Financing in the water, sanitation and hygiene (WaSH) sector in Ethiopia:

Synthesis Paper from the Finance theme: Financing in the water, sanitation and hygiene (WaSH) sector in Ethiopia
ii
Research-inspired Policy and Practice Learning in Ethiopia and the Nile region (RiPPLE)
is a five-year research programme consortium funded by the UK’s Department for International
Development (DFID). It aims to advance evidence-based learning on water supply and sanitation
(WSS) focusing specifically on issues of planning, financing, delivery and sustainability and the links
between sector improvements and pro-poor economic growth. The opinions expressed are those of
the authors and not of DFID.
RIPPLE Synthesis Papers take forward case study findings from a RiPPLE research theme, by providing further
analysis and offering sound policy recommendations.
RiPPLE Office, c/o WaterAid Ethiopia, Kirkos Sub-city, Kebele 04, House no 620, Debrezeit Road,
PO Box 4812, Addis Ababa, Ethiopia.
Acknowledgements
This paper is a synthesis of the case studies carried out in the Benishangul-Gumuz region (BG) of
Ethiopia by the RiPPLE Financing team, composed of:
• Tseguereda Abraham, Policy Officer WaterAid Ethiopia,
• Getnet Alemu, Associate Dean for Graduate Programs, College of Development Studies,
Addis Ababa University and
• Catarina Fonseca, Senior Programme Officer, International Water & Sanitation Centre (IRC).
The paper analyses and summarises the findings of the research done by the following researchers
and their organisations:
• Minilik Wube, Epherem Alemu and Dereje Ademe, Bureau of Water Resources,
Benishangul-Gumuz Region
• Girmaw Nemera and Mulatu Takele, Bureau of Finance and Economic Development,
Beinshangul-Gumuz Region
• Ayana Zewdie, Regional Administrative Council
• Abera Endeshaw, RiPPLE
The authors of this paper are Getnet Alemu Zewdu and David Thomas. Their efforts are
appreciated by the authors of this paper as well as the Financing team.
The work would not have been possible without the assistance of the RiPPLE Benishangul-Gumuz
Regional Facilitator, and the Woreda Facilitators, who provided valuable inputs to the planning and
activities in the Woredas.
Note about dates in this document
Ethiopia uses the Ge’ez calendar which is about seven years and nine months behind the Gregorian
calendar used in much of the world. Some of the data and dates used in this document were based
on the Ethiopian calendar. Dates have been converted to the Gregorian calendar for the purposes of
this international document. However, because the Ethiopian New Year begins in September, an
annual figure from the Ethiopian calendar does not exactly match any exact Gregorian calendar year.
Research-inspired Policy and Practice Learning in Ethiopia and the Nile region (RiPPLE)
iii
Contents
Executive Summary …………………………………………………………………………………………………. vi
1 Introduction ……………………………………………………………………………………………………….. 1
2 Financing and the WASH Sector in Ethiopia ……………………………………………………….. 2
2.1 Poverty reduction and water policy in Ethiopia …………………………………………………………………… 2
2.2 Aid modalities for the WASH sector in Ethiopia …………………………………………………………………. 3
2.3 How much progress been made? ………………………………………………………………………………………….. 4
2.4 Financing sources: Current situation ……………………………………………………………………………………. 6
2.5 Budget process principles: Transparency ……………………………………………………………………………… 7
2.6 Budget process principles: Accountability ……………………………………………………………………………. 7
2.7 Budgeting process for the water sector ……………………………………………………………………………….. 8
2.8 Cost recovery mechanisms …………………………………………………………………………………………………… 9
2.9 Unit costs: An overview from Ethiopia ………………………………………………………………………………… 9
3 Channel 1 Financing ………………………………………………………………………………………….. 13
3.1 Literature …………………………………………………………………………………………………………………………….. 13
3.2 Study findings: Budget allocation data ………………………………………………………………………………… 13
3.3 Recommendations ………………………………………………………………………………………………………………. 16
4 Matching Funds/Channel 2 Financing …………………………………………………………………. 18
4.1 Literature …………………………………………………………………………………………………………………………….. 18
4.2 Study findings ………………………………………………………………………………………………………………………. 19
4.3 Recommendations ………………………………………………………………………………………………………………. 22
5 Implications for Policy and Planning in Ethiopia …………………………………………………. 23
Key references ……………………………………………………………………………………………………..
Synthesis Paper from the Finance theme: Financing in the water, sanitation and hygiene (WaSH) sector in Ethiopia
iv
List of tables and figures
Figure 2.1 Respective shares of the budget allocation for Economic Services ……………………………….. 2
Figure 2.2: Schematic of funding channels to WASH projects …………………………………………………………. 3
Figure 2.3: Estimates of actual WASH spending in Ethiopia ……………………………………………………………… 6
Figure 3.1: Trends in capital and recurrent budget allocation in Benishangul-Gumuz (Birr) ………… 14
Figure 4.1: Discrepancies between requested and disbursed funds ……………………………………………….. 20
Figure 4.2: Average regional revenue collection plan and implementation, EFY 1997-1999
(2004/05 to 2006/07) ……………………………………………………………………………………………………… 21
Table 2.1: The Economist Democracy Index: Ethiopia, South Africa and Burkina Faso ………………… 8
Table 2.2: Rural water UAP costs …………………………………………………………………………………………………… 10
Table 2.3: Social sector spending to achieve MDGs as a {f92ba077b83ffdbb98b5e800a789343bb3519ecbbe3c056f98df8e149165c691} of gross domestic product
(GDP) ………………………………………………………………………………………………………………………………. 11
Table 2.4: Rural and urban sanitation investment needs assessment (2007-2012) (US$m) ………… 12
Table 3.1: Share of water sector budget from total regional budget …………………………………………….. 14
Table 3.2: Budget utilisation rate trends in water sector: Variance rate of study woredas
({f92ba077b83ffdbb98b5e800a789343bb3519ecbbe3c056f98df8e149165c691}) ……………………………………………………………………………………………………………………………………. 15
Acronyms
BoFED Bureau of Finance and Economic Development
BoWR Bureau of Water Resources
DAC Development Assistance Committee (OECD)
DFID UK Department for International Development
EC Ethiopian Calendar; runs from September to September.
Year 2000 EC corresponds with 2007/2008 Gregorian Calendar
EFY Ethiopian Fiscal Year
EWSSP Ethiopian Water Supply and Sanitation Project
EUWI European Union Water Initiative
GDP Gross Domestic Product
GNI Gross National Income
IDA International Development Association
M&E Monitoring and Evaluation

 

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