Economy

New World Bank Group Program to Boost Djibouti’s Efforts to Reduce Poverty

Published

3 years ago

October 3, 2021

The World Bank Group’s Board of Executive Directors on September 23, 2021 discussed the new 2022-2026 Country Partnership Framework (CPF) for Djibouti, which supports the country’s goal of reducing poverty through a strong focus on private sector development.

The five-year CPF guides the work of the World Bank, the International Finance Corporation (IFC) which focuses on the private sector in developing countries, and the Multilateral Investment Guarantee Agency (MIGA), which facilitates foreign direct investment through political risk insurance and credit enhancement guarantees.

“The new Country Partnership Framework for Djibouti seeks to take advantage of Djibouti’s strategic location, at the crossroads of regions and continents,” said Marina Wes, World Bank Country Director for Egypt, Yemen and Djibouti. “With a strong focus on poverty reduction and shared prosperity, our partnership will support private sector development to boost productivity and job creation, with a renewed emphasis on human capital development and governance.”

Creating a more conducive environment to develop the private sector is critical for building long-term resilience to economic shocks such as COVID-19. The CPF will aim to address the immediate needs related to the pandemic while supporting medium- to long-term reforms to create the right environment for inclusive and job-creating growth. Aligned with Djibouti’s Vision 2035 and guided by the priorities of the government’s national strategy, the program has two main focus areas:

To promote inclusive private sector-led growth, job creation and human capital by stimulating entrepreneurship and Small and Medium Enterprise (SME) development, and strengthening productive skills and access to jobs, including for women and youth. The World Bank Group will also support government efforts to promote private sector development in key sectors such as tourism, housing and agribusiness while continuing its engagement in energy and infrastructure and improving intra-regional connectivity.
To strengthen the role and capacity of the state by supporting the government’s efforts to improve access to and the delivery of basic services in health, education and water; and to promote the transparency, accountability and efficiency of the public sector with a focus on enhancing transparent management and public debt sustainability.

Throughout the two focus areas, the CPF will foster digital transformation, strengthen transparency to support good governance, and promote gender parity. To help strengthen Djibouti’s resilience to external shocks, regional integration will be core to the program which also maintains engagement in climate change adaptation, mitigation and disaster response.

The Djibouti Country Partnership Framework will support business environment reforms to boost productivity and encourage private investment in Djibouti with IFC and MIGA support.

“The private sector plays an essential role in creating jobs and promoting economic growth. IFC will continue to work closely with the government of Djibouti and with the World Bank to explore opportunities to support reforms that will improve Djibouti’s business environment and investment climate and help the country achieve its development goals,” said Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa.

Aligned with the World Bank’s regional strategy for the Middle East and North Africa, the Djibouti Partnership Framework is underpinned by the Systematic Country Diagnostics (SCD), the World Bank Group’s comprehensive analysis of the opportunities and challenges for Djibouti to achieve poverty reduction and shared prosperity in an inclusive and sustainable way. It builds on extensive consultations with a broad range of stakeholders including the government, private sector, civil society and development partners. Implemented jointly by the World Bank, IFC and MIGA, the CPF will span two International Development Association (IDA) cycles – IDA19 and IDA20.

“Our new Country Partnership Framework takes into account the global pandemic, its impact on Djibouti’s economy and population and current regional dynamics”, said Boubacar-Sid Barry, World Bank Resident Representative in Djibouti. “We will work closely with the authorities to support the new development program, with the goal of reducing poverty and achieving more sustainable and inclusive growth, while also boosting regional integration.”

The World Bank’s portfolio in Djibouti consists of 13 projects totaling US$248 million in financing from the International Development Association (IDA), the World Bank’s arm for the poorest countries. The portfolio is focused on education, health, social safety nets, energy, rural community development, urban poverty reduction, the modernization of public administration, governance, and private sector development with an emphasis on women and youth.

Up Next

FG Spent N1.47 Trillion on Debt Servicing in the First Half of 2021

Don't Miss

Nigeria Spent N445bn on Debt Servicing in Q2, Debts Hit N35tn – DMO

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Comments

Economy

FG to Hike VAT on Luxury Goods by 15%, Exempts Essentials for Vulnerable Nigerians

Published

6 hours ago

October 24, 2024

Bassey Marshall

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has announced plans by the Federal Government to raise the Value Added Tax (VAT) on luxury goods by 15% despite the ongoing economic challenges.

