2018 2018 2 PREFACE Over the past decade, Ethiopia has been one of the fastest growing economies in the world and has registered impressive results in poverty reduction. Ethiopia is also among the few country that successfully achieved several of the Millennium Development Goals. H. E. Dr. Abraham Tekeste Over the next decade, we are committed to scaling up our efforts in all Minister of Finance areas in order to meet the Sustainable Development Goals and achieve and Economic Cooperation middle-income country status. The World Bank Group has been one of our strongest development partners since the beginning of our partnership. We are confident that this partnership will continue as we strive to reach our development objectives. 3 FOREWORD Ethiopia was among the founding members of the World Bank(IBRD) in 1945. In fact it was also the first country in Africa to obtain financing. Over seventy years later, the World Bank continues to be Ethiopia’s largest development partner, providing grants and low to zero-interest Carolyn Turk loans for development projects and programs that are boosting Country Director for Ethiopia, economic growth and addressing systemic poverty challenges. Sudan and South Sudan World Bank investment in key sectors has helped Ethiopia to register impressive results in vital human development indicators. Today, World Bank compared to 20 years ago, more children are living past their 5th birthdays, four times as many students are enrolled in primary schools and more people have access to clean water. Our current Country Partnership Framework builds on the results achieved so far and sets ambitious targets for many key areas. Our investments in strategic sectors will enable Ethiopia to double energy access, improve learning outcomes(especially for girls), drastically reduce the incidence of stunting, cut travel time by half and protect 14 million people from food insecurity. To help address spatial disparities and ensure inclusive growth, we will continue supporting development activities throughout Ethiopia, while putting special emphasis on the poorest and most vulnerable people and regions. We hope this book will provide readers insight on how the World Bank Group is helping to reduce poverty and improve the living standards of ordinary Ethiopians. Many of the people featured in this book have given testimony of not only how their livelihoods improved as a result of the projects we finance, but also how they are able to invest in their future as well as their children’s education. For instance, Zinabua is well on her way to build her dream hotel. Thousands of children will attend the school that Kedija helped to build. Messeret’ s daughter will have a brighter future. Their stories nicely capture the type of sustainable development we strive to achieve. What we are investing in Ethiopia today will keep benefiting millions of people long after the projects are closed. We look forward to continuing to work together with all of our partners to realize the success of Ethiopia’s journey to become a lower middle- income country by 2025. We welcome your feedback on how we can improve our services and deliver lasting results for the people of Ethiopia. PROMOTING STRUCTURAL AND ECONOMIC TRANSFORMATION THROUGH INCREASED PRODUCTIVITY INCREASING ACCESS TO RELIABLE ENERGY 7 8 Ethiopia is endowed with vast clean energy resources. It also has huge potential for solar, wind, and geothermal power. Despite major strides in the sector over the past decade, Ethiopia still has the second largest energy access deficit in Sub-Saharan Africa. Only around 30 percent of the population has access to electricity. 10 En Centrafrique, 80 % de la population vit dans Page de droite l’arrière-pays où l’agriculture reste l’activité principale. madame bernadette Nabeyin, présidente de l’action Ici, à boukoko, localité située à une dizaine de kilomètres des femmes chrétiennes pour le développement (afCd) de mbaïki, chef-lieu de la préfecture de la Lobaye, de mbaïki, fait partie des bénéficiaires du Projet d’urgence dans le sud-ouest du pays, les groupements de producteurs en réponse à la crise alimentaire et la relance de semences cultivent du maïs. Le pays recense au moins de l’agriculture (PuRCaRa). « Je suis très reconnaissante 15 millions d’hectares de terres arables et dispose d’une d’avoir reçu des semences et du matériel agricole car cela bonne pluviométrie. aujourd’hui, la relance de l’agriculture m’a permis aujourd’hui d’avoir un champ. J’ai appris commerciale, et notamment du secteur du coton, comment planter et comment faire le suivi pour m’assurer s’avère indispensable. que les plantes poussent normalement », ajoute-t-elle. In the Central African Republic, 80% of the population lives Right page in the countryside, where the main activity is agriculture. madame bernadette Nabeyin, president of the mbaïki In boukoko, a village in the southwest about six miles from Christian Women’s action for development (afCd by its Nearly 100 percent of Ethiopia’s power mbaïki, in the Lobaye region, farmers’ cooperatives grow french acronym), is