Djibouti: African Development Bank validates update of Country Strategy Paper and extension until 2022

The Board of Directors of the African Development Bank approved, Monday 09 November 2020 in Abidjan, the update and extension until December 2022, of the Country Strategy Paper (CSP) of Djibouti for the period 2016 -2020, pending the new five-year development strategy in preparation.

The CSP articulates how the Bank intends to support development efforts over a given period in a regional member country (RMC). The strategy is generally formulated in a participatory manner, guided by selectivity and aligned, on the one hand, with the development objectives of the countries embodied in the national development strategies or plans, and on the other hand, with the strategic priorities and operational operations of the Bank.

Djibouti’s 2016-2020 CSP was aligned with the country’s development objectives defined in the « Strategy for Accelerated Growth and Promotion of Employment » (SCAPE) for the period 2015-2019. The SCAPE came to an end in December 2019 and a new five-year development strategy comprising the new medium-term development objectives of Djibouti, in phase with the “Vision Djibouti 2035”, must be finalized and serve as a basis for the development of ‘a new complete DSP for Djibouti. As this new national strategy has not yet been approved, and in order to ensure a stable transition period necessary to plan and deliver concrete results, pending the availability of a new complete CSP for Djibouti, the directors of the Bank have decided an update and extension until December 2022 of the 2016-2020 CSP.

The indicative financing program covering the period of the updated and extended CSP until the end of 2022 includes four operations with an estimated cost of 13 million euros (11 million units of account) mainly covered by the concessional resources of the African Development Fund.

The update and extension of Djibouti’s 2016-2020 CSP proposes, on the one hand, to refocus the Bank’s strategic orientation for more efficiency in its interventions, given the limited volume of its financing in the country. It also aims to strengthen the country’s resilience in the face of multiple factors of fragility, in order to trigger a real dynamic of structural transformation of the country in the perspective of the « Djibouti 2035 Vision », the ambition of which is to make the country the flagship of the Red Sea and a commercial and logistics hub in East Africa.

 

The update and extension of Djibouti’s 2016-2020 CSP revolves around a single pillar on the « Development of sustainable and quality socio-economic infrastructure in the energy and agriculture sectors. », While taking into consideration cross-cutting issues such as institutional capacity building, gender, climate change and private sector development. This strategic orientation differs somewhat from that of the 2016-2020 CSP, which was based on the two

following pillars: « Development of socio-economic infrastructure in the energy and health sectors » and « Support for good governance through the strengthening of institutional capacities. The choice of the agricultural sector over the health sector is based on the need for urgent intervention in this sector given the persistent food insecurity exacerbated by recurrent locust plagues, the effects of climate change and the impact of the Covid-19 crisis. In addition, the health sector benefited in 2020 from substantial assistance from technical and financial partners, including the Bank, as part of the response to the Covid-19 crisis.

 

 

The four operations of the indicative financing program for the extension period of the CSP (2021-2022) are as follows: the multinational investment project dedicated to the second electricity interconnection line between Ethiopia and Djibouti, the project of  » agricultural transformation investment (feasibility for value chains and creation of a national center for the genetic improvement of goats in Djibouti), the multinational program to strengthen resilience for food and nutrition security in the Horn of Africa , and the institutional support project on reform and strengthening of debt management.

 

“The extension of the 2016-2020 CSP will allow the Bank to maintain its support to Djibouti until the next CSP. In this context of Covid-19, the Bank is more than ever at the side of its regional member countries like Djibouti to help them cope with the health, economic and social consequences of the pandemic ”, declared Nnenna Nwabufo, Acting Director General from the African Development Bank for East Africa.

 

During the 2016-2020 CSP implementation period, Djibouti recorded an average annual growth of 6% of its real GDP until 2019, and social indicators have improved. In 2020, Djibouti’s GDP is estimated at + 1.3% in the baseline scenario and -0.5% in the Bank’s pessimistic scenario, due to the global economic slowdown due to Covid-19. For 2021, the Bank expects economic growth of 9.5% (baseline scenario) and 5.2% (pessimistic scenario).

The African Development Bank has expressed satisfaction with the implementation of the 2016-2020 CSP in terms of the commitment of concessional resources allocated to Djibouti. Indeed, as of July 31, 2020, the Bank approved seven operations for a total amount of 69 million euros (57.85 million UA) out of a forecast of 36.8 million euros for the period of the CSP, i.e. a resource commitment rate of 186.6%.

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