ADDIS ABABA UNIVERSITY

COLLEGE OF EDUCATION AND BEHAVIORAL STUDIES

CENTRE OF COMPARATIVE EDUCATION AND POLICY STUDIES

TRENDS OF INTERNATIONAL DEVELOPMENT ASSISTANCE TO ETHIOPIA,

ITS CONTRIBUTION IN ACHIEVING MGDs AND EFFECTIVENESS

BY
EFFA GURMU

May, 2015

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Acronyms
APL Adaptable Program Loans
AUC African Union Commission
DAG Development Assistance Group
EDHS Ethiopian Demographic and Health Survey
ESDP Education Sector Development Program
EU European Union
GDP Gross Development Product
GER Gross Enrollment Rate
HAPCO HIV/AIDS Prevention and Control Office
MDGs Millennium Development Goals
MOE Ministry of Education
MOFED Ministry of Finance and Economic Development
NER Net Enrollment Rate
ODA Official Development Assistance
ODI Overseas Development Institute
OECD Organization for Economic Cooperation Development
PBA Program Based Approach
PFM Public Financial Management
READ Russia Education Aid for Development
UK United Kingdom
UN United Nations
UNESCO United Nations Educational, Scientific and Cultural Organization
US United States
WB World Bank
WHO World Health Organization

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 Contents

Acronyms…………………………………………………………………………………………………………………………………………..i
Contents……………………………………………………………………………………………………………………………………………ii
Tables……………………………………………………………………………………………………………………………………………….iii
Figures………………………………………………………………………………………………………………………………………………iii
1. Introduction ........................................................................................................................................ 1
1.1. Overview ...................................................................................................................................... 1

1.2. Objectives .................................................................................................................................... 2

2. Trends of International Development Aid to Ethiopia ....................................................................... 2

3. The Contribution of Aid Assistance in Achieving MDGs ..................................................................... 8
Goal 1: Eradicate Extreme Poverty and Hunger ................................................................................. 8

Goal 2: Achieve Universal Primary Education .................................................................................... 9

Goal 4: Reduce Child Mortality ......................................................................................................... 10

Goal 5: Improve Maternal Health ..................................................................................................... 11

Goal 6: Combat HIV/AIDS, Malaria and Other Diseases ................................................................... 11

Goal 7: Ensure Environmental Sustainability.................................................................................... 12

Goal 8: Develop a Global Partnership for Development .................................................................. 13

4. Aid Effectiveness across Paris Declaration in Ethiopia ..................................................................... 13

5. Summary ........................................................................................................................................... 17
REFERENCE............................................................................................................................................ 18

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 Tables

Table 1: Top 10 ODA recipients – US$ million ..................................................................................... 4

Table 2: Countrywide public health expenditure and ODA (share in percent) .................................... 12
Table 4: Progress on Effectiveness of Aid with Respect to the Paris Declaration ............................... 16

Figures
Figure 1 Top 10 Recipients of U.S Bilateral ODA (USD million) ......................................................... 3
Figure 2 Top 10 Recipients of UK ODA (USD million) ........................................................................ 3
Figure 3: Total Multilateral and Development Assistance Committee (DAC) Development ................ 5
Figure 4 Trends of Chinese Loans to Ethiopia in USD .......................................................................... 6
Figure 5: Trends of Indian Loans to Ethiopia from 2006-2012 in USD ................................................. 7