one of the beneficiaries of the Emergency generation comes from clean sources corn. The country has at least 37 million acres of arable food Crisis Response and agricultural Revival Project land, with good rainfall levels. today, relaunching (PuRCaRa). “I’m very thankful for the seeds and equipment mainly hydropower. commercial agriculture, especially the cotton sector, I received… that’s why I have a farm plot today. I learned is a top priority. how to plant and how to follow up to be sure the plants are growing as they should,” she says. 11 The World Bank has been providing comprehensive support across the energy value chain, including sector reform, access, interconnection, generation, transmission, distribution and infrastructure. Its latest intervention - the Ethiopia Electrification Pages suivantes Program Next pages (ELEAP), supports the National Electrification Le « champ école » de mbaïki a été créé dans le cadre “field (NEP) Program the school” comprehensive - ain plan mbaïki was created to as reach part of du Projet d’urgence en réponse à la crise alimentaire the bank’s Emergency World access universal by Crisis food to electricity 2025.Response et la relance de l’agriculture (PuRCaRa). Grâce à cette and agricultural Revival Project (PuRCaRa by its french initiative, une dizaine d’associations apprennent à faire acronym). ELEAP will Thanks finance this initiative, to new electricity10 associations for areover connections de la culture maraîchère. un facilitateur assure now learning market gardening techniques. a facilitator one million households and nearly double the rate of l’encadrement des ONGs en étroite collaboration avec ensures supervision by NGOs in close collaboration les techniciens vulgarisateurs. quarante facilitateurs electrification with in Ethiopia. field assistants. forty facilitators have been trained, ont été ainsi formés. La plupart des groupements and most of the groups have increased their yields ont amélioré leurs rendements grâce à ces formations. as a result of the instruction. 12 13 ENHANCING BUSINESS AND INVESTMENT CLIMATE 16 Ethiopia aims to create at least 2 million jobs from large scale manufacturing by 2021, using Industrial Parks (IPs) development as a key strategy to attract global manufacturing firms. However, there is a lack of industrial infrastructure, skilled labor and the domestic private sector is unable to provide inputs to the IPs. The Competitiveness and Job Creation project is supporting Ethiopia to develop and properly manage Industrial Parks. 19 The Bole Lemi and Kilinto industrial parks are among those supported by the project. The project provides fully serviced facilities to manufacturing firms, which will help them set-up operations faster. The IPs will provide employment opportunities for 30,000 people. So far, over 1300 people have been trained and recruited by apparel and textile factories in Bole Lemi. Several domestic manufacturers of packaging materials have also increased their sales by supplying to firms operating in Bole Lemi IP. 20 Producing quality products will enable Ethiopia to compete in international markets. 21 The National Quality Infrastructure (NQI) Development This is particularly important for Ethiopian Project is supporting the provision of quality assurance manufacturers who are currently facing a number of services in the areas of standards, metrology, challenges in meeting quality requirements needed to accreditation and conformity assessment. access developed markets, such as the United States, European Union, and Asia. 22 Limited access to finance is perceived as the main business constraint by Micro, Small and Medium Enterprise (MSMEs). The Small and Medium Enterprises Finance project established a credit facility to bridge this funding gap. The project provides access to finance for working capital and lease to participating financial institutions so that they can lend to eligible MSMEs. Zinabua Hailu dreams of It’s not an impossible dream. Over the last eight years, she has built her business from a one-room, building a big hotel that meets one-person food vendor operation into a 10-room international standards. hotel and restaurant with 18 staff in the bustling Gofa neighborhood of Addis Ababa. Zinabua used a special line of credit backed by the World Bank for the expansion. 24 Meheret Hailemariam was among the more than 5,000 Ethiopian women who received entrepreneurship training under the World Bank-financed Women’s Entrepreneurship Development Project (WEDP). She is a self-employed electrician who credits the training she received for her success in a male dominated field. 25 Women in Ethiopia face bigger challenges than men in “I used the loan from WEDP to grow my starting or expanding a business. Women are less likely to own assets, such as land or a house, which can be small shop into a bigger one. I am even used as collateral for a loan. able to put money aside. In the future, I intend to open a big store for my family.’’ Ifty Mukhtar, beneficiary. 