31 May 2016

East Africa: Horn of Africa - World Bank U.S.$175 Million Financing Supports Regional Initiative On Communities Hosting Refugees

press release

Washington — The World Bank Board of Executive Directors today approved $175 million in financing to help mitigate the impact of forced displacement on refugee-hosting communities in the Horn of Africa.

"While much of the world's attention has been on the refugees' crises in the Middle East, we must do much more to help African countries respond to the long-term forced displacement of millions of people," said World Bank Group President Jim Yong Kim. "Our financing for countries hosting refugees in the Horn of Africa should bring more stability to the region and offer more economic opportunities for people living in these areas."

The funding comes from the International Development Association (IDA), the World Bank's fund for the poorest, and includes $100 million to Ethiopia, $50 million to Uganda, $20 million to Djibouti - all at low to no-interest -- and a $5 million grant to the Intergovernmental Authority on Development (IGAD).

Despite rich human, social, and natural capital, the Horn of Africa region, home to 242 million inhabitants, suffers weak governance, insecurity, increasing environmental degradation, entrenched poverty, and other persistent development challenges. Conflict remains endemic, compounded by population growth and migration, high youth unemployment, imbalanced service provision, competition for scarce natural resources, and harsh climatic conditions, with increasingly frequent and severe droughts and floods.

The Development Response to Displacement Impacts Project (DRDIP) will help improve access to basic social services, expand economic opportunities, and enhance environmental management for communities hosting refugees in target areas of the three countries. This project is the first phase of an expanded program to include other countries affected by forced displacement.

The Horn currently hosts an estimated 9.5 million displaced persons, including more than 6.5 million internally displaced persons (IDPs) and about 3 million refugees. The majority are women and children, with many female-headed households. The presence of refugees strains already weak public services and economic opportunities, jeopardizing the resilience of host communities.

"Forced displacement is one of the most daunting challenges of our time, and Africa hosts around a quarter of the world's displaced, said Makhtar Diop, World Bank Vice President for Africa. He added, "The burden falls largely on host countries. With this support, we are looking beyond humanitarian assistance to long-term development solutions. It will help host communities become more resilient, facilitate the social and economic integration of refugees and internally displaced people, and stimulate local development. The project is a win for all."

Djibouti has been spared the instability affecting many of its neighbors, but faces significant challenges such as high levels of poverty and unemployment as well as cross-border threats. Refugees from war and conflict in neighboring countries are arriving in large numbers, exacerbating economic and social challenges. The project will help address vulnerabilities such as poverty and unemployment, deficits in human development and social service delivery, and limited access to basic infrastructure, while helping build resilience.

"Despite its many challenges, including limited natural resources and the often devastating impact of climate change, Djibouti continues to provide refuge for people fleeing conflict in neighboring countries. Our program will help strengthen economic and social conditions in areas welcoming refugees, to assist both host communities and refugees themselves," said Hafez Ghanem, World Bank Vice President for Middle East and North Africa.

The project supports the World Bank Regional Horn of Africa Initiative by developing interventions that help refugee-hosting areas. It focuses on building resilience by addressing negative environmental and economic impacts, and by investing in infrastructure to improve economic opportunities for refugees and host communities. Global experience shows that self-reliant refugees are better prepared to return to their countries of origin. The project also supports close collaboration with the UNHCR in seeking durable solutions to the refugee crisis.

Ethiopia has Africa's largest refugee population, and Uganda the third-largest. These refugees are settled close to international borders in communities facing extreme poverty. The project will improve these communities' access to basic social services and economic infrastructure, and help promote economic self-reliance and social development for refugees. It will make innovative use of government financing systems, structures, and institutions to deliver a development response to forced displacement.

The grant to IGAD will establish a regional secretariat for Forced Displacement and Mixed Migration to support a holistic regional response, backed by data, to influence interventions in both refugee-hosting and refugee-producing countries. It will support policy dialogue with member states and academic and research institutions on transitional and progressive solutions to displacement. It will help build countries' and institutions' capacities in the Horn and forge partnerships between humanitarian and development actors. IGAD's own capacity will also be strengthened to act both regionally and internationally on issues affecting the Horn of Africa.

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