World Bank launches new assistance strategy for Ethiopia

April 30th, 2008 | by addis portal |

Press Release No:2008/289/AFRWASHINGTON, April 29, 2008—The World Bank today launched a new Country Assistance Strategy (CAS) for Ethiopia. The strategy covers the period July 2008 – June 2011 and aims to help Ethiopia sustain its strong performance in economic growth and basic service delivery in recent years.

Ethiopia has entered the early stages of a ‘dual take-off’ in the provision of basic services and in economic growth. Over the past decade, its efforts to improve basic services have shown impressive results. Primary school enrollments have tripled, child mortality has almost been cut in half, and the number of people with access to clean water has more than doubled. Over the last four years, GDP growth has averaged over 11 percent per year. The percentage of Ethiopians living in poverty, which stood at 46 percent in 1996 and 44 percent in 2001, fell to 39 percent in 2006.

‘Ethiopia’s achievements on growth and basic service delivery are remarkable,’ said Ken Ohashi, World Bank Country Director for Ethiopia. ‘At the same time, sustaining this good performance will require addressing several looming challenges. The Bank will provide its full support to Ethiopia in this regard.’

These challenges in the near term, as outlined in the CAS, include managing macroeconomic risks (inflation and trade imbalances); stimulating private investment further; opening more economic opportunities for the disadvantaged groups, especially women, youth, and food-insecure households; and improving quality of services in line with the strong progress on access. In the longer term, Ethiopia must also address its fundamental vulnerability to drought, through environmental protection as well as further industrialization; continue to improve governance; and develop stronger cooperative ties with neighboring countries.

The Bank’s strategy will help address these challenges by supporting the implementation of key elements of the Governments’ Plan for Accelerated and Sustained Development to End Poverty (PASDEP). Accordingly, the Bank’s support, both financial and analytical, is focused around four main pillars:

– Fostering economic growth. The Bank will support the country’s macro-fiscal stability as well as key sectors such as agriculture and infrastructure (roads, energy, water). It includes a focus on regional cooperation on large-scale infrastructure. A particular emphasis will be placed on strengthening supply responsiveness of the economy, leading to sustained growth and expansion in private investment.

– Improved quality of and access to basic services. The second pillar aims to help Ethiopia complete its move toward universal access to essential services in health, education, agriculture and water, and step up its efforts to enhance the quality of such services. It also includes support for enhanced citizens’ voice to improve quality of basic services through greater involvement of communities, citizens, and civil society in the decision making and monitoring processes.

– Reducing Vulnerability. The Bank will continue to support Ethiopia in addressing food insecurity. As part of a comprehensive approach to improving the lives of the poorest, it will seek to help address environmental degradation and population pressures and support greater economic engagement of women and youth.

– Fostering Improved Governance. The Bank will continue its strong emphasis on improving government effectiveness and quality of public administration, enhancing the accountability and responsiveness of government, and increasing empowerment and demand for accountability.

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is expanding its reengagement in Ethiopia to support the development of the private sector. IFC has recently approved an investment in the cement industry, which is the Corporation’s first investment project in Ethiopia in over 18 years.

Extensive consultations were carried out in the formulation of the strategy in order to obtain a wide range of perspectives from diverse stakeholders on the priorities, challenges and options for the Bank’s activities and role in the country. Stakeholder groups from the government, the private sector, civil society organizations, academia, opposition members of parliament, community groups, and other donors took part in the consultations.

The Bank’s program for Fiscal Year 2008 is based on an initial International Development Association (IDA) allocation of about $635 million at current exchange rates. The size of the lending program for the rest of the CAS period will depend on IDA’s 15th replenishment, which envisages significant funding increases for IDA borrowers. The annual allocation of IDA resources, however, will reflect a country’s policy and institutional performance relative to other countries, portfolio quality, per capita income levels, and population.

For more information on the World Bank in sub-Saharan Africa visit: www.worldbank.org/afr

For more information on the World Bank in Ethiopia visit: www.worldbank.org/ethiopia

Contacts

In Washington:
Aby Toure
(202) 473 8302
akonate@worldbank.org

In Addis Ababa :
Gelila Woodeneh
(251-1) 662 77 00
gwoodeneh@worldbank.org

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