26 Trade could be a major contributor to Ethiopia’s development. However, Ethiopia’s ability to be internationally competitive is undermined by poor trade logistics. Through the Trade Logistics project, the World Bank is helping to enhance the performance of the Ethio- Djibouti corridor - the main gateway for the country’s imports and exports. The project is helping to improve the operational capacity, efficiency, and range of logistics services at the Modjo dry port. 27 Afriflora is one of the companies supported by the International Finance Corporation (IFC). Ten years ago, the village of Ziway was little more than a fuel stop on the long road to Kenya. Today, Ziway boasts a modern hospital, a school, and a top-notch football stadium all built and made possible by Afriflora, Ethiopia’s largest rose producer and exporter. Afriflora employs over 11,000 people in Ziway, 80 percent of whom are women. IFC’s investment will help the company to expand production and create 5000 more jobs. BUILDING INVESTOR CONFIDENCE 30 Investing in foreign countries can be a risky business. The Multi-Lateral Investment Guarantee Agency (MIGA) is providing services that build investor confidence in Ethiopia. 32 Africa Juice (the first Fair Trade certified juice producer in Africa) is one of the companies in Ethiopia that received investment guarantees from MIGA. The company produces mangoes, papayas, and other tropical fruits to process into juice in a state-of-the art factory. The juice is then exported to markets in Europe and the Middle East. The company employs over 2,400 people. It is also partnering with local farmers to produce passion fruit. 33 Local farmers are earning significantly higher incomes by selling the passionfruit to Aftica Juice. IMPROVING AGRICULTURAL PRODUCTIVITY AND COMMERCIALIZATION 36 The agricultural sector remains a dominant sector in the Ethiopian economy accounting for 45 percent of total output and employing nearly 80 percent of the population. 38 The World Bank has been supporting the agriculture sector through various projects and helping millions of smallholder farmers to increase their production and better manage the land. 39 “By simply applying lessons I learned from the project, I was able to double my crop production,” says Haji a farmer from Oromia who is one of the beneficiaries of the Agricultural Growth Project. 40 Fikadu learned how to produce earthworms for composting. “Since I started to vermicompost I use half the chemical fertilizers I used to but I harvest much more. Now I can send my children to school.” 41 42 IMPROVING CONNECTIVITY AND ENHANCING REGIONAL GROWTH CENTERS 43 44 Ethiopia’s development has been held back by a large infrastructure gap. Ethiopia has one of the lowest road densities in Africa. 46 Working in partnership with other donors the World Bank has helped to increase both the size and quality of Ethiopia’s road network from under 20,000 km in 1991 to over 100,000 km in 2016. It also helped to establish a dedicated road fund for maintenance work and to build capacity at many levels. More than 20,000 vehicles per day travel the “I use this road at least once a week. On 850-kilometer route from Addis Ababa to the port of Djibouti, making it the most congested and accident- every trip I see several horrific accidents,” prone road in the country. said Mohammed Abdi, a truck driver. “People lose their lives, and millions in property. We also lose valuable time.” 48 The Modjo-Hawassa Expressway when completed will reduce traffic congestion, travel time and decrease the potential for accidents along the country’s main trade route. The expressway, which is partly funded by the World Bank will form part of the regional Trans-East- African Highway, connecting Ethiopia to Kenya and southern Africa. The number of vehicles operating in Addis Ababa is relatively low compared to other cities of similar size. Yet traffic congestion and accidents have been worsening. The Transport Systems Improvement Project is helping to improve mobility in the city and road safety countrywide. The project among other things is building pedestrian sidewalks and amenities, street lighting and expanding the current traffic signal and control systems. It is also modernizing the operation of the Anbessa bus and vehicle and driver licensing systems. 50 Ethiopia is one of the fastest urbanizing countries in Sub- Saharan Africa. The number of people living in urban centers is expected to almost triple in the next two decades and reach 42.3 million in 2037. 52 The World Bank supported Urban Local Government Development Project (ULGDP) is helping Ethiopia to better manage the urbanization process and take advantage of the opportunities it brings. The project is enabling cities to better plan, deliver, and sustainably provide urban services and infrastructure (i.e. roads, toilets, water points, bridges, parks) to citizens. ULGDP has also helped to create jobs for hundreds of These young men from the city of thousands of youth, women and people living with disabilities. Adigrat, organized themselves in a group to supply cobblestones needed for road construction. 