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1. Introduction
1.1. Overview
Ethiopia is the second most populous nation in the African continent and plays important role in
African politics because of its strategic location in the region as the seat of the African Union,
Economic Commission for Africa and other specialized organs of the UN. On the other hand, it
remains among the poorest countries in the world, with a per capita average annual income of
$170 (Flores, 2013). Thus, Ethiopia has a long history of receiving international aid assistance
dating back to the early 1950s, which has played an important role in its development effort.
Following the change in political regime in 1991 and the adoption of the structural adjustment
program in 1992/93, the country has enjoyed a significant amount of aid. In addition, a large and
growing inflow of concessionary loans and grants has occurred since 2001, after the issuance of
the first poverty reduction strategy paper known as Sustainable Development Poverty Reduction
Program (Alemayehu & Kirbrom, 2011). Furthermore, the Millennium Development Goals
(MDGs) have become a focus for national development plans and for international commitments
to increase aid assistance in the country.
International aid assistance is playing a major role for current economic development and
poverty reduction in Ethiopia. Particularly, its importance as a source of financing for the
development of capacity building (human capital, administrative capacity, institutional building,
and policy reforms) and promoting basic services is very crucial. According to (Khan & et al,
2014), among Ethiopia’s recent impressive development results, its rapid improvement in basic
service delivery indicators is outstanding. Similarly, the Overseas Development Institute reports
that Ethiopia has moved faster toward the Millennium Development Goals (MDGs) than all but
two other developing countries (ODI, 2010). Despite, the large amount and growing level of aid
in Ethiopia, still there are a lot of challenges to eradicate poverty and enhance economic
development in order to improve the life of society.
Therefore, the focus of this paper is to review the trends of international development assistance
to Ethiopia, its contributions in achieving the MDGs and aid effectiveness with respect to the
Paris Declaration indicators.

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1.2. Objectives
The general objective this paper is to assessment about three sets of issues, concerning about
international aid assistance in Ethiopia. The specific objectives are:
 To review what the current trends of Ethiopia look like in receiving international aid
assistance.
 To discuss the contribution of international aid assistance in achieving the MDGs in
Ethiopia.
 To assess aid effectiveness in the country with respect to the Paris Declaration indicators.

2. Trends of International Development Aid to Ethiopia

The traditional distributions of aid flows from donors have changed significantly over the last
decades. In the 1960s the largest share of aid was directed to the countries of South and Central
Asia. However, since the 1970s, Sub-Saharan Africa became a leader in attracting aid. For
instance, they accounted for 39 percent of global ODA from the DAC members.
Ethiopia has been one of the major recipients of international aid in recent times. This is due to
its locus of international attention in the Horn of Africa, continued the problems of widespread
hunger and poverty, geopolitical location and its rates of economic growth. Topping the
worldwide list of countries receiving aid from different donors, Ethiopia is in the frontline. For
instance, in recent years, Ethiopia has been receiving $3.5 billion on average from international
donors, which represents between 50 to 60 percent of its national budget. The entities that have
provided the most substantial development aid for the last decade are the US, the World Bank
Group, and the UK (Flores, 2013).
As shown in figure 1 below, among the list of top ten recipients of U.S. bilateral aid Ethiopia
was in the fourth position next to Iraq, Afghanistan and Sudan. These six countries, except for
Colombia, the Palestine National Authority, Kenya and South Africa, are also among the largest
recipients of the U.S. military aid which reflects a high degree of securitization of the U.S
(World Bank, 2013).

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Figure 1 Top 10 Recipients of U.S Bilateral ODA (USD million)

Source: International Development Cooperation: Set of Lectures (World Bank, 2013)

United Kingdom was predestined to become one of the pioneers of international development
assistance which occupy the largest place and the most influential European donor. Its
distribution by country demonstrates the strength of historical ties with the former colonies and
the concentration on the poorest countries of the South Asia and Africa, notably, conflict affected
ones. In this case, Ethiopia is in the second position among the top ten recipients of the UK
bilateral aid next to India on average in 2008 to 2010 (see figure 2 below).

Figure 2 Top 10 Recipients of UK ODA (USD million)

Source: International Development Cooperation: Set of Lectures (World Bank, 2013)

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On the other hand, though, the primary focus of donors on African countries does not necessarily
mean that they are top recipients of ODA, however, Ethiopia is the only African country which
enjoyed the aid in the third rank, among 6 of the 10 top recipients of other regions – the Middle
East; South, Central and South-East Asia countries according to the average data of 3 years as
shown in Table 1 below. However, as OECD (2008) indicated, of the 38.4 percent of total ODA
(USD 37.2 billion) that went to conflict and fragile states, over half was directed to just five
countries: Iraq (23 percent), Afghanistan (9.9 percent), and Ethiopia, Pakistan and Sudan sharing
17% of the total aid only in 2007.

