New Partnership with Djibouti to Focus on Human Development and Economic Diversification

March 13, 2014

WASHINGTON, March 13, 2014 – The World Bank Group has announced a new strategy for Djibouti that aims to support the government in reducing extreme poverty and building the foundations for shared prosperity through improved service delivery and better governance.

The pillars of the new Country Partnership Strategy 2014-1017 for Djibouti, discussed today by the World Bank’s Board of Executive Directors, are to reduce vulnerability and improve the business environment. The strategy was designed jointly by the International Development Association (IDA), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

“This new strategy brings together the combined resources of the World Bank Group and demonstrates a deepening engagement with Djibouti’s national authorities, as well as with civil society, the private sector, and development partners,” said Inger Andersen, World Bank Regional Vice President for the Middle East and North Africa. “It also reflects the understanding that Djibouti is adopting new approaches to acceleration of economic growth.”

IDA, the World Bank Group’s arm for the world’s poorest countries, has earmarked up to $25 million for programs under the new strategy.  This will complement the current IDA portfolio which comprises seven projects totaling  about US$57 million, and focused on social safety nets, energy, rural community development, urban poverty reduction, education, and health. In addition, an US$11.6 million trust fund portfolio supplements the IDA resources. Programs under the new strategy will strengthen social safety nets, improve energy supplies to low income housing areas, and support rural development and water mobilization. Djibouti has also benefitted from a US$427 million guarantee by the Multilateral Investment Guarantee Agency (MIGA), signed in December 2007, for the development, design, construction, management, operation and maintenance of the new container terminal in Doraleh.

"MIGA has supported Djibouti's development through guarantees for the state-of-the-art Doraleh port facility, which has delivered impressive results," notes MIGA Executive Vice President Keiko Honda. "We look forward to continuing to support sustainable projects with high development impact in sectors aligned with the broader World Bank Group strategy."

Job creation is a priority, with growth in tourism offering potential, as well as the opening-up of the telecommunication sector to private competition. Reducing the high cost of electricity is another economic priority, particularly through the exploration of ‘green’ geothermal energy. To date, economic growth in Djibouti has relied on one-off foreign direct investment in port facilities, hotels and the establishment of foreign military bases.  

Helping Djibouti maximize its economic opportunities to create jobs and greater prospects for the most vulnerable segment of its population, namely women and youth, will be a cornerstone of our engagement.” said Homa Zahra-Fotouhi, the World Bank Resident Representative in Djibouti. “This will be a critical step toward harnessing its human potential.”

As the main sea outlet for landlocked Ethiopia and its market of 90 million inhabitants, and with a state of the art deep-water port among the most sophisticated in the world, Djibouti stands to gain from expansion in Ethiopia’s economy. Djibouti’s geostrategic location at the southern entrance to the Red Sea, also gives it a natural vantage point for busy trade routes on some of the world’s busiest shipping lanes.

"Djibouti has the opportunity to send a positive signal to investors by improving the investment climate.” said Jean Philippe Prosper, IFC Vice President. “IFC aims to find new ways to support private investors, including through support to small and medium enterprises."


Media Contacts
In Djibouti
Homa-Zahra Fotouhi
Tel : +1 202 473 6452
In Washington
William Stebbins
Tel : +1 202 458 7883