54 55 BUILDING RESILIENCE AND INCLUSIVENESS IMPROVING SUSTAINABILITY AND EFFECTIVENESS OF SAFETY NETS 57 59 Ethiopia is no stranger to drought. Since 2003, it has faced five serious droughts. This is forcing Ethiopia to assess how it can better plan and respond to droughts. “When my husband died I had no source of income. The safety net program has been a life saver. I now sell my products and earn enough money to send my children to school, put food on the table and buy anything that we need.” At the frontline of the Government’s drought response Emahoy Belaynesh a mother of three is one of the is the World Bank supported Productive Safety Net beneficiaries of the program. With part of the cash Program (PSNP). PSNP provides regular cash or food she received, she bought seeds to plant in her garden. transfers to 8 million people in drought-affected areas. Among other things, she grows corn, yams, carrots, The World Bank’s latest intervention is helping Ethiopia coffee, oranges, and passion fruit. to shift from humanitarian response to a predictable safety net system. 61 PSNP has helped millions of families to be food secure “I have been building things my community while creating community assets and infrastructure. Through the public works component over 40,000 desperately needs, including the school my kilometers of rural roads, more than 500 health posts children attend. This makes me very proud.” and 4,500 class rooms were built. Additionally, over 1.2 Kedija Ajae, a mother of six. million hectares of degraded land has been turned into productive land. 62 63 64 Rapid growth in Ethiopia has brought down rural and urban poverty levels. Lack of urban safety nets however meant that the most vulnerable and least educated segment of the urban population remained trapped at very low-income levels. 66 The Urban Productive Safety Nets Project (UPSNP) is This young woman from Adama came to the city when helping to reduce poverty and vulnerability among she was young and has been doing low-paying jobs for the urban poor by enabling poor households to take a long time. As part of the cash for work program, she advantage of the economic opportunities that urban is doing urban greenery. She will also get a sizable cash development offers, as well as gain access to equitable grant. UPSNP is a great stepping stone for her to pursue social protection services. her passion of owning a restaurant. 67 UPSNP is the first urban Messeret is one of the beneficiaries of UPSNP in Hawassa. She participates in the paid public works safety net program in Sub- activities in the morning. This leaves her time to help Saharan Africa and the first her daughter with her school work. phase of Ethiopia’s long-term Urban Safety Net Strategy. ENHANCING MANAGEMENT OF NATURAL RESOURCES AND CLIMATE RISK 71 The impact of natural resource degradation on Ethiopia’s economy and People’s livelihoods is significant. Almost 50 percent of the Ethiopian highlands are degraded. Declining productivity is costing Ethiopia 2 to 3 percent of its annual agricultural GDP. 72 The various informal names given by communities to the Sustainable Land Management Program (SLMP) are testimony to its success. Those in Hotte (Oromia) call it Fayyissa (healer). In Tind Wat (Amhara), SLMP is Yemeret Abbat (father of the land). SLMP is a program supported by the World Bank and other development partners that uses an innovative approach to restoring degraded land combining security of tenure for farmers with better management of natural resources. 73 Enderta woreda was once known for its dry and dusty “You have to see it to believe it,” said landscape: It struggled with irregular rainfall, drought and decades of poor land management. Abraha Hagos, a father of ten who lives in Enderta. He now harvests twice as much as he used to just three years ago. 74 Nitsuh is one of the female farmers who was issued with legal, individual landholding certificates under SLMP. “This means no one can take my land from me,” she says. 75 IMPROVING EQUITY AND USE OF QUALITY HEALTH SERVICES 77 78 Ethiopia has made impressive progress in improving its health status. It is one of a few countries that met its child mortality reduction targets ahead of the MDGs. However, high maternal and neonatal mortality rates persist. 80 The presence of more health facilities and health professionals means that more women have access to services. This has helped to reduce maternal mortality rates. The Heath Sustainable Development Goal Performance Fund (SDGPF) has played a key role in bridging the funding gap in maternal and child health services. The program among other things has increased access to skilled birth attendants and ensured the provision and availability of adequate pharmaceuticals, ambulances as well as delivery and operating rooms. 81 Tadelech gave birth last year at her local health center where she was able to get proper care. She continues to go to the health clinic for follow up visits and to have her baby vaccinated. 