Minister Edun made this known in Washington DC, during a meeting with investors as part of the ongoing IMF/ World Bank Annual Forum.

While essential goods consumed by poor and vulnerable Nigerians will not be affected by the increase, Edun, however, the increase in VAT will affect luxury items.

He said, “In terms of VAT, President Bola Tinubu’s commitment is that while implementing difficult and wide-range but necessary reforms, the poorest and most vulnerable will be protected.

The minister also revealed that the bill is currently under review by the National Assembly and in due time, the government will release a list of essential goods exempted from VAT to provide clarity to the public.

“So, the Bills going through the National Assembly in terms of VAT will raise VAT for the wealthy on luxury goods, while at the same time exempting or applying a zero rate to essentials that the poor and average citizens purchase,” Edun explained.

Earlier in October, Investors King reported that the FG had removed VAT on diesel and cooking gas, among others to enhance economic productivity and ease the harsh reality of the current economy.

Economy

Global Debt-to-GDP Ratio Approaching 100%, Rising Above Pandemic Peak

Published

1 day ago

October 23, 2024

Samed Olukoya

The IMF sees countries debt growing above 100% of global GDP, Vitor Gaspar, head of the Fund’s Fiscal Affairs Department said ahead of the launch of the Fiscal Monitor (FM) Wednesday (October 23) in Washington, DC.

“Deficits are high and global public debt is very high and rising. If it continues at the current pace, the global debt-to-GDP ratio will approach 100% by the end of the decade, rising above the pandemic peak,” said Gaspar about the main message from the IMF’s Fiscal Monitor report.

The Fiscal Monitor is highlighting new tools to help policymakers determining the risk of high levels of debt.

“Assessing and managing public debt risks is a major task for policymakers. The Fiscal Monitor makes a major contribution. The Debt at Risk Framework. It considers the distribution of outcomes around the most likely scenario. The analysis in the Fiscal Monitor shows that debt risks are substantially worse than they look from the baseline alone. The framework should help policymakers take preemptive action to avoid the most adverse outcomes.”

Gaspar said that there’s a careful balance between keeping debt lower, versus necessary spending on people, infrastructure and social priorities.

“The Fiscal Monitor identifies three main drivers of debt risks. First, spending pressures from long term underlying trends, but also challenging politics at national, continental and global levels. Second, optimistic bias in debt projections. And third, increasing uncertainty associated with economic, financial and political developments.

Spending pressures from long term underlying trends and from challenging politics at national, continental and global levels. The key is for countries to get started on getting debt under control and to keep at it. Waiting is risky. The longer you wait, the greater the risk the debt becomes unsustainable. At the same time, countries that can afford it should avoid cutting too much, too fast. That would hurt growth and jobs. That is why in many cases we recommend an enduring but gradual fiscal adjustment.”

Economy

IMF Attributes Nigeria’s Economic Downgrade to Inflation, Flooding, and Oil Woes

Published

1 day ago

October 23, 2024

Iyanuoluwa Martins

The International Monetary Fund (IMF) has blamed the downgrade of Nigeria’s economic growth particularly on the effects of recent inflation, flooding and oil production setbacks.

In its World Economic Outlook (WEO) published on Tuesday, the Bretton Wood institution noted that Nigeria’s economy has grown in the last two quarters despite inflation and the weakening of the local currency, however, this could only translate to 2.9 percent in 2024 and 3.2 percent in 2025.

“Nigeria’s economy in the first and second quarter of the year grew by 2.98% and 3.19% respectively amid a surge in inflation and further depreciation of the Naira.

“The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023, representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate,” the report seen by Investors King shows.

The spokesperson for IMF’s Research Department, Mr Jean-Marc Natal, said agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production were key drivers of the revision.

“There has been, over the last year and a half, some progress in the region. You saw, inflation stabilising in some countries, going down even and reaching a level close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.

“In terms of growth, it’s quite uneven, but it remains too low. The other issue is that in the region it is still high. It has stopped increasing, and in some countries already starting to consolidate, but it’s still too high, and the debt service is, correspondingly, still high in the region,” he said.

It also expects to see some changes in Nigeria’s inflation, which has slowed down in July and August before rising to 32.7 percent in September 2024.

“Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.

“However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September,” the report said.