Table 1: Top 10 ODA recipients – US$ million

Source: OECD (2012).

In the past four years, according to OECD records, aid appropriations in the Economic
Development sector have grown significantly, increasing from a low of $32.8 million in 2008 to
$106.0 million in 2012. Consequently, the total Multilateral and Development Assistance
Committee (DAC) Development Aid to Ethiopia is indicted in the figure 3 below.

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Figure 3: Total Multilateral and Development Assistance Committee (DAC) Development
Aid to Ethiopia

Source: OECD.Org
The World Bank Group, through the International Development Association, is the largest
multilateral donor to the Ethiopian government. In 2011, the WBG provided a total of $630
million in assistance to Ethiopia, with over half of the annual assistance allocated as part of the
Promoting Basic Services (PBS) initiatives. Moreover, Ethiopia has also receiving international
aid assistance from other countries such as Israel, Russia, China, India etc.
Israel’s aid program is run primarily by the Centre for International Cooperation of the Ministry
of Foreign Affairs. It provides almost all of its aid bilaterally (90 percent) and focuses primarily
on providing technical assistance and organizing training programs in developing countries.
Between 2001 and 2010 its aid increased from US$93 million to US$141million. In this regard,
among the top 10 recipients of the Israeli aid countries (Jordan, Ukraine, Eritrea, Sudan,
Lebanon, Belarus, Uzbekistan, Georgia, and China), Ethiopia was one of them (World Bank,
2013).
On the other hand, established in 2008, the Russia Education Aid for Development (READ)
program is a collaboration of the Government of the Russian Federation and the World Bank that
focuses on enhancing Russia’s role as new donor in the sphere of education. In this regard the

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Russian government approved a READ Trust- Fund with the amount US$32 million that
executed by the World Bank six-years from the period of 2008 to 2014. Among the four African
counties selected to participate in this program, Ethiopia was one of them and the remaining
were Angola, Mozambique and Zambia.
China and India, as re-emerging donors, are not new to Ethiopia. Both countries have been
providing aid to Ethiopia almost as long as the West. However, until recently the aid flow from
both countries was very minimal. Both countries give monetary and non-monetary forms of
assistance; they are motivated by a combination of strategic, political interests and mutual
benefits with commercial intent. In this regard, they are similar to western donors in that their aid
practices are tied with some conditions such as equipment, companies and labor as well as
services. Yet neither country has conditions on governance, democracy and human rights.
In the recent past, China has shown remarkable improvement in direct aid as loan to Ethiopia.
Accordingly, since 2006 China has committed 3.3 billion USD as a loan to Ethiopia for
development projects (Brautigan & Deborah, 2012). These loans were allocated for the
implementation of more than 30 projects such as Ethio-China Friendship Road, vocational
training institute equipped with advanced teaching facilities, Gottera Fly Over Road , Meskel
Square to Bole Ring Road, hospital construction, sugar production, railway, telecommunication
sector and other projects including Agricultural Demonstration Center (MOFED, 2012). China
also built the new African Union Conference Centre with 200 million dollar in Addis Ababa and
handed it over to African Union Commission (AUC) in 2012. For details, see figure 4 below.
Figure 4 Trends of Chinese Loans to Ethiopia in USD

Source: Comparative Analysis of Chinese and Indian to Ethiopia, Gedion (2014)

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In general, the role of China as an emerging source of finance for Ethiopia is noticeable in the
last decade in which much of its aid is disbursed in the form of technical assistance projects, with
a particular focus on infrastructure (Grimm & et al, 2009).
Similarly, Ethiopia and India have a long-standing relation due to their ancient civilizations and
their proximity across Indian Ocean. Currently, Ethiopia is among the top first countries
recipients of Indian Lines of credit in the world. In Ethiopia, 78.1% of Indian development
assistance commitment and disbursement has been extended to sugar industry such as Tendaho,
Wonji/Shoa and Finchaa. In this regard, it seems that India is giving assistance where it has
comparative advantage. The secondly development support is related to Ethio-Djibouti Railway
line in which it offering US$300 million. The remaining 3.89% was disbursed to energy
generation and supply (see figure 5 below).
Figure 5: Trends of Indian Loans to Ethiopia from 2006-2012 in USD