82 83 IMPROVING EARLY CHILDHOOD NUTRITION AND EARLY LEARNING OUTCOMES 86 Millions of children are not reaching their full potential due to inadequate nutrition, a lack of early stimulation and learning, and exposure to stress. These factors adversely affect their physical, cognitive and socio-emotional capacity to learn, earn, and compete later in life. 88 89 38 percent of children under-five are stunted in growth. Through various programs, the World Bank is helping to ensure that the nutritional and health needs of children are met. Among other things, the Bank is supporting household food security, investing in diversified and nutrition-rich crops as well as livestock products. The provision of clean water and reduction of open defecation will also decrease disease risks and improve child nutrition outcomes. INCREASING ACCESS TO IMPROVED WATER AND SANITATION 92 Ethiopia has made considerable progress in terms of extending access to water supply and sanitation services over the past two decades. However, millions of Ethiopians are yet to be reached. 93 “We used to walk 2 hours each way to fetch water and we often reached our homes too late for us to go to school,” said these girls. The World Bank through various operations has been In Ethiopia in addition to all household related chores, supporting Ethiopia’s efforts to better manage water fetching water is traditionally the responsibility of girls resources, improve sanitation services and achieve and women. 100% national potable water supply coverage by 2020. Since this water supply facility was built Melka Kero through the World Bank One WASH project, it no longer takes these girls hours to fetch water and they are now able to attend school and even have time to play. 95 The rehabilitation and modernization of the Legedadi water treatment plant, which is the main water source for millions of Ethiopians, was funded by the Urban Water Supply and Sanitation Project. The project also built the chlorination plant and modernized and simplified the purification process. This has helped to increase water supply in Addis Ababa by 143,000 m3 per day. “We used to fetch water by walking long distances. The vessel we carried on our back used to break during our long and difficult journey,” says Emebet from Amhara region. 97 The Rural WASH project has given villagers much needed assistance to help construct local toilets such as this one. In addition to reducing open defecation this has helped to reduce fecal contamination and bacterial disease in the immediate household and within families living in rural areas. 98 “We had health and hygiene problems. Since this facility has opened in our area, we have clean water, we are healthier and cleaner.” Fozia Umer, Melka Kero Kebele, project beneficiary. INCREASING ACCESS TO SERVICES AND JOB OPPORTUNITIES FOR REFUGEES AND HOST COMMUNITIES 102 Ethiopia hosts over 900,000 refugees displaced by conflicts, political events, and civil wars in neighboring countries. An estimated 500,000 Ethiopians have also been displaced internally and are living in situations of protracted displacement. To help alleviate some of the burden and promote inclusive growth, the World Bank is helping to increase basic social services and economic opportunities for refugees and host communities. 105 “We will be getting a nice school soon and Dr. DIP will be supporting its construction” says one of the students at this school. The existence of this school in Tahtay Adiabo could go completely unnoticed. Four temporary classrooms have been created using hay, brushwood, and stones and logs as benches. The students and their teachers are undeterred by their circumstances. When asked about the challenges faced, one of the students spoke pointing to heaps of sand and stone that had been contributed by the community for the planned school construction. The school will be built with support from the regional Development Response to Displacement Impacts Project (DRDIP). IMPROVING BASIC EDUCATION LEARNING OUTCOMES 107 108 Ethiopia has made tremendous gains in increasing access to primary education. However, internal inefficiency, inequity, and poor education quality persist as challenges in the sector. Through the General Education Quality Improvement Project (GEQIP), the World Bank has been helping Ethiopia to improve the learning environment of schools by providing critical inputs. Over 300,000 teachers were provided with training under the project and are better qualified to provide quality education. The project is also addressing many of the bottlenecks that are holding girls and students with special needs from getting equal opportunities to learn and prosper. As a result of the project, 24,000 children with special needs will be able to attend school, while the gross enrollment rate of girls in primary schools is set to increase by 21%. 111 “There weren’t enough textbooks for Now we have our own books and they everyone at my school, three of my are much better than the old ones,” friends and I used to have to share one says Hanna, one of the millions of textbooks and copy as many pages students whose educational life was as possible everyday just to do our improved by GEQIP. homework. 