flood management, and 61,725 person/days of short-term employment have been created. 3.7 km of urban road has been constructed.

Last Updated: Apr 17, 2018