World Bank Approves $20M Grant to Boost Public Finance and Digital Services in Djibouti

The project is expected to benefit both the public and government institutions by modernizing public administration and increasing access to essential services.

The World Bank has approved a $20 million grant from the International Development Association (IDA) to support Djibouti’s Economic and Financial Governance Project. The initiative aims to enhance the efficiency of tax administration, promote transparency in public expenditures, and expand citizens’ access to digital services, ultimately fostering better economic conditions and service delivery for the population.

The Economic and Financial Governance Project focuses on:

1. Strengthening Tax Policy and Administration: Improving efficiency in tax collection and administration to increase government revenue.
2. Enhancing Transparency in Expenditure Management: Boosting accountability in the allocation and use of public funds.
3. Expanding Digital Services for Citizens: Creating accessible online platforms to improve service delivery and foster stronger citizen-government engagement.

By improving public financial management, the project aims to create fiscal flexibility, enabling the government to sustain and expand investments that address key developmental challenges.

Benefits and Broader Impact

The project is expected to benefit both the public and government institutions by modernizing public administration and increasing access to essential services. Notably, it aligns with Djibouti’s Vision 2035 strategy, the medium-term public financial management (PFM) reform strategy (2024–2030), and the World Bank Group’s Country Partnership Framework (CPF).

“This initiative will significantly improve the efficiency of tax administration and expand access to digital services, leading to sustainable socioeconomic benefits for Djiboutians,” said Fatou Fall, Joint Resident Representative of the World Bank Group for Djibouti. She emphasized that better management of public funds would enhance fiscal health and contribute to long-term development.

Overcoming Challenges

Djibouti’s economy, heavily reliant on its strategic port, has faced setbacks due to overlapping crises, including the COVID-19 pandemic, climate change, and regional conflicts such as the Ethiopian civil war. These challenges have disproportionately impacted rural populations with limited access to public services and social programs.

To address these challenges, the project aims to enhance digital infrastructure, streamline tax systems, and ensure transparency in expenditure management. These measures are expected to accelerate economic recovery and bolster public trust in government institutions.

About the International Development Association (IDA)

The IDA, established in 1960, is one of the largest global funds for the world’s poorest nations, providing grants and low-interest loans for development projects. Over the past three years, the IDA has committed an average of $21 billion annually, with 61% allocated to Africa.

Future Outlook

The grant underscores the World Bank’s commitment to supporting Djibouti in achieving its development goals. By fostering fiscal efficiency and expanding digital services, the project is set to enhance the quality of life for citizens and strengthen the country’s resilience to future economic and environmental challenges.

The Economic and Financial Governance Project marks a significant step in Djibouti’s journey toward sustainable development and improved public service delivery.