69521 An AMCOW Country Status Overview Water Supply and Sanitation in Ethiopia Turning Finance into Services for 2015 and Beyond The first round of Country Status Overviews (CSO1) published in 2006 benchmarked the preparedness of sectors of 16 countries in Africa to meet the WSS MDGs based on their medium-term spending plans and a set of ‘success factors’ selected from regional experience. Combined with a process of national stakeholder consultation, this prompted countries to ask whether they had those ‘success factors’ in place and, if not, whether they should put them in place. The second round of Country Status Overviews (CSO2) has built on both the method and the process developed in CSO1. The ‘success factors’ have been supplemented with additional factors drawn from country and regional analysis to develop the CSO2 scorecard. Together these reflect the essential steps, functions and results in translating finance into services through government systems—in line with Paris Principles for aid effectiveness. The data and summary assessments have been drawn from local data sources and compared with internationally reported data, and, wherever possible, the assessments have been subject to broad-based consultations with lead government agencies and country sector stakeholders, including donor institutions. This second set of 32 Country Status Overviews (CSO2) on water supply and sanitation was commissioned by the African Ministers’ Council on Water (AMCOW). Development of the CSO2 was led by the World Bank administered Water and Sanitation Program (WSP) in collaboration with the African Development Bank (AfDB), the United Nations Children’s Fund (UNICEF), the World Bank and the World Health Organization (WHO). This report was produced in collaboration with the Government of Ethiopia and other stakeholders during 2009/10. Some sources cited may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the collaborating institutions, their Executive Directors, or the governments they represent. The collaborating institutions do not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the collaborating institutions concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to wsp@worldbank.org The collaborating institutions encourage the dissemination of this work and will normally grant permission promptly. For more information, please visit www.amcow.net or www.wsp.org Photograph credits: Andreas Knapp © 2011 Water and Sanitation Program Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond An AMCOW Country Status Overview Water Supply and Sanitation in Ethiopia Turning Finance into Services for 2015 and Beyond 1 An AMCOW Country Status Overview Strategic Overview Despite its poor and largely rural population, and despite a of spending due to the lack of a national monitoring and historic legacy of low investment in infrastructure, Ethiopia evaluation system. has been making substantial progress in increasing water supply coverage. While achievement of the ambitious plan In relation to sector reform, over recent years Ethiopia has for universal access will be a challenge, reaching the water been progressively pushing forward on a number of fronts, supply Millennium Development Goal (MDG) target looks including: achievable, irrespective of data source used. For sanitation, progress is also being made in increasing coverage through • Establishment of clear, decentralized institutional promotion of behavior change and low-cost technology responsibilities for basic service delivery across all tiers of solutions. The achievement of both government and MDG government. targets for sanitation appear less likely, but recent progress • Development of a strong policy and planning framework, has been promising, on the back of a strong policy of including the ambitious government-led Universal Access increased promotion of hygiene and sanitation behavior Program, backed by increased resource mobilization from change. both government and donor sources. • Progress made towards harmonization of fragmented Using government coverage figures, estimates for donor finance and review processes under the emerging required and anticipated investment suggest that rural Sectorwide Approach agenda, and its Annual Multi- water supply is almost sufficiently resourced to reach the Stakeholder Forum and Joint Technical Reviews. ambitious national targets, with a new emphasis on low- • Attempt made to institutionalize cross-sector coordination cost technologies and recent budget growth from both under the Water Supply, Sanitation and Hygiene (WASH) government and donors. For urban water supply, there is program. a shortfall in anticipated investment, even assuming more • Deployment of over 30,000 Health Extension Workers than half the total costs will be met by users. Due to the nationally, whose mandate includes significant sanitation policy of users paying the full costs of sanitation hardware, and hygiene promotion activities. there is no projected capital financing gap for household • Development of an M&E framework, and design of a urban and rural sanitation. However, the level of investment national water supply, sanitation, and hygiene inventory in promotional work is likely to be insufficient to encourage process. household investment at the substantial rate needed to meet the national targets. In addition, given that there is Although this represents significant progress, many of these no agreed investment program setting out urban sanitation reforms remain incomplete, and a number of ongoing technology choices, investment requirements for the challenges must be surmounted to establish the institutional subsector may be underestimated. Outside of household capacity to achieve and sustain MDG coverage levels. These sanitation, a needs assessment of institutional sanitation in include, most importantly: 2007 estimated the costs of sanitation for existing schools and health facilities to be an additional US$510 million. • Continued severe limitations in M&E, which leave the sector uncertain as to its progress and the effectiveness of The ability of the country to sustain progress is difficult interventions and constrain opportunities for incremental to predict due to the major data challenges that continue learning. to exist in the sector. Monitoring and evaluation (M&E) is • Low financial utilization rates for donor funds, stemming weak, especially relative to the level of investment, and from incomplete harmonization and alignment with core very little is known regarding the effectiveness or impact government systems. 2 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond • Significant human resource capacity challenges, in In relation to these challenges, the following priority actions particular at woreda (that is, district) level, despite can be identified for water and sanitation in Ethiopia, many large but disparate program-based capacity building of which are in line with the undertakings identified from the initiatives. 2009 Multi-Stakeholder Forum. Agreed priority actions to tackle these challenges, and ensure finance is effectively turned into services, are: Rural water supply • Increase sustainability of infrastructure through strengthening of cost recovery mechanisms and the development of effective spare parts supply chains. • Increase operational budgets and continue to build capacity at woreda level to support implementation of the new low-cost technology strategy. • Implement the national WASH inventory to establish baseline data on rural water supply infrastructure. Urban water supply • Implement cost recovery policies by strengthening capacity and financial autonomy of town utilities. • Increase focus on water resource sustainability through encouragement of demand management approaches and reduction in unaccounted-for water. Rural sanitation and hygiene • Implement sanitation and hygiene component of the national WASH inventory to establish baseline data. • Develop a strategic national action plan for sanitation, with time-bound and budgeted activities, as has been done for the water supply sector. • Develop a national guideline for Community-Led Total Sanitation and Hygiene, to define the conceptual framework for all actors in the sector. Urban sanitation and hygiene • Formulate a clear Urban Sanitation Strategy, including delineation of responsibilities between different government agencies, an investment program, and financing strategy. This is needed to set out urban sanitation hardware requirements, technology choices and how they will be financed. 3 An AMCOW Country Status Overview 4 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond Contents ........................................................................................................................... 6 Acronyms and Abbreviations. 