Source: Comparative Analysis of Chinese and Indian to Ethiopia, Gedion (2014)

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3. The Contribution of Aid Assistance in Achieving MDGs
Ethiopia was one the country among 189 heads of state adopted the UN Millennium Declaration
and endorsed a framework for development. The declaration established eight Millennium
Development Goals (MDG), set targets for 2015, and identified a number of indicators for
monitoring progress (UN, 2000). This declaration was set a milestone in the history and
evolution of theoretical and practical approaches to international development assistance which
assures that development was impossible without ensuring peace and security, gender equality,
poverty eradication, access to health and education services, and so on.
Thus, provision of development assistance is a constant and continuous process that cannot be
substituted for by isolated financial investments and activities as a human development became
one of the top priorities of international development assistance in the 21st century. The MDGs
plan was for countries and development partners to work together to increase access to the
resources needed to reduce poverty and hunger, and tackle ill-health, gender inequality, lack of
education, lack of access to clean water and environmental degradation (UN, 2008; WHO,
2009).
As discussed above, under the trend and nature of international development assistance to
Ethiopia, a country has enjoyed a lot of foreign aids. With this regard, in the next section the
paper tries to review the achievements by Ethiopia as related to the eight MDGs using various
international aid assistances.
Goal 1: Eradicate Extreme Poverty and Hunger
The target of this goal was, by 2015 halve the proportion of people whose income is less than
one dollar a day. With regard to this MDG, the UN report (2010) indicated that, Ethiopia is
heading towards halving poverty by 2015, although a lot of the sub-Saharan region countries lag
significantly behind the plan in most of the goals set.
Ethiopian progress in delivering basic services over the past 10 years has been coupled with
impressive economic growth: Gross development product (GDP) grew by 11 percent per annum
on average between 2004/05 and 2009/10 though its growth has slowed more recently. Thus,
according to official data, the share of the population living in absolute poverty is declining and
it fells from 38.7 percent in 2004/05 to 29.6 percent in 2011(Khan & et al, 2014). Similarly,
according to the Ethiopian MDGs report in 2012, the data have shown that the proportion of

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people living below the poverty line in Ethiopia has declined from 45.5 % in 1995/96 to 27.8 in
2011/2012 (MoFED, 2012).
This result was, due to Promoting Basic Serves (PBS) program which is the primary means by
which the World Bank and other development partners assist Ethiopia to achieve the MDGs.
While helping to achieve many of the eight MDGs, the PBS Program focuses principally on
three: achieving universal primary school education, reducing child mortality, and improving
maternal health which have a direct impact on the eradication of extreme poverty and hunger.
Therefore, through the PBS Program, the Government of Ethiopia and development partners co-
finance block grants to support the provision of basic services at the local level. On top of that,
the donors’ contribution to Federal Government of Ethiopia was about US$ 3223.3 million since
2005/06 to 2012/13 (Khan & et al, 2014).
Goal 2: Achieve Universal Primary Education
The target of this goal was ensuring that, by 2015, children everywhere, boys and girls alike, will
be able to complete a full course of primary schooling. Concerning this, there has been some
progress in enrolment of students at the appropriate age. Gross Enrolment Rate (GER) in primary
schools (Grades1-8) which was only 32% in 19090s rose to 95.4&% and the Net Enrolment Rate
(NER) for primary education (grade 1-8) reached 85.4% in 2011/12 (MOE,2012). Moreover, the
percentage of the grade one population two or more years above the appropriate age declined by
over 20 percentage points and the percentage of children who had never been to school
decreased by remarkable rates from 67% in 2000 to 28% in 2011 (UNESCO, 2015). According
to the World Bank report (2014) about 98 percent primary and secondary schools and ABE
centers using school grants to improve their school environment.
Goal 3: Promote Gender Equality and Empower Women
Eliminate gender disparity in primary and secondary education preferably by 2005 and to all
levels of education no later than 2015 was the target of this goal. The progress of Ethiopia’s
performance on this goal has been significant given its low baseline. According to MOE (2012),
the gender disparity (ratio of girls to boys) in primary education has improved from 0.85 in
2006/07 to 0.93 in 2011/12 and that of secondary school stand at 0.88 and 0.76 in first cycle
(grade 9 – 10) and second cycle (grade 11 – 12), respectively in 2011/12. In this case, early
marriages, among children from rural and poor households, tend to inhibit educational

