World Bank to provide US$43 Million in Concessional Financing to Djibouti for 2016-17 to Create Jobs, Support Incomes, and Improve Services for the Poor

The World Bank, Tue, May 31, 2016

WASHINGTON, May 31, 2016—The World Bank Group Board of Executive Directors endorsed today an updated strategy to help Djibouti address vulnerability and improve service delivery. The Board also approved a total of $31 million in concessional financing for Djibouti from IDA, the World Bank’s fund for the world’s poorest countries, for 3 operations:, (i) US$20 million for the Development Response to the Displacement Impacts under the US$175 million Regional Horn of Africa Initiative; (ii) US$7 million additional financing for the Rural Community Development and Water Mobilization Project; and (iii) US$4 million additional financing for the Social Safety Net Project.

The updated strategy -- the Djibouti Country Partnership Strategy Performance and Learning Review – reflects 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 seeks to deepen 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. In addition to the above 3 operations, the updated strategy envisages proposed new financing in 2017 for US$5 million additional financing to strengthen governance and the business environment and US$7 million for a new project to provide the poor with access to energy.

"Fighting the high levels of extreme poverty in Djibouti requires a sustained and determined effort at creating jobs, especially for the youth, supporting incomes of the poor and the vulnerable, and improving service delivery for all,” said Asad Alam, World Bank Country Director for Djibouti, Egypt and Yemen. “The World Bank Group's efforts are directed towards these ends and reflect the emphasis placed in the new World Bank Group strategy for Middle East and North Africa on supporting inclusive growth, strengthening resilience, and promoting regional cooperation."

For the last twenty-five years Djibouti has provided refuge for people fleeing conflict in neighboring countries, but new waves of displacement from Yemen threaten to overwhelm the country’s already fragile institutions and public services. In response, the World Bank aims to strengthen basic infrastructure so that the country can cope with the additional demand, and to create economic opportunities for both refugees and the communities hosting them through a US$20 million Development Response to Displacement Impacts Project.

“The objectives of our interventions in Djibouti are to help the government increase opportunities for the vulnerable segments of the population in sectors where the World Bank Group has a comparative advantage” said Homa-Zahra Fotouhi, World Bank Resident Representative in Djibouti “With more efficient and transparent government institutions, Djibouti can strengthen its economy, develop the base for private sector-led growth to create jobs, and reduce poverty substantially. To meet these multiple commitments, our portfolio of programs in Djibouti has risen to over US$100 million.”

To sustain ongoing progress in the management of the country’s scarce water resources, an additional US$7 million equivalent was approved for the Rural Community Development and Water Mobilization Project (PRODERMO). The project has so far secured water supplies for 1,600 households and 10,260 heads of livestock. PRODERMO has had a significant effect on women, relieving them of the duty of fetching water and giving them more time for productive activities.

To support the national goal of building a more effective social protection system, that reaches the most in need and builds the capacities that are a path out of poverty, an additional US$4 million equivalent was approved for the Social Safety Net Project. These funds will support the completion of a social registry to allow for the identification of the most vulnerable households, the scaling-up of the community-based nutrition program, and the provision of short-term income opportunities for women. The project has so far provided over 12,000 beneficiaries with education on nutrition, and over 9,000 households have benefited from temporary employment.

Currently, the World Bank Group portfolio in Djibouti includes 7 projects in various sectors for a total commitment of US$45.4 million and 15 trust funds for a total commitment of US$24.5 million. All World Bank financing is through its concessional financing facility, the International Development Association, and Trust Fund financing is through grants.

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