1. .................................................................................................................................................... 7 Introduction. 2. ............................................................................................... 8 Sector Overview: Coverage and Finance Trends. 3. Reform Context: Introducing the CSO2 Scorecard. ........................................................................................ 12 4. Institutional Framework................................................................................................................................. 14 5. .................................................................................................................. 16 Financing and its Implementation. 6. Sector Monitoring and Evaluation.................................................................................................................. 18 7. Subsector: Rural Water Supply....................................................................................................................... 19 8. ..................................................................................................................... 21 Subsector: Urban Water Supply. 9. Subsector: Rural Sanitation and Hygiene........................................................................................................ 23 10. ...................................................................................................... 25 Subsector: Urban Sanitation and Hygiene. Notes and References.................................................................................................................................... 27 5 An AMCOW Country Status Overview Acronyms and Abbreviations AfDB African Development Bank OPEX Operations expenditure AMCOW African Ministers’ Council on Water PASDEP Plan for Accelerated and Sustainable CAPEX Capital expenditure Development to End Poverty CSA Central Statistical Agency PBS Protection of Basic Services Program CSO2 Country Status Overviews (second round) PRSP Poverty Reduction Strategy Paper ETB Ethiopian Birr RSH Rural sanitation and hygiene EU European Union RWS Rural water supply GNI Gross national income SDPRP Sustainable Development and Poverty HEW Health Extension Worker Reduction Program HH Household SSA Sub-Saharan Africa JMP Joint Monitoring Programme (UNICEF/ WHO) SWAp Sector-Wide Approach LIC Low-income country UAP Universal Access Plan LIG Local Investment Grant UNICEF United Nations Children’s Fund M&E Monitoring and evaluation USH Urban sanitation and hygiene MDG Millennium Development Goal UWS Urban water supply MoWR Ministry of Water Resources WASH Water, sanitation and hygiene NGO Nongovernmental organization WHO World Health Organization O&M Operations and maintenance Woreda A district WSP Water and Sanitation Program Exchange Rate: US$1 = 14.5 Ethiopian Birr.1 6 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond 1. Introduction The African Ministers’ Council on Water (AMCOW) commissioned the production of a second round of Country Status Overviews (CSOs) to better understand what underpins progress in water supply and sanitation and what its member governments can do to accelerate that progress across countries in Sub-Saharan Africa (SSA).2 AMCOW delegated this task to the World Bank’s Water and Sanitation Program and the African Development Bank (AfDB), which are implementing it in close partnership with UNICEF and the WHO in over 30 countries across SSA. This CSO2 report has been produced in collaboration with the Government of Ethiopia and other stakeholders during 2009/10. The analysis aims to help countries assess their own service delivery pathways for turning finance into water supply and sanitation services in each of four subsectors: rural and urban water supply, and rural and urban sanitation and hygiene. The CSO2 analysis has three main components: a review of past coverage; a costing model to assess the adequacy of future investments; and a scorecard which allows diagnosis of particular bottlenecks along the service delivery pathway. The CSO2’s contribution is to answer not only whether past trends and future finance are sufficient to meet sector targets, but what specific issues need to be addressed to ensure finance is effectively turned into accelerated coverage in water supply and sanitation. In this spirit, specific priority actions have been identified through consultation. A synthesis report, available separately, presents best practice and shared learning to help realize these priority actions. 7 An AMCOW Country Status Overview 2. Sector Overview: Coverage and Finance Trends Coverage: Assessing Past Progress Ethiopians by 2012. Following the update of the Plan for Accelerated and Sustainable Development to End Poverty All sources confirm that water supply coverage in Ethiopia is on (PASDEP-2) in 2010, these targets were adjusted slightly a strong upward trajectory. According to official government to 98.5 percent coverage, and the target date extended to data, water supply coverage has risen from 19 percent in 2015.5 These are still well above the MDG targets. 1990 (11 percent rural, 70 percent urban) to 66 percent in 2009 (62 percent rural, 89 percent urban).3 As Figure 1 Investment Requirements: Testing the shows, based on the official government data, Ethiopia has Sufficiency of Finance already met the MDG target of 60 percent.4 Estimates of current coverage from the international Joint Monitoring Although past trends in coverage are an important Programme (JMP) are significantly more cautious, due to a determinant for whether Ethiopia will meet its targets, range of factors (see Box 1). Nevertheless, the JMP data still recently there has also been a significant increase in portray a remarkable increase in coverage of over 1 million financial resources committed to the sector. If this people per year (1990–2008). For sanitation, performance is continues, increased investments could accelerate the less promising, although figures from the Ethiopian Ministry progress projected in the above charts. However, increasing of Health show an increase to 39 percent coverage by 2009 coverage will also correspond to increasing rehabilitation (30 percent rural, 88 percent urban) from a baseline of close costs, and it will be important that these are accurately to zero in 1990. factored into budget projections. National targets for Ethiopia are embedded in the Universal The required investment costs presented for water supply Access Plan (UAP), an ambitious national plan launched by are based on budget estimates and costing assumptions the Government of Ethiopia in 2005 with the objective of developed by the Ministry of Water Resources for the achieving full access to water supply and sanitation for all updated PASDEP-2. These figures have then been Figure 1 Progress in water supply and sanitation coverage Water supply Sanitation 100% 100% 80% 80% Coverage Coverage 60% 60% 40% 40% 20% 20% 0% 0% 1985 1990 1995 2000 2005 2010 2015 2020 1985 1990 1995 2000 2005 2010 2015 2020 Government estimates Government target Government estimates Government target JMP estimates MDG target JMP estimates MDG target Sources: Sustainable Development and Poverty Reduction Program Appraisal Report (SDPRP) (2003), Central Statistical Agency (CSA) (2009), MoWR, Ministry of Health, and JMP 2010 report. 8 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond incorporated in the costing model developed for the Box 1 CSO2. Since the PASDEP-2 budget focused primarily on JMP versus national coverage data in Ethiopia water supply, the costing model for sanitation has been prepared based largely on data collected for the CSO2, For Ethiopia there is a striking difference between in collaboration with the Ministry of Health and other JMP data and the government’s most recent estimates. This is due to a number of factors: stakeholders. • Lack of recent household surveys available Using the CSO2 costing model, the estimates of capital as a basis for JMP estimate (most recent is investment requirements (CAPEX) to meet government the 2005 Demographic Health Survey). As a targets for water supply and sanitation are compared with result, the JMP does not capture the recent anticipated public CAPEX and the assumed contribution acceleration of coverage which is believed from households, based on user contribution policy to have occurred as a result of increased (Figure 2). Investment requirements for operations and government and donor investment. In maintenance (OPEX) are assessed separately (Table 2). It addition, even if more up-to-date, positive should be noted that the CSO2 model predicts somewhat household survey data were available, this higher OPEX costs than under the PASDEP-2 budget. would not be fully reflected in the JMP CAPEX requirements, being based on the same input estimate due to the linear regression method data, are closely aligned. used to calculate coverage. • Difference in definitions: For example, the Beginning with water supply, the total investment required government sanitation coverage estimates each year to achieve the adjusted UAP targets, based on include ‘basic’ technology options, rather the current official coverage figures, is US$260 million. than counting only ‘improved’ facilities as the Of this, US$169 million per year would need to be met JMP does. through public investment, to leverage sufficient user • Weaknesses in M&E systems resulting in contributions—assuming a user contribution policy of 55 a general lack of verifiable coverage data percent for urban and 10 percent for rural can be met. (highlighted as a priority action throughout this report). Figure 2 shows that, based on current estimated commitments from government, donor, and Figure 2 Required vs. anticipated (public) and assumed (household) expenditure Water supply Sanitation Required CAPEX Required CAPEX Required Required OPEX OPEX 0 100 200 300 400 0 500 1000 US$ million/year US$ million/year Public CAPEX (anticipated) Public CAPEX/software (anticipated) Household CAPEX (assumed) Household CAPEX (assumed) CAPEX deficit Source: CSO2 estimates. 