World Bank OKs Ethiopia’s Country Partnership Strategy (CPS); nation moves onto PBS III phase costing $1.15 billion

26 Sep

By Keffyalew Gebremedhin

The Board of the World Bank’s Executive Directors today endorsed a new Country Partnership Strategy (CPS) for Ethiopia. With it comes 50-year term interest-free credit of $1.15 billion continuing to finance new and existing projects under Promoting Basic Services phase Three (PBS III), the agreements of which were already initialed in country in July 2012 amongst the different parties.

PBS III-related programs and projects would have two focus areas: (a) “Fostering competitiveness and employment” including improved delivery of infrastructure, and (b) “Enhancing resilience and reducing vulnerabilities”, including developing a comprehensive approach to social protection and risk management.

Of the total CPS financing, $600 million is directed to creating at the district level more growth, more jobs (teachers, health and agricultural extension workers), better health and education, water and sanitation programs, consistent with PBS’s longstanding objectives in Ethiopia.

The remaining $415 million is for expansion of the country’s road network, upgrading of five main roads that would play an important role, according to the Bank’s press release, in supporting economic growth over the medium- to long-term by providing better access for industrial, agricultural and tourism developments, and also serving beneficiaries in the project areas to access essential services.

The five main road construction projects relate to asphalting of a total of 434.5km, according to information to the local media by Ato Haji Ibsa of MOFED. The programed road projects cover Ambo – Woliso road 63.8km, Ankober – Debre Berhan 42km, Kombolcha – Bati – Mile 130km, Mizan – Dima 91.6km and Konso -Yabelo 107.1km.

The overall PBS financing, which is being mobilized by the World Bank, comes through co-financing arrangement amongst the country’s partners, in particular the European Union with 1.8 percent share, UK’s DFID 13.8 percent, AfDB 7.4 percent, Italy 0.4 percent, Austria 0.1 percent and other 7.6 percent. The contribution of the Ethiopian government is 51.2 percent, as indicated in AfDB’s – Promoting Basic Services (PBS III) of July 2012.

In June 2012, Ethiopia informed the African Development Bank its position on PBS III in writing:

The goal and purpose of PBS III will be be to contribute to the achievement of poverty reduction through expanding access to quality basic services while improving accountability and transparency. Although the architecture of PBS will remain largely the same, the Government recognizes the need for the programme to adapt and respond to emerging challenges, risks and opportunities. In PBS, the focus on results, effectiveness, equity and fairness in basic services as well as, fiduciary probity and predictability will be further enhanced. With respect to equity, PBS will complement existing sectoral initiatives through block grants to help bridge the gap in access to basic services beween the developing and the big regions.

The above extract from MOFED’s State Minister Ahmed Shide’s letter is reacting to the joint Ethiopia – donor findings about lack of transparency and even instances of failures by government to transfer to woreda’s the grant monies when it feels like. These problems were mentioned in my article of July 2011 in the context of the Ethiopian budgetary processes.

The relevant Ethiopian officials and donors undertook Joint Review and Implementation Support (JRIS) Mission and Joint Budget and Aid Review (JBAR) for PBS from May 9-19, 2011. Both sides agreed that what they saw were not entirely satisfactory from accountability and openness point of view. Consequently, donors made it clear to the government that if: (a) additionality of resources, and (b) budget support, discontinued in 2005, were to be reinstated, extra efforts needed to be exerted in PBS towards more openness, accountability and fairness.

There is no further indication whether that situation has changed.

Nevertheless, it is agreed in financing PBS III, the regions would receive their funding through the block grant approach, as in the past. The new formula for it were agreed last May in parliament.

Of PBS III, the World Bank’s Country Director for Ethiopia Guang Zhe Chen said:

    “PBS III will contribute to Ethiopia’s rapid progress towards achieving many of the Millennium Development Goals, by providing funding for crucial staff to help to improve key services such as education, health, food production, water and sanitation, and rural roads. Promoting improved access to quality, decentralized basic services is also central to the core elements of Ethiopia’s new CPS.”

Related materials:

Government of Ethiopia and AfDB Sign US$ 251-million Loan Agreement to Finance Basic Services

See Appendix 1 for Letter of Ethiopia’s assurances and development policy direction: PROMOTING BASIC SERVICES (PBS – III)

Transforming Ethiopia TE

One Response to “World Bank OKs Ethiopia’s Country Partnership Strategy (CPS); nation moves onto PBS III phase costing $1.15 billion”

  1. Awetash September 28, 2012 at 02:44 #

    The former first lady Azeb Mesfin being the CEO of “EFFORT” and a polit Bureau member of the TPLF knowing what the CEO she ousted named Sebhat Negga is planing to do to the prime minster Hailemariam Desalegn and herself. Hailemariam Desalegn is scared for his safety and the safety of his family if he moves into the palace compound which is used as a military camp by TPLF mercinaries.The former Azeb Mesfin is refusing to move out of the palace and give the new Prime Minster Hailemariam Desalegn to move into it so she can stay as the CEO of Endownment Fund For Rehabilitating Tigray (EFFORT) a non-profit she and her husband been embezling for long.

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