WASHINGTON, December 16, 2021 – The World Bank today approved US$70 million in credit from the International Development Association (IDA), the World Bank’s program for the poorest countries, to improve regional connectivity and logistics in Djibouti, along the Djibouti-Addis Ababa corridor. The project supports efforts to strengthen Djibouti’s role as a major port of transit in the eastern and central African region.
An upgraded, more efficient and safer road corridor will attract investments, facilitate regional and domestic trade, and create new jobs and economic opportunities, especially for women. The project contributes to Djibouti’s overall objective of poverty reduction.
“Given Djibouti’s strategic position in the Horn of Africa, the transportation sector plays a critical role in the domestic and regional economy,” says IIlyas Moussa Dawaleh, Djibouti’s Minister of Economy and Finance in charge of Industry. “Improving regional connectivity and connections between the regions of Djibouti will strengthen our resilience to achieve more sustainable and inclusive growth. We are grateful for all the efforts of our development partners, and the World Bank in particular, to push the Horn of Africa Initiative agenda forward.”
The Djibouti Regional Economic Corridor Project will support the rehabilitation and upgrading of 42 kilometers of the Djibouti-Addis Ababa southern corridor, which connects landlocked Ethiopia to world markets via access to Djibouti’s port. The project will build infrastructure that is both climate-resilient and adheres to road safety standards. The operation will finance the deployment of intelligent transportation systems that are aimed at simplifying administration processes and improving the movement of freight while also strengthening the capacity of institutions to support the management of roads. Interventions will also improve transit services and customs procedures to reduce delays along the corridor and clearance time at the Port of Djibouti.
“The Djibouti regional economic corridor is critical to strengthen Djibouti as a regional transport and trade hub,” notes Boubacar-Sid Barry, World Bank Resident Representative in Djibouti. “The new operation will significantly contribute to longer-term development outcomes, not only for Djibouti, but for the whole Horn of Africa region and beyond.”
The Djibouti Regional Economic Corridor project is the second in a series of projects aimed at supporting the development of regional transport corridors under the Horn of Africa Initiative.
“Regional integration is an engine for the countries in the Horn of Africa to accelerate growth and reduce poverty in an inclusive manner”, says Boutheina Guermazi, World Bank Director of Regional Integration for Sub-Saharan Africa, the Middle East, and Northern Africa. “This new project supports Djibouti in its recovery efforts by improving regional connectivity and infrastructure, and facilitating trade in order to create jobs, strengthen human capital and empower women and youth.”
The World Bank in Djibouti
The World Bank’s portfolio in Djibouti consists of 15 projects totaling US$328 million in financing from IDA. The portfolio is focused on education, health, social safety nets, energy, rural community development, urban poverty reduction, the modernization of public administration, governance, and private sector development with an emphasis on women and youth.
The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. The rest are in other regions: 14 in East Asia; six in South Asia; four in Europe and Central Asia; eight in Latin America and Caribbean; and three in Middle East and North Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa.
The Horn of Africa Initiative
The Horn of Africa Initiative comprises five countries - Djibouti, Eritrea, Ethiopia, Kenya and Somalia. The initiative was launched in 2019 to deepen regional integration and forge closer economic ties. It identifies four priority areas of focus: (i) develop regional infrastructure networks (transport corridors, energy and digital); (ii) increase trade and investments and improve institutional climate for regional value chains; (iii) build resilience to fragility and climate-related (transboundary threats, including locust upsurges, groundwater management, borderlands); and (iv) strengthen health security and diseases surveillance, support skills development and regional ID4D to streamline the movement of people and goods across borders.