112 113 SUPPORTING PASTORALISTS 115 116 Pastoralism is a way of life for 12 million Ethiopians. Because they are located in remote and inaccessible areas of the country, pastoralist communities have historically been economically and socially marginalized and underserved in terms of basic social services and economic infrastructure. 118 These girls in Afar Region attend a school built by PCDP. The World Bank funded Pastoral Community Development Project (PCDP) empowers pastorialist to determine and implement their social and economic priorities. The program empowers pastoralists to determine and implement their social and economic priorities. Communities have built infrastructure including human and animal health posts, schools, waterpoints, irrigation and flood management systems with support from the project. PCDP has also provided pastoralists with better access to savings and credit activities. “Our area is very dry and there is little rain. However,I was able produce these coffee beans using the small scale irrigation system.” PCDP beneficiary. QUALITY BASIC SERVICES FOR ALL 121 122 Ethiopia has succeeded at improving the delivery of basic services to its rapidly growing population. 124 An increase in better- qualified health professionals has given communities better access to essential health services. World Bank support through the Promoting Basic Services and the Enhancing Shared Prosperity through Equitable Services programs has played a key role in improving equitable access to quality basic services nationwide. 125 ESPES has facilitated the deployment of more primary school teachers, it has also increased students’ access to teaching staff. SUPPORTING INSTITUTIONAL ACCOUNTABILITY AND CONFRONTING CORRUPTION STRENGTHENING CITIZEN ENGAGEMENT AND ACCOUNTABILITY 130 Demand for government accountability in Ethiopia is rising and additional investment in accountability and transparency mechanisms is needed. To reduce corruption and engage citizens in decision- making, citizens’ voices must be reflected. 132 “I have a voice and I use it to make a difference,” says this beneficiary proudly displaying his citizens’ score card. 133 “I know how much and when the teachers get paid, so when they don’t come to teach my daughter I demand to know why.” The World Bank has been supporting accountability and transparency mechanisms at local levels and has been helping to build capacity and improve governance in service delivery. The Ethiopia Social Accountability Program (ESAP), The Enhancing Shared Prosperity through Equitable enables ordinary citizens - who are the users of basic Services project is improving public finance public services - to voice their needs and demands. management with timely reporting and auditing. It The program creates opportunities to hold policy is also promoting transparency by posting budgets makers and service providers accountable for their publicly. This means that citizens are aware of budget allocated for specific services. performance. IMPROVING STATISTICAL CAPACITY TO ENHANCE EVIDENCE BASED POLICY MAKING AND MONITORING 135 136 In order for Ethiopia to track and analyze progress on poverty reduction, it needs to address data challenges. During the survey season, enumerators from the Central Statistical Agency (CSA) travel long distances on foot, carrying paper questionnaires that must be filled out by hand and returned undamaged. Since processing the surveys is also time consuming, policy makers who needed the data for evidence-based decision making never got the information on time. 139 This young man is using digital tablets powered by solar panels to connect to GPS for data collection. The Ethiopia Statistics for Results Project, is building “ Using tablets for data collection cuts the capacity of the CSA and other government agencies to produce, disseminate, and increase access down on the time and money needed to timely and reliable data. The project is modernizing to complete all phases of the survey CSA’s data collection processes and operations. preparation” said Habekristos, head of the Agriculture Directorate. INCREASING CAPACITY AND IMPROVING GOVERNANCE IN SERVICE DELIVERY 141 142 For Ethiopia, using a conventional procurement system is a bottleneck to achieving its development objectives. The public financial management project is helping the Government to modernize its public procurement system. 145 When operational, the system will result in huge savings in time and cost compared to the conventional way of doing procurement. This will improve efficiency, transparency and value for money. Acknowledgments The production of this book was led by Gelila Woodeneh, Senior Communications Officer. Many people have contributed to the production of this book. But in particular, the team would like to highlight the contribution of the country managment unit, project teams, beneficiaries and photographers. Photos: World Bank Collection (Arne Hoel, Gelila Woodeneh, Sylwia Pecio, Chris Terry, Andrea Borgarello, Stephan Gladieu, Tewodros Emiru). Layout design and technical support: Impala Communication.