D’you hear the news? Djibouti City (AX) — The World Bank is coughing up another $90 million to beef up the Djibouti Regional Economic Corridor, a massive infrastructure project intended to improve regional connectivity and trade throughout the Horn of Africa.
This fresh capital injection totals the project’s financing to a hefty $160 million, building on an initial $70 million greenlighted back in December 2021.
The coin will go toward revamping and maintaining three segments of the Djibouti-Addis Southern Corridor, a vital trade artery linking Djibouti with nearby Ethiopia. Alongside, it will grease the wheels for transit facilitation measures and offer technical know-how to the Djibouti government for upgrading corridor management.
Also in the mix are plans for key access roads, climate-smart storage solutions, and auxiliary market facilities. Reserved spaces for women traders ensure everyone’s got a shot at this economic boon.
During his jaunt to the country, Ousmane Dione, World Bank Vice President for the Middle East and North Africa, said, “This added support will bolster Djibouti’s stance as a regional trade hub and brighten the lives of its populace. Plus, it nudges Djibouti closer to its Vision 2035 targets, aiming for a diversified economy and inclusive society.”
Perched at the juncture of pivotal global shipping lanes, Djibouti is a trade powerhouse in the Horn of Africa. It serves as a lifeline for landlocked Ethiopia, processing over 90% of its imports and exports. Ethiopian traffic brings in between $1.5 to $2 billion each year in tariffs and fees, making it a cornerstone of Djibouti’s economy, contributing a whopping 85% to the GDP. Launched in 2019, the corridor project is a facet of the Horn of Africa Initiative. Its goal? Deepening economic ties and fostering regional cooperation among Djibouti, Eritrea, Ethiopia, Kenya, and Somalia—some of the world’s most economically strapped nations.
“We are steadfast in leading the charge for regional development and integration,” said Djibouti’s Minister of Economy and Finance, Ilyas Moussa Dawaleh. He tipped his hat to the World Bank for its backing in boosting regional connectivity.
Despite its modest size, Djibouti sits astride major global shipping routes, like the Red Sea and the Indian Ocean, making it a significant player in both regional and international trade. However, it wrestles with vulnerabilities, such as an over-reliance on maritime transport and regional instability, not to mention a strong dependence on Ethiopian trade. Vision 2035 is Djibouti’s blueprint to diversify its economy and anchor its role as a regional trade nucleus.
Looking ahead, experts forecast Djibouti’s GDP will climb by 5.1% annually from 2024 through 2026, buoyed by increased demand for logistics services and infrastructural juggernauts like the Damerjog Industrial Park.