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progression among girls from primary to secondary level, in particular. The median age at first
marriage increased marginally from 16.1 years in 2005 to 16.5 years in 2010/11 (MoFED, 2012).
As Global Monitoring Report in 2015, Ethiopia is among some countries which is reducing
gender and income disparities in school access, net enrolment ratios and primary attainment rates
(UNESCO, 2015).
In general, in Ethiopia, as the problem of education quality is very critical, while educational
expansion is in progress, the government designed the General Education Quality Improvement
Package (GEQIP) to alleviate the problem of education quality together with the development
partners. As a result, education sector become one of the sector among the few that enjoyed large
shares of ODA. A large and growing inflow of aid followed the development of the Education
Sector Development Plans (ESDP) by the ministry of education. Particularly, during the first
phase of GEQIP implementation, the development partners support the project with the
Adaptable Program Loans (APL) about US$50 million during 2009-2013, US$283 million,
including US$168.0 million under the Education for All - Fast Track Initiative Catalytic Fund
and US$115 in contributions from five development partners through a Multi-donor Trust Fund
(World Bank, 2014).
Goal 4: Reduce Child Mortality
The MDG target on child health is to reduce child mortality by two-third between 1990 and
2015. In Ethiopia, under-five child mortality has substantially declined to 88 per 1,000 live births
in 2010/11 from 123 per 1000 live births in 2004/05, registering a 28.4% reduction over the
period of five years (EDHS, 2011). According to the result of EDHS conducted in 2010, the
under-five mortality rates are higher among children from poor families than those from more
prosperous families. The health extension programs and the expansion of health facilities have
played a significant part in reducing child mortality rates in Ethiopia over the last decade
(MOFED, 2014). Overall, Ethiopia has experienced a remarkable improvement in service
delivery outcomes.
Ethiopia achieved the Child Mortality target in 2014, ahead of schedule, and appears to be on
track to reach the other MDGs by 2015 as of United Nations progress reports. Similarly,
according to the United Nations report in 2014, there have been notable reductions in the under-
five mortality rate particularly since 2000 in some low-income countries such as Ethiopia (UN,
2014). Although, immunizing children against common and preventable illnesses is important to

