Djibouti, strategically located at the intersection of key trade routes, is poised to enhance its role in regional connectivity and integration. The country is simultaneously addressing issues such as youth unemployment and the impacts of climate change. The World Bank has invested $400 million through its International Development Association (IDA) portfolio to assist Djibouti in these areas by focusing on energy, transport, digital transformation, education, health, and small enterprise support.
These efforts are aligned with Djibouti's Vision 2035 strategy aimed at poverty reduction, inclusive growth, and resilience against future shocks. Despite generating over $400 million annually from port revenues due to its strategic location between Africa and the Middle East, Djibouti faces challenges like limited arable land and reliance on food imports. The economy remains susceptible to external shocks and regional tensions affecting growth prospects.
The World Bank supports Djibouti's transition towards a resilient economy through investments in education, infrastructure, and social protection under IDA financing. These interventions are essential for achieving sustainable growth, job creation, and poverty reduction outlined in Vision 2035.
Education plays a central role in Djibouti’s development strategy with projects like the Expanding Opportunities for Learning Project targeting vulnerable groups such as children from low-income families and refugees. This initiative aims to enroll over 23,000 out-of-school children by 2025 while constructing new preschool classrooms for early learning opportunities.
Social protection enhancements are underway through projects like the Social Protection Emergency Crisis Response Project which has aided over 86,000 people with cash and in-kind transfers. These efforts aim to reduce reliance on emergency aid while promoting financial inclusion by linking beneficiaries to formal financial institutions.
The Horn of Africa Initiative: Djibouti Regional Economic Corridor Project focuses on improving infrastructure to lower trade barriers and promote regional integration. This project seeks to enhance market access for local businesses while strengthening Djibouti’s position as a logistics hub.
In energy diversification efforts, the Second Djibouti-Ethiopia Power System Interconnection Project supports renewable energy reliance alongside the Sustainable Electrification Program aiming for 100% renewable energy by 2035. Additionally, the Digital Foundations Project seeks to provide affordable high-speed internet access fostering innovation across sectors.
Djibouti also addresses refugee needs through IDA-supported initiatives benefiting both refugees and host communities by improving access to essential services like education and healthcare. In towns like Ali Sabieh where resources are shared among communities enhancing social cohesion.
As part of achieving Vision 2035 goals supported by IDA’s active financing of $400 million focused on human capital development infrastructure improvements along with social protection measures positioning itself as a model for resilience within its region showing how strategic investments can transform challenges into lasting opportunities.
"Thanks to this support," said Fatouma from Tadjourah about one such initiative helping her family meet basic needs without suffering during challenging times.