9 An AMCOW Country Status Overview nongovernmental organization (NGO) sources, the type of sanitation infrastructure that is appropriate.6 Thus anticipated public investment of US$163 million per year, the likely implications of financing urban sewerage cannot and leveraged household contributions of US$73 million yet be fully captured in the costing model. per year, are currently slightly below what would be required to achieve the government UAP target, resulting In addition, a needs assessment of institutional sanitation in an annual CAPEX deficit of around US$24 million. in 2007 estimated the costs of sanitation for existing schools and health facilities to be an additional US$510 The picture for sanitation is very different, due to the million.7 national policy of increasing coverage through promotion of sanitation and hygiene behavioral change, rather than In terms of anticipated public investment for sanitation, by offering public subventions for household sanitation precise estimates of financial commitments are facilities. The model is aligned with this general policy: problematic, as program budgets do not always due to the low current coverage levels, total investment differentiate between water and sanitation investments. requirements for sanitation hardware are estimated to However, a rough estimate puts the total anticipated be US$795 million per annum—all of which is expected investment at around US$50 million per year. The majority to be contributed by households (Figure 2). It should be of this is expected to be utilized for promotion work, both admitted that this is a somewhat simplified picture. First, via the recurrent budget invested in the promotional some donor programs subsidize household sanitation activities of Health Extension Workers (HEWs) and via in the case of vulnerable groups, but there is limited donor programs. This will be essential if households are information on the amounts involved. Second, the policy to be persuaded to finance and build their own facilities, suggests that public capital investment will be required as the policy requires. The CSO2 model does not provide for major urban sewerage works. Around US$18 million an estimate of the level of investment required for per year is budgeted by the Ministry of Water Resources such ‘software’ with which to compare this anticipated (MoWR) for rehabilitation and expansion of the sewerage spending.8 A further large share of the anticipated public network in Addis Ababa. However, it is not clear whether finance depicted in Figure 2 is the budgeted sum for these costs will ultimately be fully recovered under the zero sewerage in Addis Ababa (outside of the capital, the low sanitation policy. Addressing the issue of urban sewerage urban capital budget allocations reflect the low level of in the city will first require an economic evaluation of the urban sewerage system coverage in Ethiopia). Table 1 Coverage and investment figures9 Coverage Target Population CAPEX Anticipated Assumed Total requiring requirements public CAPEX HH deficit access CAPEX 1990 2009 2015 Total Public Domestic External Total % % % ‘000/year US$ million/year Rural water supply 11% 62% 99% 6,029 117 105 46 68 114 13 - Urban water supply 70% 89% 99% 617 143 64 3 46 49 60 34 Water supply total 19% 66% 99% 6,646 260 169 49 114 163 73 24 Rural sanitation 4% 30% 99% 9,363 692 0 7 23 30 692 - Urban sanitation 25% 88% 99% 634 102 0 19 0 19 102 - Sanitation total 7% 39% 99% 9,997 795 0 26 23 49 795 - Sources: For coverage: SDPRP Appraisal Report (2003), CSA (2009), MoWR, Ministry of Health and JMP 2010 report; for investment data: CSO2 costing. 10 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond Table 2 management processes. In 2006/07 and 2007/08, for Annual O&M requirements example, combined utilization rate amongst major donor programs was below 50 percent, although this trend Subsector O&M appears to have improved in more recent years. However, US$ million/year given the large share of donor resources in the sector, Rural water supply 16 continued underutilization will of course increase the gap Urban water supply 66 between CAPEX required and CAPEX invested. Water supply total 82 Rural sanitation 68 A further issue relates to cost recovery for operation and Urban sanitation 36 maintenance (O&M) (Table 2). As in many countries, in Sanitation total 104 Ethiopia there is an implicit assumption that O&M costs Source: CSO2 costing. will be recovered from users, though in practice this is If government data and the respective UAP targets not always achieved. If any annual O&M requirement are switched for JMP coverage data and MDG targets, has to be subsidized from public sources, for example to investment requirements would be lower, since the utilities that do not achieve operational cost recovery, it required coverage increase (from around 38 percent to reduces the amount available for capital investment. Table 59 percent for water supply and 12 percent to 52 percent 2 shows that, particularly for urban water supply, failure for sanitation) is less, and the rehabilitation requirements to generate full operational cost recovery could lead to a lower (due to estimated lower existing capital stock). Using substantial additional drain on public resources. JMP figures also increases rural investment requirements relative to urban, due to the different rural-urban These considerations are only part of the picture. definitions employed. Bottlenecks can, in fact, occur throughout the service delivery pathway—all the institutions, processes, and actors There are a number of reasons why the above depiction of that translate sector funding into sustainable services. investments may be overoptimistic. The major reason for Where the pathway is well developed, sector funding caution relates to the issue of utilization rates, since this should turn into services at the estimated unit costs. model derives estimates of anticipated investment from Where it is not, the above investment requirements may near-term, budgeted allocations. In Ethiopia, many donor be gross underestimates. The rest of this report evaluates programs have been plagued by low levels of budget the service delivery pathway in its entirety, locating the utilization, in particular those in the urban subsectors, bottlenecks and presenting the agreed priority actions to requiring more complex procurement and financial help address them. 11 An AMCOW Country Status Overview 3. Reform Context: Introducing the CSO2 Scorecard The current era of reform in Ethiopia began in the early the MDGs. The National Water Resources Management 1990s, with the establishment of the present system of Policy (1998) and Strategy (2000) provide guidance government. Prior to that, there was little in the way for investments in rural and urban water supply and of policies or programs to address water and sanitation sanitation. The sector has also been given high priority in needs; the current government, therefore, inherited a the most recent Poverty Reduction Strategy Paper (PRSP), legacy of inadequate water and sanitation infrastructure, the Plan for Accelerated and Sustainable Development to as recorded in the very low coverage levels at the beginning End Poverty (PASDEP), with budget allocations increasing of the 1990s. to some extent to match the heightened political commitment (although it appears not sufficiently to meet The historical context helps to understand the current targets). In 2005, this commitment was extended through