Development Effectiveness Review on Ethiopia

The Development Effectiveness Review on Ethiopia 2015 examines Ethiopia’s development challenges in recent years and assesses the African Development Bank’s contribution to addressing them. It also looks at how effectively we manage our operations and our organisation in Ethiopia.

Ethiopia is one of the fastest-growing economies in the world, averaging 10% growth over the past decade. Even with high population growth, the country’s per capita income has tripled over the last eight years. This strong economic performance has provided the Ethiopian Government with a platform for pursuing its ambitious national development agenda. As a result, over the past eight years 2.5 million people have been lifted out of poverty, and the proportion of Ethiopians living below the poverty line has fallen below 30%. 

Over the past 40 years, the AfDB has been a leading provider of development finance in support of Ethiopia’s national development agenda, with 118 projects at a total value of $4 billion. From 2005 to 2013, our investments have made a substantial contribution to expand Ethiopia’s road infrastructure and improve access to transport to over 7.5 million people. On electrification, our contribution helped Ethiopia to provide nearly 40,000 people with electricity connections. Our support for national water and sanitation programmes has made a major contribution to health outcomes, as we have achieved our target of providing improved water and sanitation to 250,000 people. We contributed budget support to Ethiopia’s ambitious decentralised Promoting Basic Services programme (PBS), helping to meet the salary costs of teachers, health workers and other frontline service providers. We have also supported successful private sector projects in Ethiopia – including the national airlines – and provided financial services to the many Ethiopians who run small and micro business through our microfinance programme which has benefited nearly 2 million people.

This report also tracks the performance of the Bank’s Ethiopia portfolio against the goals and targets set out in our Results Measurement Framework, with some illustrations of our operations at work. The portfolio of the Bank in Ethiopia is in robust shape with fewer, but larger operations as the average size of our public sector operations is three times the average across Africa. With a focused and selective portfolio, the AfDB is able to address implementation challenges and achieve higher levels of impact. 

AfDB remains committed to supporting Ethiopia’s national development goals. We will continue to help Ethiopia to close its infrastructure gap, pursue regional integration, and to support improvements in agriculture, basic services and the business environment. As the premier African development organisation, the AfDB stands ready to help Ethiopia promote transformation and achieve its vision of middle-income country status by 2025.

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Level 1: Development in Ethiopia

Ethiopia is without question one of Africa’s high achievers, with a rapidly growing economy and falling poverty rates. It also faces some serious national development challenges. As one of Africa’s largest and most populous countries, it has vast infrastructure needs. Continued dependence on rain-fed agriculture, in the face of increasingly variable rainfall, creates persistent problems of food security. The Government has a clear national development vision and a strongly pro-poor orientation to its national budgets and investments, but it still has some way to go to create an environment conducive to private-sector-led development. This chapter takes stock of Ethiopia’s recent achievements in national development and its efforts to address the outstanding challenges. The chapter is organised according to the five areas the AfDB identifies in its Strategy 2013–2022 as essential to inclusive growth: social, economic, spatial, and political inclusion, and building a competitive economy.

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Level 2: How AfDB contributes to Ethiopia’s development

This chapter looks at how well the African Development Bank has helped Ethiopia achieve its national development goals. The bulk of our investment has been focused on infrastructure development, to provide people across the country with roads, energy, water and sanitation. In addition, the Bank has contributed to the agriculture sector, which provides livelihoods and food security for the majority of Ethiopians. The Bank has also provided assistance with health and education services and private sector development. In this chapter, we discuss the performance of current and recent Bank operations, reviewing them against the indicators set out in our Results Measurement Framework for Ethiopia. We also describe some of our projects, to demonstrate some of the more innovative aspects of our work.

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Level 3 How well AfDB manages its operations in Ethiopia

This chapter examines how well the AfDB is managing its operations in Ethiopia. We assess our progress in strengthening results through the selection, design and supervision of our operations. We review how well we work with the Ethiopian Government and other development partners to increase the effectiveness of our assistance. We also examine how well we draw lessons from past experience, to enable continuous improvement. We describe how we are embedding inclusiveness into each stage of the project cycle. We also discuss how we ensure that gender equality and climate change resilience are addressed, to achieve more sustainable development impact. To measure our progress, we use the 16 indicators from Level 3 of our results framework for Ethiopia, together with “stretch targets” for 2016. These data help us check our performance in strengthening results, delivering effective and timely operations and mainstreaming cross-cutting priorities.

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Level 4: How efficient AfDB is as an organisation in Ethiopia

The final level of our Results Management Framework measures how well we manage our own organisation, using 14 indicators to assess our progress. We look at how successful we have been in decentralising our operations and providing a high-level presence to engage on continent-wide agendas.

We also review our record on recruiting and filling staff vacancies and on addressing the gender balance in staffing. We take stock of the efficiency of our business processes and practices, with a particular focus on financial management and audit.

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