World Bank approves project to improve trade connectivity and stimulate regional integration

The World Bank's Board of Directors approved on December 16, 2021 a $70 million 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 transit port in the East and Central African region.

According to the World Bank statement, "an improved, more efficient and safer road corridor will attract investment, facilitate regional and national trade, and create new jobs and economic opportunities, especially for women. The project is part of the Djibouti authorities' overall poverty reduction objective.

The Regional Economic Corridor Project will support the rehabilitation and upgrading of 42 kilometers of the Djibouti-Addis Ababa Southern Corridor, which connects otherwise landlocked Ethiopia to world markets via access to the port of Djibouti. The project will encourage the construction of infrastructure that is both climate resilient and complies with road safety standards. The operation will finance the deployment of intelligent transport systems to streamline administrative processes and improve the flow of goods while strengthening the capacity of institutions to manage roads. The planned interventions will also improve transit services and customs procedures to reduce delays along the corridor and clearance time at the port of Djibouti.

The project has 4 main components:

  • Component 1: Improvement of infrastructure and introduction of intelligent transport systems along the southern Djibouti-Addis corridor in Djibouti (Cost equivalent to US$80 million of which US$60 million from IDA, US$17 million from the Government of Djibouti, and US$3 million from the private sector)
  • Component 2: Improvement of transit services along the corridor (cost equivalent to US$5 million)
  • Component 3: Institutional strengthening and capacity building on performance-based contracts (PBC) and support to project implementation (cost equivalent to US$5 million)
  • Component 4: Emergency Response Component (CERC) (cost equivalent to US$ 0 million)