state of the service delivery pathway, which is explored the proclamation of the UAP, which laid out a plan for throughout the report with reference to the CSO2 near 100 percent water and sanitation coverage by 2012.11 scorecard—an assessment tool providing a snapshot of Although highly ambitious, this program demonstrated the reform progress along the pathway.10 The CSO2 scorecard clear commitment by the government to improving access assesses the building blocks of service delivery in turn: to water and sanitation, especially in rural Ethiopia. three building blocks which relate to enabling services, three which relate to developing new services, and three The enabling environment for sanitation is somewhat which relate to sustaining services. Each building block is lagging behind that for water supply, although the assessed against specific indicators and scored from 1 to development of a National Sanitation and Hygiene Strategy 3 accordingly. in 2006 marked a notable effort by the Ministry of Health to address the challenge. Importantly, this also articulated Since the 1990s, reform effort has concentrated a strategic shift towards low cost sanitation solutions ‘upstream’ in the service delivery pathway—on the enabling environment for basic service delivery. This Figure 3 has included a transformation in the institutional Average scorecard results for enabling, arrangements for basic service provision through an sustaining, and developing service delivery, and ambitious but progressive decentralization process. This peer-group comparison began with devolution to regional governments in the Enabling 1990s which, at a sector level, provided Regional Water Bureaus with a large degree of autonomy over the development of their water supply services. Meanwhile, the MoWR was established in 1995 and, in relation to water supply and sanitation, was primarily tasked with policy, coordination, and regulatory functions. This was followed by a second wave of decentralization beginning in 2004, with responsibilities for basic service delivery being further devolved to the district (or woreda) level, although regional government continues to provide districts with significant technical support, especially for more complex technologies. Sustaining Developing Ethiopia average scores At the federal level, the MoWR has put in place many Averages, LICs, GNI p.p. <=$500 of the necessary policies, strategies, sector development programs, and implementation arrangements to achieve Source: CSO2 scorecard. 12 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond coupled with large-scale investment in promotion, which Ethiopia’s chances of achieving both MDG and government would leverage the government’s huge and expanding water supply targets. network of HEWs (over 30,000) already employed across the country. The effects of these reforms are beginning to be seen in the development of services on the ground, notwithstanding the Most recently, reform efforts have focused on improving weakness of monitoring data. The scorecard performance the cross-sector integration of Water Supply, Sanitation for indicators relating to enabling and developing services and Hygiene (WASH) interventions. This effort began in is reasonable, especially when compared to Ethiopia’s 2005 under an European Union (EU) ’Country Dialog’, economic peers—countries with a GNI (gross national a reform process which helped to put in place WASH income) below US$500 per capita (Figure 3). coordination structures across the water resources, health, and education sectors. The process also helped to While there are challenges relating to enabling and catalyze a major harmonization and alignment push in the developing services in both the water supply and sanitation sector, which included institutionalizing an annual Multi- subsectors, such as fully utilizing available budgets, the Stakeholder Forum, bi-annual Joint Technical Reviews, and greatest challenges remain with respect to sustaining services, a number of financial harmonization initiatives discussed including generating sufficient finance for maintenance further later on. and (ultimately) for expansion; in the case of sanitation, a significant challenge remains in relation to translating Finally, a review of progress against the UAP targets for promotional activities into sustained uptake and use. rural water supply, undertaken by the MoWR in 2008, recommended a strategic shift towards lower-cost Sections 4 to 6 highlight challenges across three thematic technologies and an increased emphasis on self-supply, areas: the institutional framework, finance, and M&E. to achieve the ambitious UAP targets in a financially The related scorecard indicators which give an empirical constrained environment. Although the impact of this basis for evaluation are highlighted in each section. The strategy change has yet to be seen, the success of this scorecards for each subsector are presented in their approach is likely to have important implications for entirety in sections 7 to 10. Table 3 Key dates in the reform of the sector in Ethiopia Year Event 1992 Decentralization of water supply development to regions 1995 Establishment of Ministry of Water Resources 2000 National Water Policy adopted 2002 15-year Water Sector Development Program developed 2002 Beginning of establishment of autonomous urban water utilities 2003 National Water Supply and Sanitation Master Plan Prepared 2004 Decentralization of rural water supply responsibilities to woredas (that is, districts) 2005 EU Country Dialog catalyzed inter-sector integration of WASH 2005 Universal Access Plan (UAP) developed for water supply and sanitation: 2005–12 2006 First WASH Multi-Stakeholder Forum (annual sector review) 2006 National Hygiene and Sanitation Strategy developed 2008 Revised UAP: Increased focus on low-cost technologies and self-supply 13 An AMCOW Country Status Overview 4. Institutional Framework The delivery of basic services through a highly decentralized Local government: Ensuring and sustaining system in a large, heavily populated, and predominantly capacity. Each local government in Ethiopia contains a rural country is not without its challenges. Over recent ‘Woreda WASH Team’ responsible for all aspects of water years, significant progress has been made towards and sanitation development in the district, including establishing the basic institutional arrangements in the management and oversight of scheme construction, water and sanitation sector to make this possible. This has provision of maintenance support, financial management, included the progressive devolution of implementation and M&E. This local mandate is expected to expand in responsibilities to regional and woreda level; the shift the face of a renewed focus on low-cost technologies of sector financial management responsibilities from the and self-supply. Most woreda offices, however, lack sectors to the ministry and regional bureaus of finance sufficient human resources and operational budgets to and economic development; and the ongoing effort effectively perform even their current role. Based on a to coordinate donor programs under an integrated previous World Bank review, operational budgets for cross-sector national WASH program. These reforms woreda water staff were estimated to be in the region of all remain ‘works in progress’ and therefore, to a large US$200 per staff member per year, insufficient to cover extent, the priority now should be to not engage in new even the expenses required for 10 days of local travel to reforms but to embed and continue to strengthen the field sites.13 Support from donor programs is widespread nascent institutional structures in the sector. Ethiopia but lacks coordination, particularly in relation to capacity records strong scores for all related indicators, nationally building, and is not a sustainable method for financing recognized targets and subsector policies, as well as recurrent costs. There is also no clear picture of the clearly designated institutional roles. It is ahead of its peer scale or content of the optimal ‘package’ of capacity group in this regard (Figure 4). Nonetheless, the following building for local government, particularly in relation ongoing thematic challenges have been identified. to operational budgets (for staff the objective is 11–13 water staff per woreda, although achieving this under Figure 4 fixed recurrent budgets will often simply reduce available Scorecard indicators relating to institutional operational funds further). With over 700 woredas in the framework, with average of indicator scores by country, there is no easy solution, but the development subsector and peer-group comparison12 of a coordinated, long-term strategy for capacitating and resourcing local government will be crucial if current RWS gains in the sector are to be sustained. Inter-sector coordination: Greater focus on outcomes, not process. The development of coordination structures across the water resources, health, USH UWS and education sectors has been a major institutional theme under the emerging WASH program over recent years. This effort has undoubtedly heightened awareness of the complementary benefits of coordinated interventions across sectors. However, the somewhat bureaucratic RSH nature of cross-sector coordination structures, expected Ethiopia average scores to be established across all tiers of government, has also Averages, LICs, GNI p.p. <=$500 created bottlenecks and, arguably, reduced focus on the more pressing need to establish effective institutions within Source: CSO2 scorecard. 