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PRESS RELEASE

Djibouti Lays the Foundation for Private Sector Growth

June 23, 2014

WASHINGTON, June 23, 2014 --The World Bank Group today announced a US$4 million project to support the government of Djibouti’s efforts to attract foreign investment and improve the local business climate by strengthening mechanisms to address commercial disputes, easing access to finance, and expanding the capacity of the National Agency for Investment Promotion (ANPI) for project management and implementation.

 “In recent years, Djibouti has recognized the potential of the private sector to generate jobs and growth as a means to tackle the country’s persistently high unemployment and poverty rates,” said Homa-Zahra Fotouhi, World Bank Resident Representative in Djibouti. “This is the first joint IDA-IFC project, bringing together the combined strengths of the Bank’s fund for the poorest countries and our private sector arm in support of Djibouti’s economic and social development.”

The Governance for Private Sector Development Project, designed in close cooperation with the Ministry of Finance, will send a signal to investors that Djibouti is serious about improving the country’s business environment. The project will be a funded by a US$2 million credit from IDA, , almost US$500,000 in parallel financing from the FIRST trust fund, to be focused on access to finance, US$300,000 from the IFC, and an estimated contribution of US$1.2million from the government of Djibouti.

Djibouti’s past reliance on capital intensive growth and foreign investment has failed to generate enough jobs for its small but growing population. A World Bank report, A New Growth Model for Djibouti, completed in 2013, identified several areas of potential growth such as telecommunications, fisheries, tourism and transport. The report also identified a number of constraints on the growth of the private; including excessive red tape, a punitive tax code and limited access to finance. Bank Group experts have been working closely with Djiboutian counterparts since the publication of the report to develop the current project, which will both address constraints and create an environment in which opportunities for growth can be seized.

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PRESS RELEASE NO:
2014/594/MENA