AfDB approves over US $36 million support package for Djibouti

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The African Development Bank Group will help Djibouti to diversify its economy, improve governance and create employment for the country’s young population.

These commitments were agreed in the 2016-2020 Country Strategy Paper (CSP) for Djibouti approved by the Bank’s Board of Directors on Wednesday, March 9, 2016 in Abidjan, Côte d’Ivoire.

This new CSP aims to promote inclusive and diversified growth through support to the energy and health sectors as well as private sector-related institutions. To achieve these goals, the Bank will adopt a private sector-focused approach by prioritizing energy sector investments and supporting policy and institutional reform to create an enabling environment for private sector development.

Therefore, the CSP focuses on two strategic pillars: (i) development of socio-economic infrastructure in the energy and health sectors; and (ii) support for good governance through institutional capacity-building. For the first three years, under the first pillar, it will finance an electrification support project as well as a referral hospital construction project while the second pillar will finance a new institutional capacity-building project in the public and private sectors.

According to papers presented to the Board, “The CSP combines innovation and continuity, and will differ from previous CSPs in that it focuses more closely on advisory and institutional capacity-building actions, scales up the local job content in project design, and its formulation is based on a series of analytical briefs that will help to inform advisory activities and support Bank and Government investments.”-

Furthermore, cross-cutting issues such as green and inclusive growth and gender are more effectively mainstreamed in this new strategy, which will be reviewed at mid-term in 2018 to assess implementation, enhance focus and allocate new resources if necessary.

Aside from the African Development Fund allocation for the country, other resources can be mobilized for the country from the concessional ADF regional envelope subject to the identification of multinational projects; the AfDB window for private sector operations, other Bank’s financial instruments, in particular, the bilateral trust funds, and the funds allocated to the development of clean energy. Project co-financing with other donors constitutes another lever. The Bank will also play a leadership and catalytic role in mobilizing private sector resources through public-private partnerships (PPP) and co-financing with development partners.

This new CSP draws on experiences gained from the implementation of the 2011-2015 CSP. It is aligned with the country’s national strategy, the Bank’s 2013-2022 Ten-Year Strategy as well as other institutional strategies and policies, and it also supports the Sustainable Development Goals for Djibouti.

At the end of 2015, the Bank’s portfolio in Djibouti comprised 12 operations, representing a net commitments of US $149 million. These included 10 public sector operations accounting for 40% of commitments and two private sector operations, representing 60% of total commitments. The public sector operations, representing total commitments of US $59.3 million, comprise eight national operations and two regional operations. The agriculture sector leads with 52%, followed by the social sector with 17%, the water and sanitation sector with 14%, the energy sector with 9%, and the multi-sector projects with 8%.