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their overall health and to their readiness to learn and subsequent schooling, progress in ensuring
that all children are fully immunized has not been fast enough in most countries that started from
a low base in 2000, such as Ethiopia (UNESCO, 2015)
Goal 5: Improve Maternal Health
In Ethiopia, the progress on reducing maternal mortality has stalled since 2005 when the country
managed to reduce maternal mortality rate to 676 per 100,000 births in 2010/11 from 871 in
2000/01. In addition, although the percentage of women (aged between 15 and 49) using modern
contraception increased from 6.3% in 2000 to 18.7% in 2011 and contraceptive use prevalence
rate for the same age group increased from 6% in 2000 to 29% 2010/2011 (EDHS, 2011),
performance on these indicators is still very low compared to many African countries.
Furthermore, the percentage of deliveries attended by skilled birth attendants was only 20.4% in
2011/12, much lower than skilled delivery of 74% and 44% respectively for urban and rural
communities in the Southern and Eastern African region. Thus, the MDG target of 267 per
100,000 births by 2015 is not clearly on the right track of goal five (MOFED, 2012). In sub-
Saharan Africa including Ethiopia, a woman’s risk of dying from treatable or preventable
complications of pregnancy and childbirth over the course of her lifetime is 1 in 22, compared to
1 in 7,300 in the developed regions (UN 2008;WHO, 2009).
Goal 6: Combat HIV/AIDS, Malaria and Other Diseases
Ethiopia has achieved significant progress towards the targets of goal 6. That means, it is
estimated that HIV/AIDS prevalence amongst the adult population has dropped to 1.5% in
2010/11 (EDHS, 2011) which is more than the MDG target of 2.5%. In the same way,
HIV/AIDS prevalence of new infections amongst pregnant women (aged between 15 to 24
years) has declined from 5.6% in 2005, to 3.5% in 2007, and 2.6% in 2011 (HAPCO, 2012).
Prevention from mother to child transmission coverage is also increased from 9.3% in 2010 to
25.5% in 2011. Close to 274,708 people, living with HIV/AIDS, were on anti-retroviral
treatment at the end of June 2012.
The percentage of children under the age of five that sleep under insecticide treated nets
increased from 3% in 2005 to 33% in 2010/11 (EHNRI, 2012). The distribution of insecticide
treated bed-nets has been a major factor in reducing malaria deaths, where have fallen by over
50% since 2007/08 (Banteyarga, etal, 2011). The national tuberculosis detection and treatment

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success rates is reached 63% and 88% in 2011/12 respectively, placing the country on track
towards achieving the national target of 90% detection and cure rate by 2015 (MOFED, 2012)..
As we have seen earlier, Ethiopia has been one of the major recipients of international aid in
recent times. The health sector is among the few that enjoyed large shares. For example, Table 2
below gives some insight about the share of public health expenditure from total public
expenditure and the share of aid in the health sector. According the data obtained from ministry
of health in 2012, the share of aid from total public health expenditure from 2003/04 to 2006/07
years is more than 64 percent. In general for the success of MDGs refers to the health, the
provision of financial support from various development partners was vital.

Table 2: Countrywide public health expenditure and ODA (share in percent)

Source: Getnet, 2009

Goal 7: Ensure Environmental Sustainability

With regard to goal 7, through the medium term strategy (GTP) and Climate Resilient Green
Economy (CRGE) strategy, Ethiopia has made important steps towards mainstreaming principles
of sustainable development in its development process. Concerning access to safe drinking
water, the percentage of households with access to improved and safe drinking water has more
than doubled over the last five years and reached 58.25% (MoFED, 2012).
Similarly, rural and urban sanitation coverage improved from 60% and 80% in 2010/11 to 64%
and 86% in 2011/12, respectively. Likewise, the national sanitation coverage has increased from
63% in 2010/11 to 67% in 2011/12. Though the country is on track to meet the MDG targets,
existing evidence suggests that the country should do a lot more to improve access to safe
drinking water and sanitation services in the remaining years. The review of country progress
against set targets suggests that the country has the lowest carbon emission rates per capita in the

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world at less than 2t in 2011. Overall, total emissions of around 150 Mt CO2, represent less than
0.3% of global emissions target (MOFED, 2012).
Goal 8: Develop a Global Partnership for Development
The objective of MDG eight has been to rally and foster global partnerships to address global
development challenges and mobilize resources to finance interventions aimed at achieving the
Millennium Development Goals (MDGs). Significant progress has been made in creating,
maintaining and expanding global partnerships for development. The flow of Official
Development Assistance (ODA) to Ethiopia reached US$ 2,617.9 million and accounted for
approximately 11% of the country’s national budget in 2011/12. While this amount of ODA
appears to be large in absolute terms and in comparison to many countries in sub-Saharan Africa,
Ethiopia’s per-capita ODA is only US$31.5 compared to US$52.16 average for Sub-Saharan
Africa. Furthermore, Ethiopia’s export earnings have increased quite significantly over the last
decade, accounting for 17% and 14% of GDP in 2010/11 and 2011/12, respectively compared to
6.8% of GDP in 2005/06 (MoFED, 212).

