The World Bank In Djibouti

Djibouti is one of the smallest countries in Africa, with an area of 23,200 square kilometers and a population estimated at about 990,000. The size of its economy limits its ability to diversify production and increases its reliance on foreign markets, making it more vulnerable to market downturns and hampering its access to external capital. With less than 1,000 square kilometers of arable land (0.04% of its total land area) and average annual rainfall of only 130 millimeters, Djibouti depends almost completely on imports to meet its food needs. 

Djibouti’s strength lies in its strategic location at the southern entrance to the Red Sea, marking a bridge between Africa and the Middle East. Adjacent to some of the world’s busiest shipping lanes (between Asia and Europe), it hosts military bases for France, the United States, Japan, China, and the North Atlantic Treaty Organization (NATO), as well as for other countries with forces supporting global anti-piracy efforts. 

Djibouti’s economy is driven by a state-of-the-art port complex, among the most sophisticated in the world. Trade through the port is expected to grow rapidly in parallel with the expanding economy of the country’s largest neighbor and main trading partner, Ethiopia. Djibouti has some natural assets that could be used for tourism, untapped marine resources that could support more artisanal fishing, and an infrastructure of undersea telecommunications cables from which it could develop new digital and service industries. Renewable energy could be another source of growth, as Djibouti has geothermal, solar, and eolian potential. 

Economic activity slowed down in 2022 after a recovery in 2021. GDP growth rate in 2022 is estimated at 3.6 percent compared to 4.8% in 2021. The slowdown is driven by rigidities in the global maritime transport and logistics value chain associated with the war in Ukraine, sluggish demand from Ethiopia, and severe droughts. Djibouti's economy is projected to gradually recover over the medium term, driven by private and SOEs investment programs (including the development of the Damerjog industrial park project, a new fuel storage terminal, and an oil jetty) and structural reforms that will be undertaken as part of the implementation of the second national development plan (Djibouti Inclusion - Connectivity - Institutions ICI). GDP growth is thus expected to accelerate to 5.3 percent in 2023 and, further, to 6.2 percent in 2024.

Last Updated: Dec 15, 2022

The World Bank Group (WBG) approved in September 2021 a new Country Partnership Framework (CPF). The five-year CPF supports Djibouti’s Vision 2035 strategy to reduce extreme poverty and build the foundations for shared growth by harnessing the country’s human and economic potential. It addresses the country’s immediate needs and leverages the WBG’s ongoing engagement in inclusive private sector led growth, human capital development, strengthening governance and institution, supporting much needed regional infrastructure in transport, energy, and digital to enhance regional integration, boost productivity and job creation, while promoting gender parity, and supporting climate actions.

As of November 2022, Djibouti’s active portfolio comprised 20 IDA projects worth about US$457 million. Bank teams have leveraged IDA resources through recipient-executed Trust Funds, with a net commitment value of about $12.4 million. These Trust Fund activities are fully aligned with the IDA-funded portfolio. The portfolio is focused on energy, transports, digital transformation, education, health, social safety nets, energy, rural community development, slums upgrading and urban poverty reduction, the modernization of public administration, governance, and private sector development, with an emphasis on women and youth.

Last Updated: Dec 15, 2022

• Integrated cash transfer and human capital development

The ongoing integrated cash transfer and human capital development (PITCH) project enabled the rapid deployment of cash and in-kind transfers during the first wave of the pandemic in early to mid-2020 and its ensuing lockdown: 27,567 poor and vulnerable households—nearly 154,000 people—living in Djibouti city and Balballa, each received food vouchers worth 30,000FD ($170) over three months. At the same time, cash transfers to 12,300 households in rural and urban areas have continued, of which 7,500 were financed by the Bank. PITCH has also launched accompanying measures for cash transfer beneficiaries to boost human capital development: These include information sessions on key themes, such as nutrition, education, health, and gender-based violence—as well as medical care, provided on the spot at the time of quarterly cash transfer payments through a partnership with the Ministry of Health.

The project is helping the government continue the development of a national, social registry, which serves as a gateway to fourteen different social programs, including subsidized health insurance, social housing, food assistance, and cash transfers. The social registry now contains data on 102,591 households, over 1/3 of the population. PITCH is assisting the government to realize its goal of including refugees in the social registry, so that their eligibility for social programs can be determined—to date,1,310 refugee households have been added to the registry, with an end of project goal of 1,500.