14 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond each sector. As such, the commitment to WASH should be is increasingly flowing through the government, and maintained, but focus is required on coordinating efforts the need to support the development of sectorwide where they add value to outcomes: primarily at the local systems is widely acknowledged. However, in many cases implementation level. short-term performance of individual projects continues to take precedence and, in practice, the reliance on Donor projects: Integration of project separate project management structures and project staff management structures. Coordination between remains the norm. This risks undermining the longer-term government and donors is improving through the objective of sectorwide institutional development, and regularization of Joint Technical Reviews and annual a shift in both mindsets and incentives is needed to Multi-Stakeholder Forums. Donor finance to the sector overcome this challenge. 15 An AMCOW Country Status Overview 5. Financing and its Implementation The water and sanitation sector in Ethiopia is currently and a growth in donor resources channeled directly financed by a wide variety of different funding mechanisms. through the block grant system under the Protection of Rural water supply in particular is supported by almost Basic Services (PBS) program. Increased financial resources every conceivable combination and permutation of have, in turn, heightened the importance of establishing development assistance, from national programs financed effective sector financing mechanisms. As can be seen through government channels and using government from Figure 5, scorecard results for related indicators implementation modalities, to localized interventions are broadly in line with Ethiopia’s peer countries, but using innovative approaches and direct project financing while good progress is being made, challenges remain in mechanisms. Donor funding for urban water supply and relation to the harmonization and alignment of finance in sewerage is more standardized, being principally financed the sector: by standalone project lending and by on-lending to utilities from the Water Resource Development Fund. The Donor financing: Reducing fragmentation. While government treasury provides the major source of finance the government budget represents the major financing for the sector, the majority of which is channeled directly source, the sector remains heavily aid-dependent: financial to regions and woredas via a federal block grant.15 Over resources channeled by donors are currently of a similar recent years, government funding for the water sector scale to those allocated by the government (Table 4). As as a whole has increased significantly, growing by over discussed above, most donors continue to channel finance 400 percent in nominal terms between the 2003/04 and through project structures, and the high transaction costs 2007/08 financial years. This increase has been driven by a created by this fragmentation has put a severe strain on the number of factors, including: increased prioritization of the limited capacity of the MoWR and other sector institutions. sector in government budgets; rise in overall budgets due Recognizing these challenges, both the government and to economic growth and improved revenue generation; donors have been actively working over the past few years to change the way in which development assistance in the water supply and sanitation sector is delivered. Figure 5 Scorecard indicators relating to financing and its A notable step towards sector harmonization was made implementation, with average of indicator scores recently by the three largest official development partners— by subsector and peer-group comparison14 the World Bank, the Department for International Development (DFID) and the African Development RWS Bank—who have all harmonized under a single financing modality channeled through the Ministry of Finance and Economic Development, using a single national program implementation manual and a financial manual.16 Meanwhile, most other water sector official development USH UWS partners—though still operating in project mode—have coalesced around an emerging Sector-Wide Approach (SWAp), replacing separate individual project missions and project-based field visits with bi-annual Joint Technical Reviews and an annual WASH Multi-Stakeholder Forum. RSH Much of this progress was catalyzed by an EU Country Ethiopia average scores Dialog process in the country. Now that this has ended, it Averages, LICs, GNI p.p. <=$500 is important not to lose momentum and continue to push Source: CSO2 scorecard. towards the vision of a fully harmonized SWAp. 16 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond Table 4 Current financial commitments to the WASH sector from major donors Donor agency Predominant modality Committed funds World Bank (International Earmarked for WASH US$200 million Development Association) African Development Bank Earmarked funding for rural WASH US$62.5 million earmarked funding UNICEF Earmarked funding for WASH US$36 million earmarked funding Department for International Earmarked funding for WASH US$100 million (£70 m) earmarked Development, UK (DFID) funding European Development Bank Project funding €36 million Government of Finland Project funding €15 million Japan International Cooperation Agency Project funding US$13.8 million France Project funding US$20 million Figure 6 Box 2 Water and sanitation sector, budget and The Local Investment Grant: Moving towards expenditure by source of finance (2005/06– budget support 2006/07 average) A promising new venture in Ethiopia in terms 1800 Ethiopian Birr (million) of harmonization and alignment has been the 1600 86.3% 1400 piloting of a Local Investment Grant (LIG) under 1200 the multidonor PBS program. The LIG will be used 1000 to finance capital investment in basic services 800 600 80.6% (including water and sanitation) via a performance- 400 48.7% 38.6% based grant to woredas that have demonstrated 200 60.3% 0 sufficient capacity and accountable planning for Treasury Food Foreign Foreign Internal capital investments. Under the LIG, the flow of sources security grant loan revenue funds follows existing arrangements for the federal Budget Expenditure block grant, uses existing government procedures for disbursement and reporting, and is fully Source: Ministry of Water Resources annual financial reports, 2005/06 and synchronized with the Ethiopian fiscal year. As such, 2006/07. the financing mechanism is much closer to a fully aligned budget support program than the current sector investment program approaches. financial management systems for various reasons, including the politics of budget support in the country, lack of awareness of the quality of country financial Alignment with government systems: Increase management systems, and vested interests in the status utilization while maintaining quality. A further quo amongst both donors and government. A mechanism challenge relating to donor finance has been the is clearly needed whereby donors can utilize the existing consistently low rates of utilization across many projects. (and largely effective) government financing mechanisms, This is demonstrated in Figure 6, which presents the while also maintaining a degree of oversight in relation to estimated budgets and expenditures from a variety of resource use. National budget support initiatives such as sources, prepared under the 2008 Joint Budget Aid Review the Local Investment Grant (see Box 2) are likely to be highly for the water and sanitation sector. Despite this, donors relevant in the context of both further harmonization and have been reluctant to fully align behind government alignment. 