4. Aid Effectiveness across Paris Declaration in Ethiopia

Aid often criticized for not have contributed to economic growth and poverty reduction. But, this
is of great concern given the role that aid is expected to play in achieving the Millennium
Development Goals (McGillivray, 2004). Thus, effectiveness of aid is currently a hot agenda at
the international level and politicians from both developed and developing nations are
advocating for reforms in the delivery and management of aid. This has led to international
agreement in the form of the Paris Declaration, which aims at improving predictability and
fragmentation of aid through better harmonization and alignment, promoting ownership,
managing results, and increasing mutual accountability (Getnet, 2009). The only way that donors
can ensure that their funding is well used is, if governments and donors work together to monitor
implementation of a country’s development strategy and national budget, making decisions
based on the whole picture (Herfkens & Bains, 2015).
In Ethiopia, there are many donors operating in the country with varied modalities of aid delivery
ranging from sector support to project type of aid. Despite the global attention paid to the issue
of aid effectiveness, Ethiopia took part in 2006, 2008 and 2011 Paris Declaration surveys
monitoring donors’ efforts to coordinate. The survey reports assess progress made with regard to

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the Declaration in terms of country-owned policy processes and systems, alignment of aid with
country systems, aid harmonization, and accountability (OECD, 2008b, OECD, 2011).
As Ethiopia is a chief recipient of aid, so the issues of aid effectiveness are very serious. Hence,
in 2011 the survey on the progress of the Paris Declaration indicators was taken place to compare
with that of conducted in 2006 and 2008. In this regard, though, the reflection of aid flows in the
country’s national budget suggests that aid flows are aligned with national priorities and there is
a significant improvement in aligning technical assistance with its National Capacity Building
Strategy, the aid coordination effort seems to be moving slowly.
According to the OECD (2011) survey on Ethiopia in 2011, the detail findings of the five
mutually reinforcing principles of the Paris Declaration are presented as follows.
Ownership: Aid is most effective when it supports a country-owned approach to development. It
is less effective when aid policies and approaches are driven by donors. In the context of the
Paris Declaration, ownership concerns a country’s ability to carry out two, inter-linked activities:
exercise effective leadership over its development policies and strategies; and coordinate the
efforts of various development actors working in the country. Under this principle, the first
indicator is to assess the operational value of a country’s development strategy. In this case,
although, the Paris Declaration targets 75% of partner countries achieving a score of A or B by
2010, Ethiopia achieved B as it did in 2007.
Similarly, indicators 2 through 8 of the Paris Declaration assess several different dimensions of
alignment. In this regard, Ethiopia has made some improvements in comparison with its
performance in 2007. Of the seven indicators with applicable targets, three were met and four
remained unmet. The indicators for which targets were achieved reflect that there has been a
wider use of country systems among donors, a strengthening of coordinated technical
cooperation, and an increase in untied aid. On the other hand, indicators on the number of
parallel PIUs, the proportion of predictable aid, the reliability of PFM systems and the alignment
of aid to national priorities have failed to meet targets, with the latter two exhibiting setbacks
since 2007 (see table 4 below).
Harmonization: Harmonization of aid delivery procedures and the adoption of common
arrangements help reduce duplication of effort and lower the transaction costs associated with
aid management. The Paris Declaration focuses on two dimensions of aid as a proxy for
assessing overall harmonization using two indicators: the use of common arrangements within