 Finally, the project is putting in place a new community-driven development program that aims to boost access to human capital-related infrastructure in the interior of the country. So that communities can be empowered to identify and execute their sub-projects, a community training program is being developed through a knowledge exchange process with Beninese experts. The execution of 120 sub-projects is expected to be finalized in 60 selected sites. The program is being implemented in partnership with Djibouti’s Secretariat of State for Decentralization, regional authorities, and the Djibouti Agency for Social Development (ADDS) to promote the greater decentralization of government functions in a highly participatory and transparent manner.

• Development Response to Displacement in the Horn of Africa Project

Interventions by the Regional Development Response to Displacement Impacts Project (DRDIP) have improved access to social and economic services and infrastructure for 97,000 beneficiaries (both nationals and refugees in the Ali Sabieh and Obock regions); of the 33,000 host community beneficiaries, 65% are women. More than 1,300 beneficiaries of economic development activities have reported an increase in income.

A concrete example is the extension of the main grid lines of the national electricity network to Holl Holl town for 2,700 households (more than 10,000 recipients). The 100 newly installed public lights are testimony to the realization of a 40-year wait for the residents. About 356 houses, 24 village shops, and a range of public facilities, such as the town’s health center, primary (elementary) and secondary (high) schools and community development center, are benefiting from the individual connections currently being established. Major investments include the newly rehabilitated and renovated health center in Ali Addeh, Djibouti, which is serving both refugees and host communities in equal proportion with high-quality health care services. The center is well-staffed and equipped with hospital beds, an X-ray machine, and surgery equipment, in clean premises with well-lit wards.

• Improving Health Sector Performance project

The recently closed Improving Health Sector Performance project has increased the use of quality health care services for maternal and child health. So far, over 300,000 beneficiaries have received quality health care services; more than 90,000 women have received two to four prenatal visits; and 85% of children have been fully immunized before their first birthday. Five primary level community health centers have been upgraded to secondary level polyclinics providing 24-hour emergency and delivery care and outpatient services for a population of close to 100,000.

• COVID-19 Response Project and Towards Zero Stunting project 

The first case of Covid-19 was discovered in Djibouti in mid-March 2020. From January 2020 to October 2022, Djibouti registered 5,690 confirmed cases of COVID-19 and 189 deaths. Following a seven-week general lockdown, closed land and air borders, and a rigorous testing campaign with more than 100,000 tests done, Djibouti was able to substantially control the first wave of the pandemic. The Djibouti Covid-19 response contributed to that effort and achieved great results in a short amount of time. 

Specific results include:

• 27,567 households—nearly 154,000 people—received food vouchers, and another 4,888 households—or about 29,000 people—received cash transfers during the first COVID-19 outbreak and ensuing lockdown.
• 4,305 COVID-19 patients and 125 health workers have directly benefited from the supplies and equipment procured through two IDA projects, namely COVID-19 Response Project and the CERC of Towards Zero Stunting project.
• 97,000 beneficiaries (both nationals and refugees in the Ali Sabieh and Obock regions) benefited from improved access to social and economic services, and infrastructure.
• 10,000 beneficiaries in Holl Holl town accessed electricity through the extension of the main grid to villages.
• 1,000 beneficiaries in five poor neighborhoods in Obock received an individual electricity connection. 
• 667 beneficiaries benefited from livelihood program activities, including 328 women and 339 youth. Beneficiaries have received extensive training and livelihood support, including livelihoods’ grants.
• Over 300,000 beneficiaries received quality health care services; more than 90,000 women received two to four prenatal visits.
• The rehabilitation of two health facilities (Bouffard and PK13) is supported by the IDA projects.
• 241 health workers have been trained in infection prevention and control and other topics relevant to COVID-19 through the COVID-19 Response Project.
• Seven health facilities have benefited from medical equipment, consumables and other items financed by the IDA projects: three supported by the COVID-19 project; one supported by the CERC of the Towards Zero Stunting project; and three supported by both the COVID-19 project and the CERC.
• The test positivity rate peaked at around 16% in May 2020 and has come down considerably to less than 2% in recent months. 

Last Updated: Dec 15, 2022