17 An AMCOW Country Status Overview 6. Sector Monitoring and Evaluation Strengthening M&E mechanisms in the WASH sector in FY 2009/10; and establishment of a multistakeholder has continually been recognized as a priority in Ethiopia, steering committee to oversee implementation of the including in agreed priority undertakings during the last inventory roll-out and broader M&E activities in the sector. three Multi-Stakeholder Forums. These commitments have However, in the meantime, until this system is rolled out, led to a number of important preliminary steps towards the sector continues to move forward without essential the establishment of a sectorwide M&E system, including: data on the effectiveness and impact of the considerable development of a WASH M&E Framework and Manual investment finance being channeled to the sector. Scores (2008), describing in detail the structure for a sectorwide for related indicators are above the peer group average in system and the formats for the inventory instruments that all subsectors except urban water supply (Figure 7), but would be required to obtain, verify, and consolidate the there is clearly room for improvement in all cases. necessary data and information on WASH; initiation of the design of a computerized management information Sector data and performance: Reinvigorating system to support the capture, consolidation, and analysis monitoring and evaluation efforts. Although of all M&E data; development of guidelines for the roll- the above preliminary steps are all positive signs, action out of a national WASH inventory in all woredas, to begin remains slow given the urgent need for more reliable information in the sector. Delays appear to have been due to a number of factors, including the logistical challenge of compiling and consolidating data under a large Figure 7 decentralized system; capacity constraints at most levels of Scorecard indicators relating to monitoring and government in relation to data management and analysis; evaluation, with average of indicator scores by and sensitivity regarding the level of progress being subsector and peer-group comparison17 made towards achievement of the government coverage RWS targets. The current institutional changes in the sector present a good opportunity to implement the system, for a number of reasons. First, decentralization is leading to stronger capacity at local level, providing the opportunity for local level data capture. Second, there currently exists USH UWS a strong commitment to harmonization and alignment, leading to mutual support for a sectorwide M&E system, not tied to any specific financing source. Finally, inter- sector coordination on WASH (between water, health, and education) is being strengthened, providing an RSH opportunity to establish an integrated system that will Ethiopia average scores combine indicators on water supply, sanitation, and Averages, LICs, GNI p.p. <=$500 hygiene from the start. However, increasing political will from government and donors may be important before a Source: CSO2 scorecard. full and effective WASH M&E system can be put in place. 18 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond 7. Subsector: Rural Water Supply Priority actions for rural water supply • Increase sustainability of infrastructure through strengthening of cost recovery mechanisms and the development of effective spare parts supply chains. • Increase operational budgets and continue to build capacity at woreda level to support implementation of the new low-cost technology strategy. • Implement the national WASH inventory to establish baseline data on rural water supply infrastructure. Ethiopia’s population is predominantly rural, and therefore Recent increases in investment finance imply that the level of success in increasing coverage in rural areas anticipated CAPEX for rural water supply, of US$114 will largely determine whether the UAP target is achieved. million per year, is sufficient for requirements, if user Certainly, rural water coverage has increased at promising contributions of 10 percent of total costs can be leveraged rates since 1990, from 8 percent to 26 percent according (Figure 9). However, the additional estimated operational to JMP figures, and from 11 percent to 62 percent costs (required OPEX, at US$16 million per year) could according to government figures. However, monitoring push the subsector into deficit, if adequate and equitable rural water supply coverage across such a large population cost recovery mechanisms and sustainable supply chains and geographic area is a challenge, and it will be necessary for materials and spare parts are not put in place. to strengthen the estimates of coverage, especially at the regional level, before a substantive assessment can be made. Figure 8 Figure 9 Rural water supply coverage Rural water supply investment requirements 100% 80% Coverage 60% Required CAPEX Required 40% OPEX 20% 0% 1985 1990 1995 2000 2005 2010 2015 2020 0 50 100 150 US$ million/year Government estimates Government target Public CAPEX (anticipated) JMP, improved JMP, piped Household CAPEX (assumed) Sources: SDPRP Appraisal Report (2003), CSA (2009), MoWR and Source: CSO2 costing. JMP 2010 report. 19 An AMCOW Country Status Overview Figure 10 Rural water supply scorecard Enabling Developing Sustaining Policy Planning Budget Expenditure Equity Output Maintenance Expansion Use 3 2.5 1.5 2.5 2.5 2.5 2 1 2.5 Source: CSO2 scorecard. Figure 10 shows Ethiopia’s scorecard for rural water supply. Figure 11 The scorecard uses a simple color code to indicate: building Average RWS scorecard scores for enabling, blocks that are largely in place, acting as a driver on service sustaining, and developing service delivery, and delivery (score >2, green); building blocks that are a drag peer-group comparison on service delivery and require attention (score 1–2, yellow); Enabling and building blocks that are inadequate, constituting a barrier to service delivery and a priority for reform (score <1, red). Ethiopia scores well across all areas of the enabling environment, especially in policy and planning where much of the foundation has already been laid. Budgets have also increased substantially over recent years, a result both of increasing government block grants to regions and woredas, and growth in donor commitments, including a substantial grant of over US$100 million from the DFID in Developing Sustaining 2008, primarily for rural water supply, to add to already large World Bank and AfDB programs. However, the budget score is reduced by the fact that a number of financial flows Ethiopia average scores from bilateral donors and NGOs remain off budget, and due Averages, LICs, GNI p.p. <=$500 to challenges in differentiating rural and urban budgets. Source: CSO2 scorecard. The lower sustaining scores reflect the challenge of fully financing O&M expenses in low-income areas. An important response to this challenge has been the recent strategic shift Building blocks relating to developing scores are also by the government towards lower-cost technologies and consistently high, although a hidden challenge is the the principle of ‘facilitated self-supply’.18 Such approaches capacity of local government to implement the ambitious are dependent on favorable hydrology and a strong targets set at federal level. Many woreda water resource community willingness to contribute, and therefore will not development offices have only been established in the be appropriate in all parts of the country. Nevertheless, this past five years, and though staffing levels have increased shift is acknowledgment by the government that innovative substantially, experience in scheme siting, design, approaches will be needed to significantly raise coverage in procurement, and contract supervision is nascent. an environment where investment finance is constrained. The development of the sector M&E system will also be Figure 11 indicates that Ethiopia’s scores are above the peer crucial to sustaining service levels. group average throughout the service delivery pathway. 