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program-based approaches (PBAs) and the extent to which donors and partner countries conduct
joint missions and coordinate analytic work.
Regarding the use of common arrangements indicator, the proportion of aid disbursed through
program-based approaches (PBAs) decreased from 66% in 2007 to 61% in 2010. In the same
way, the Declaration recognizes that donors have a responsibility to ensure that, to the greatest
extent possible, the missions and analytical work they commission are undertaken jointly.
however, even though, the 2010 target is indicated that 40% of donor missions to the field
should be conducted jointly, the 2011 survey reported that only 25% of 210 donor missions to
Ethiopia were conducted jointly, which decline from the rate of 29% in 2007. In addition,
regarding the proportion of country analytic work that is undertaken jointly, while the target of
2010 is 66%, the survey conducted in 2011indicted that, 52% of 153 analytical works were
coordinated which significantly different from 70% in 2007 (OECD, 2011).
Managing for results: Both donors and partner countries should manage resources according to
well-defined, desired results, measuring progress toward them and using information on results
to improve decision making and performance. The Indicator this is used to assess the quality of a
country’s results-oriented frameworks. In particular, it considers the quality of the information
generated, stakeholder access to information, and the extent to which the information is utilized
within a country level monitoring and evaluation system. Here, the government provides
evidence against these criteria through the survey and it translated by the World Bank into a
score running from A (highest score) to E (lowest score). In this case, Ethiopia awarded a B for
its results-based management practices and showed an improvement from 2007.
Mutual account ability: Here donors and partner country governments should be accountable to
their respective publics and to each other for implementing their commitments on aid, its
effectiveness, and the results to which it contributes. The indicator under this principle, there are
three criteria that must all be met: the existence of an aid policy or strategy agreed between the
partner country government and donors; specific country-level aid effectiveness targets for both
the partner country government and donors; an assessment towards these targets undertaken by
both partner and donors in the last two years, and discussed in a forum for broad-based dialogue.
The 2010 target for all partner countries is to have mutual assessment reviews meeting these
criteria in place. Ethiopia has not met the 2010 target for mutual accountability. Mutual
accountability in Ethiopia is challenged by the absence of specific country-level aid effectiveness

15
targets for both the country and donors, and the absence of assessment towards these targets
undertaken by both the country and its donors (see table 3 below).
Table 3: Progress on Effectiveness of Aid with Respect to the Paris Declaration

Source: OECD (2011)

As indicated in table 3 above, the summary of results showed that out of 13 indicators for the
targets set, only five have been met and the progress has been uneven. In addition, there has been
no improvement in aligning aid flows to national development strategies since 2007, but
managing for results has improved, with a B score being allocated. The three indicators on
harmonization were not met in 2010, and displayed varying trends. In 2010, 86% of scheduled
disbursements to Ethiopia were recorded by the government which exhibits an improvement
from 2007. The indicator on joint missions experienced a delay in 2010 in comparison with the
2008 Survey, and there were setbacks for the remaining indicators on joint country analytical
work and use of common arrangements or procedures for the same period. Significant progress
was made on a number of alignment indicators, including co‑ordinated technical co‑operation,
use of public financial management systems and untying aid, which were all substantially above
target (OECD, 2011).

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5. Summary
Ethiopia has been one of the major recipients of international aid assistance in recent days due to
its locus of international attention in the Horn of Africa, continued the problems of widespread
hunger and poverty, rates of economic growth etc. currently, it has been receiving $3.5 billion on
average from international donors, which represents between 50 to 60 percent of its national
budget. The assistance aid provided to Ethiopia is from different sources. That is in the form of
multilateral or bilateral. This international aid has played a vital role in achieving the MDGs for
the country. However, even though, the large amount and growing level of aid in Ethiopia, still
there are a lot of problems in using the provided aid properly to eradicate poverty and enhance
the economic development of the country in order to improve the nation’s life.
Moreover, though, the Ethiopian consistent focus on poverty reduction programs and the
political commitment to achieving all the MDGs has resulted in significant gains on six of the
eight MDGs targets, additional efforts are required to advance and accelerate progress on
achieving the MDG targets on gender equality, women’s empowerment, and improved maternal
health where progress is less satisfactory using the provided aid appropriately.
Regarding aid effectiveness, although there is a significant progress was made on a number of
alignment indicators such as coordinating technical cooperation, use of public financial
management systems and untying aid, the indicators on joint missions such joint country
analytical work and use of common arrangements or procedures are setback.

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