The UK Department for International Development (DfID) has reaffirmed its confidence in the Ethiopian government's ability to manage aid funding by placing Ethiopia at the top of its worldwide contribution list.
Ethiopia is poised to receive an excess of two billion dollars over the next four years, making the country the biggest recipient of development aid from the UK, the DfID announced at a press conference at the British Embassy in Addis Abeba on Tuesday, March 1, 2011.
The bilateral and multilateral aid of the UK was recently reviewed by the government in the Global Aid Review to refocus the programmes towards a more realistic allocation of funds for a greater impact, according to Howard Taylor (PhD), country representative of the international development department for the UK.
"Ethiopia was chosen based on the country's evident track record of delivering," Taylor said at the press conference. "'We are spending the tax payers' money and they are watching, making us committed to confirm that every penny is spent for its intended purpose."
The DFID plans to stop core funding to four UN organisations: the International Labour Organization (ILO), UN International Strategy for Disaster Reduction (ISDR), UN Habitat, and the UN Industrial Development Organisation (IDO), it claimed in a document setting out UK Aid's future plans.
The funding of organisations that recorded poor performance ratings will be limited through special measures, including UNESCO and the International Organisation for Migration (IOM), the document read.
Bilateral agreements with 17 countries, such as Angola, Burundi, China, and Russia, will come to an end once they graduate from the aid relationship, Taylor announced at the press conference. The move would allow the UK to concentrate its resources on only 27 countries to reduce global maternal mortality by three quarters and to make other substantial differences in fighting poverty in those countries, he said.
The assistance to Ethiopia will go towards providing health care and malaria prevention, education, family planning, as well as safe drinking water and food security, while also focusing more on issues related to women and children, Taylor said at the press conference. UK authorities plan to provide basic healthcare to 7.5 million people and to guarantee access to safe drinking water for 800,000 people by 2012, he said.
Another planned project will reward educational institutions with good pass rates in the national exams, especially for girls, is being drafted by the DfID and is scheduled to have a 277 million dollar budget; an independent entity will be established to ensure that the 10th grade national exam keeps its standards high, the department announced.
Since the Ethiopian government already has programmes focusing on the youth and women, it might be of great value for Ethiopia to receive the aid, according to Asegedech W. Luel, an economist at Admas University College.
However, mechanisms through which to monitor how the money is spent have been discussed in talk for which Alemayehu Gojea, state minister for Finance and Economic Development (MoFED), serve as coordinator between the two governments.
"There were different negotiations on what the aid will be used for and mechanisms to control the aid with different government officials, including a recent discussion between Prime Minister Meles Zenawi and Andrew Mitchell, secretary of state for international development," Pete Lewis, head of regional communications for DfID, told Fortune.
These talks were held also because the Ethiopian government wants to know that aid is being spent for its intended purpose, as it is striving towards meeting the Millennium Development Goals (MDGs), according to Taylor.
Ethiopia received 18.68 billion Br in aid and 22.54 billion Br in loans from bilateral and multilateral sources, in 2009/10; this was a 67pc increase from the previous budget year, according to a report by MoFED.
However, an economic analyst who spoke to Fortune on condition of anonymity was not as positive about the large amount.
"Aid is not a gift and it is given for political or economic interests, aside from a willingness to help," he said. "Seeing a decreased amount of aid is a clear sign of economic development in a country."
However, in comparison with other African countries, Ethiopia uses the aid it is given effectively and it might help the developmental projects the country has, the expert conceded.
The disbursement for the implementation of specific projects for the same year was 33.5 billion Br, of which 22.5 billion Br was aid; this showed a 41pc increase from the previous year, according to the report by MoFED.
Yet, too much aid will only serve to increase the country's dependency on it, but it needs resources for its five-year GTP, the expert told Fortune.