20 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond 8. Subsector: Urban Water Supply Priority actions for urban water supply • Implement cost recovery policies by strengthening the capacity and financial autonomy of town utilities. • Increase focus on water source sustainability through encouragement of demand management approaches and reduction in unaccounted-for water. Both government and JMP estimates of coverage portray Given this progress, the priority now, therefore, is to a strong upward trend in access to improved water maintain service levels and to increase cost recovery rates supply in urban areas, reaching 89 percent according to the point where investment in O&M and rehabilitation to government, and 98 percent according to the JMP. can be financed through internal revenues. The projected Though the MDG targets are not set at subsector level, annual financing situation is represented in Figure 13, Ethiopia has already succeeded in halving the proportion which shows that anticipated public investment of US$49 of urban dwellers without access in 1990, and even million per year may be insufficient to meet the estimated the government trend line suggests little acceleration is US$143 million per year required to achieve and sustain required to achieve the national target of 98.5 percent universal access, even if household contributions of US$60 by 2015. The JMP data shows a higher level of urban million per year can be leveraged (on the assumption that coverage due to differences in the rural and urban households will contribute 55 percent of capital costs. definitions used by the two data sources. The JMP trend Additional OPEX requirements (US$66 million per year) may line for water piped onto premises also shows strong further increase the burden on public finance if adequate progress, reaching 40 percent in 2008. and equitable tariffs are not put in place. Figure 12 Figure 13 Urban water supply coverage Rural water supply investment requirements 100% 80% Coverage 60% Required CAPEX Required 40% OPEX 20% 0% 1985 1990 1995 2000 2005 2010 2015 2020 0 50 100 150 200 250 US$ million/year Government estimates Government target Public CAPEX (anticipated) JMP improved JMP, piped Household CAPEX (assumed) CAPEX deficit Sources: SDPRP Appraisal Report (2003), CSA (2009), MoWR and Source: CSO2 costing. JMP 2010 report. 21 An AMCOW Country Status Overview Figure 14 Urban water supply scorecard Enabling Developing Sustaining Policy Planning Budget Expenditure Equity Output Maintenance Expansion Use 3 2.5 2 1.5 3 1.5 1.5 2 2 Source: CSO2 scorecard. The scorecard for urban water supply shows more developing new works, and sustaining service provision, consistent, moderate performance from upstream to but could further improve in all areas (Figure 16). downstream, suggesting that the subsector strikes an appropriate balance between the enabling environment, As for rural water supply, Ethiopia scores well and above its peer group in building blocks relating to enabling services (Figures 14 and 15). Among scores relating to developing services, a somewhat lower result is achieved for expenditure, due to low donor fund utilization and a Figure 15 lack of audited accounts and balance sheets for urban Average UWS scorecard scores for enabling, utilities. Output scores are also limited by the irregularity sustaining, and developing service delivery, and of water quality monitoring and failure to report on peer-group comparison additional household and public connections. Despite this, Enabling Ethiopia remains above its peer group here also. The major challenges remain in relation to sustaining services. Utilities are now in a position to at least cover O&M costs in the majority of cases, but low tariffs prevent utilities from realizing the policy objective of capital cost recovery. Nonrevenue water, estimated at around 30 percent, also remains a challenge. Although utilities retain Sustaining Developing significant autonomy, as per government policy, increasing intervention of regional bureaus in the face of capacity constraints threatens to erode this objective. Utilities also Ethiopia average scores struggle to access commercial finance in Ethiopia, and are Averages, LICs, GNI p.p. <=$500 largely reliant on government allocations and soft donor Source: CSO2 scorecard. loans to finance expansion plans. 22 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond 9. Subsector: Rural Sanitation and Hygiene Priority actions for rural sanitation and hygiene • Implement sanitation and hygiene component of the national WASH inventory to establish baseline data. • Develop a strategic national action plan for sanitation, with time-bound and budgeted activities, as has been done for the water supply sector. • Develop a national guideline for Community-Led Total Sanitation and Hygiene, to define the conceptual framework for all actors in the sector. In Ethiopia, the Health Extension Program represents a far- towards advocacy for appropriate low cost technologies, reaching initiative to bring health services to all Ethiopians and education to promote changes in sanitation and through the deployment of around 30,000 HEWs. hygiene practices. While capital requirements to meet Although the program has faced challenges in terms of the UAP target are significant (US$692 million per year) finance and the scale of the tasks expected from the HEWs, these are designated as household responsibilities. The notable progress has been made in improving sanitation anticipated public expenditure of around US$30 million and hygiene coverage at the grassroots level. According to per year is currently intended for institutional sanitation government figures (which relax the definition of improved (schools and health posts), and promotion (US$7 million facilities) coverage had reached 37 percent in 2008. JMP from government sources, primarily HEW salaries, and figures show a gradual increase in both improved and US$23 million per year from donor sources, based on shared facilities, though to a lower level of 8 percent for current financial commitments). However, as noted earlier, improved facilities alone. due to difficulties in extracting sanitation budgets from combined water and sanitation programs, these should The government has been a strong proponent of zero be recognized as estimates only. Furthermore, given the subsidy ‘self-supply’ sanitation facilities at the household number of people that will have to construct their own level, and has consequently directed resources primarily facilities each year (more than 9 million), it seems unlikely Figure 16 Figure 17 Rural sanitation coverage Rural sanitation investment requirements 100% 80% Coverage 60% Required CAPEX Required 40% OPEX 20% 0% 1985 1990 1995 2000 2005 2010 2015 2020 0 200 400 600 800 US$ million/year Government estimates Government target Public CAPEX/software (anticipated) JMP improved JMP, improved + shared Household CAPEX (assumed) Sources: SDPRP Appraisal Report (2003), CSA (2009), Ministry of Health, and JMP 2010 report. Source: CSO2 costing. 23 An AMCOW Country Status Overview Figure 18 Rural sanitation scorecard Enabling Developing Sustaining Policy Planning Budget Expenditure Equity Output Markets Up-take Use 3 2 1.5 2 2.5 2.5 1 0 1.5 Source: CSO2 scorecard. Figure 19 (Figure 19), thanks to a strong policy, as well as a relatively Average RSH scorecard scores for enabling, clear and equitable approach to promotional activities. sustaining, and developing service delivery, and Again, major challenges relate to sustaining services peer-group comparison due to limitations in supply chains, sanitation market Enabling development, and low coverage of sanitation facilities and handwashing practices. Underlying these challenges, which relate to the ‘uptake’ and ‘use’ building blocks, is the lack of a clear national action plan for achieving government targets in the sanitation and hygiene subsectors, as has been achieved for water supply via the UAP. Despite the relatively clear Sustaining Developing principles, clarification is needed on issues such as: what levels of promotional activities are required to ensure Ethiopia average scores sustainable behavior change, and what complementary Averages, LICs, GNI p.p. <=$500 investments (for example, development of supply chains) Source: CSO2 scorecard. are necessary to ensure promotion can be translated into increased coverage? A clear plan with time-bound and costed activities is needed to address these questions for both rural and urban sanitation and hygiene, which that the resources for promotion are in any way sufficient, will provide an important basis for development partners in which case the assumed Household CAPEX shown in to coordinate and align behind. Similarly, in the case of Figure 17 will be largely illusory. Community-Led Total Sanitation, an approach that is being strongly encouraged in Ethiopia, national guidelines are On the scorecard, Ethiopia performs above its peer needed to align approaches around an agreed conceptual group on both enabling and developing building blocks framework. 