Ethiopia, WB sign UPSNP $300 mln loan agrt on improving urban income of poorest of the poor – the rural productive safety net program (PSNP) extension

13 Jan

Editor’s Note:

    Turning Ethiopia’s economic growth into inclusive growth with World Bank resources. It is modeled after the rural productive safety net program (PSNP), whose success could not exceed in rural areas beyond keeping body and soul together for the poorest of the poor!


Posted by The Ethiopia Observatory (TEO)

ADDIS ABABA, Jan. 12 (Xinhua) — Ethiopia and the World Bank (WB) on Tuesday signed a loan agreement of 300 million U.S. dollars, which will be used to finance urban productive safety net project in the East African country.

Abdulaziz Mohamed, Ethiopian Minister of Finance and Economic Cooperation (MoFEC), and Carolyn Turk, WB Country Director for Ethiopia, signed the agreement at a ceremony held on the premises of MoFEC in Ethiopia’s capital Addis Ababa.

The urban productive safety net project, which will be implemented over five years with a total cost of 450 million dollars, aims to improving income of urban poor households and establishing urban safety net mechanisms in Ethiopia.

The objective will be achieved through provision of cash transfers, financial and technical support to access livelihood opportunities, building the capacity of institutions to effectively deliver the support, and developing core systems for delivery of safety nets and complementary livelihood services, according to MoFEC.

The urban safety net project was inspired by the success gained by the rural productive safety net project implemented over several years since 2005 here in the country, said Abdulaziz during the signing ceremony.

The Ethiopian Government will contribute 150 million dollars of the project’s total cost of 450 million dollars, according to the Minister.

“Looking at the difference made by the rural safety nets on the lives of the vulnerable population, the government of Ethiopia decided to initiate a similar program to support the poorest segment of the urban population,” said the Minister.

“This first phase is envisaged to support over 600,000 beneficiaries in 11 cities in Ethiopia,” he said.

The urban productive safety net project (UPSNP) is the first flagship urban safety net in Africa, said the WB Country Director.

Together with the rural productive safety net project (RPSNP), the program will promote the Government commitment to expanding productive safety net to a national coverage, she added.

She further said UPSNP would contribute to the Government’s strategic commitment to promoting inclusive growth and ensuring shared prosperity.

“The project will contribute to the realization of Ethiopia’s Growth and Transformation Plan II (second GTP) ensuring that the urban poor and vulnerable receive a predictable safety net and the support they require to experience faster income growth,” said Turk.

The success of the project will depend on a strong implementation arrangement, capacity and commitment at all levels, noted the Director.

She said that the World Bank team would continue to provide the necessary technical support to the UPSNP project.

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