Ethiopia: ADF Approves $118 Million Grant for Protection of Basic Services

20 December 2006
African Development Bank (Abidjan)

The Board of Directors of African Development Fund (ADF) the concessional window of the African Development Bank (AfDB) Group on Wednesday in Tunis approved a grant of 78.49 million Units of Account (UA*), equivalent to US$ 118.34 million, to finance the Protection of Basic Services Program (PBS) in the country.

The key objective of the PBS is to protect and expand the provision of basic services by sub-national entities by increasing the aggregate volume of federal block grant transfers to regions and districts ("Woredas") using the existing intergovernmental fiscal framework. To ensure the effective use of the block grant transfers to regions and Woredas, the PBS also aims to strengthen local accountability mechanisms and to enhance transparency around the public budget process. The development goal of the PBS is to achieve improved human development outcomes and promote broad based economic growth. In addition, the programme seeks to contribute toward improvement in governance.

The program has four components:

* Supporting provision of basic services comprising education, health, water and sanitation, and agricultural support services; * Establishment of a Health MDG Performance Pooled Fund, for the funding of high impact primary health service interventions such as the Malaria Booster program;

* Reinforcement of donor monitoring arrangements to enhance financial transparency and accountability with the primary goal of improving institutional governance and social responsibility with a view to empowering the citizenry to hold services providers accountable.

* Strengthening of institutional governance and social accountability with a view to empowering the citizenry to hold service providers accountable.

The primary target group of the PBS is Ethiopia's poor citizens at the grassroots level such as in the woredas, municipalities and Kebeles. The program is intended to contribute towards the attainment of the MDGs in Ethiopia by 2015. Poor citizens are expected to benefit from improved and expanded primary and secondary education, health care and portable water and better sanitation. Rural farmers will also benefit through the assistance that will go to the agriculture sector through the strengthening of extension services. Civil society is expected to acquire knowledge that will increase its ability to participate in the development agenda and to make their voice heard on issues pertaining to budget process, decentralization and the delivery of basic services.

The program is estimated to cost UA 1.9 billion. It will be funded by the ADF as well as funds from other donors and from the Ethiopian government (see Box).

The AfDB Group began operations in Ethiopia in 1975. The Bank's cumulative commitments in the country currently stand at US$ 2.3 billions in 103 operations.

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