24 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond 10. Subsector: Urban Sanitation and Hygiene Priority actions for urban sanitation and hygiene • Formulate a clear Urban Sanitation Strategy, including delineation of responsibilities between different government agencies, an investment program and financing strategy. This is needed to set out urban sanitation hardware requirements, technology choices and how they will be financed. The state of urban sanitation in Ethiopia differs substantially million per year, will be met by households. Anticipated depending on coverage estimates used. Based on the JMP public spending of around US$19 million per year will go definition of improved facilities, urban coverage is only to sewerage infrastructure, institutional sanitation, and 29 percent (with a higher number using shared facilities), promotion work. However, as noted for the rural subsector while government figures, which include a broader there are serious questions over whether, in the absence range of sanitation facilities in the coverage estimate of direct spending on infrastructure, the government is (such as traditional pit latrines), estimate coverage as 88 commensurately resourcing promotion to encourage percent. The government’s definition of sanitation, and its households to install or upgrade their facilities. consequent estimate of coverage, would appear to put its target of 98.5 percent coverage in reach. Irrespective of coverage figures used, urban sanitation would appear to be a priority subsector for reform based Again, a policy of zero subsidy for sanitation hardware at on the low scorecard results (Figure 22). The enabling the household level in theory removes the responsibility environment should be the starting point, particularly for CAPEX financing from government—as Figure 21 planning and budgeting where Ethiopia scores very low shows, the assumption is that the entire amount, US$102 on the scorecard, due to a lack of consistent coordination, Figure 20 Figure 21 Urban sanitation coverage Urban sanitation investment requirements 100% 80% Coverage 60% Required CAPEX Required 40% OPEX 20% 0% 1985 1990 1995 2000 2005 2010 2015 2020 0 50 100 150 US$ million/year Government estimates Government target JMP, improved JMP, improved + shared Public CAPEX/software (anticipated) Household CAPEX (assumed) Sources: SDPRP Appraisal Report (2003), CSA (2009), Ministry of Health, Source: CSO2 costing. and JMP 2010 report. 25 An AMCOW Country Status Overview Figure 22 Urban sanitation and hygiene scorecard Enabling Developing Sustaining Policy Planning Budget Expenditure Equity Output Markets Up-take Use 3 0.5 0.5 2 0 2 1 0 0.5 Source: CSO2 scorecard. Figure 23 primarily in the capital of Addis Ababa. In addition to low Average USH scorecard scores for enabling, levels of finance, challenges for developing sanitation in sustaining, and developing service delivery, and urban areas include the difficulty in securing land tenure, a peer-group comparison prerequisite for making household improvements such as new sanitation facilities worthwhile, especially in informal Enabling settlements. Furthermore, at an institutional level, mandates for improving urban sanitation are unclear, which has been a primary factor for the slow development of the enabling environment in the sector. Currently small-scale initiatives are being implemented by multiple institutions (Ministry of Works and Urban Development, Ministry of Sustaining Developing Health, Ministry of Water Resources) but without any agreed upon national or city-level urban strategy in the country. The Ministry of Works and Urban Development Ethiopia average scores has drafted an urban sanitation strategy but no further Averages, LICs, GNI p.p. <=$500 action has been taken, while the Ministry of Health has only recently deployed urban health extension agents. A Sources: CSO2 scorecard. concerted effort to delineate responsibilities so that these activities can be coordinated and scaled up is an urgent annual review processes, and inadequate visibility in starting point for the urban sanitation sector in Ethiopia. budgeting. In line with these low scores, investment in In addition, an investment program and financing strategy urban sanitation also remains low, directed primarily needs to be developed to define more realistic technology at promotion work via urban-based HEWs and donor choices for urban sanitation, to cost the implementation programs. On the infrastructure side, little investment of those technologies, as well as to clarify who will pay for is being made outside of large scale donor programs, them and how. 26 Water Supply and Sanitation in Ethiopia: Turning Finance into Services for 2015 and Beyond Notes and References 1 Global Economic Monitor, the World Bank. 2010 average. 9 Due to rounding, component figures may not sum to totals. 2 The first round of CSOs was carried out in 2006 covering 16 countries and is summarized in the report, ‘Getting Africa 10 The CSO2 scorecard methodology and conceptual on-track to Meet the MDGs on Water and Sanitation’. framework are discussed in detail in the synthesis report. 3 Data from Ministry of Water Resources (MoWR). 2009. 11 A new PRSP process is currently under way for 2010–15. Sustainable Development and Poverty Reduction Program Although still incomplete, this process is expected to result Appraisal Report, 2003, and Central Statistical Agency in maintained commitment to the sector, albeit with the (2009). targets for universal access pushed back from 2012 to 2015. 4 The MDG target is to halve, by 2015, the proportion of people without improved access to water supply and 12 Indicators relating to the institutional framework sanitation, relative to 1990 levels. The quoted figures for section are as follows: All subsectors: targets in national the MDG targets are based on the government’s estimates development plans/PRSP; subsector policy agreed and of coverage in 1990. The 1990 baselines determined by approved (gazetted as part of national policy or as the UNICEF/WHO Joint Monitoring Program are slightly standalone policy); RWS/UWS: institutional roles defined; different, and produces slightly different MDG targets of 59 RSH/USH: institutional lead appointed. percent for water supply and 52 percent for sanitation. 13 Based on analysis conducted for the 2008 World Bank 5 The coverage and financial data for water supply used Public Financial Review; data taken from Ministry of in this chapter are sourced from plans developed by the Finance and Economic Development pre-actual annual Ministry of Water Resources in the context of the PASDEP financial reports. review process during 2009/10, termed PASDEP-2. Since then, this has evolved into a five-year ‘Growth and 14 Indicators relating to the section on financing and Transformation’ plan, which is currently under preparation its implementation are as follows: All subsectors: by the Government of Ethiopia. programmatic Sector-Wide Approach; all subsectors: investment program based on MDG needs assessment; all 6 Including an assessment of centralized sewerage network subsectors: sufficient finance to meet MDG (subsidy policy installation versus other decentralized options. for sanitation); all subsectors: percent of official donor commitments utilized; all subsectors: percent of domestic 7 MoWR. 2007. Needs assessment to achieve universal commitments utilized. access to improved hygiene and sanitation by 2012. 15 The block grant is a constitutionally mandated 8 The CSO2 costing model does not include the cost of entitlement for each regional government and is hygiene promotion and other software activities, relative to determined by a legislated formula that is largely based the targets, due to the difficulty of estimating such costs on on equity considerations (population, income, level of a per capita basis. However, the Government of Ethiopia development). and EU Water Initiative estimated a total public funding requirement for software of around US$130 million over 16 The World Bank and DFID have gone further and merged 2007–12. Government of Ethiopia and EU Water Initiative. their financing under a single ‘Multi-Donor Trust Fund’, 2006. Needs Assessment to Achieve Universal Access to and it is hoped that this fund will provide a mechanism for Improved Hygiene and Sanitation by 2012. other donors to directly harmonize their financing. 27 An AMCOW Country Status Overview 17 Indicators relating to the M&E section are as follows: consolidated reporting of output; RSH/USH: monitoring All subsectors: annual review setting new undertakings; of quantity and quality of uptake relative to promotion subsector spend identifiable in budget (UWS: inc. and subsidy efforts; all subsectors: questions and recurrent subsidies); budget comprehensively covers choice options in household surveys consistent with domestic/donor finance; RWS, RSH, and USH: MDG definitions. domestic/donor expenditure reported; UWS: audited accounts and balance sheets from utilities; RWS, RSH, 18 For example, households may be provided with a rope and USH: periodic analysis of equity criteria by CSOs pump free of charge by the government on the condition and government; UWS: pro-poor plans developed that they take responsibility for constructing their own and implemented by utilities; RWS/UWS: nationally hand-dug well. 28 For enquiries, contact: Water and Sanitation Program–Africa Region The World Bank, Upper Hill Road P.O. Box 30577, 00100, Nairobi, Kenya Tel: +(254) 20 322 6300 E-mail: wspaf@worldbank.org Web site: www.wsp.org