A. Analysis and background:
Norway is a relatively small actor within the development field in Ethiopia. Norwegian assistance, administered by the Embassy, was for 2010 NOK 100,2 million. Ethiopia’s main development policy is embedded in its Growth and Transformation Plan (GTP). Norway’s support to hydropower development and natural resource management falls well in line with Ethiopian priorities to develop their industrial base and to become a net exporter of hydropower within the next 3-5 years. Ethiopia is in the middle of a comprehensive programme of developing their academic resource base with a total of 21 universities now established (out of 33 planned). The Embassy’s new agreement for continued support to the Universities of Mekelle and Hawassa underpins the development goals of the Government.
The Ethiopian government believes in Trade for Aid and are seriously developing their export sector. The Embassy’s efforts in the area of private sector, trade and investments have contributed to making Norway a more interesting partner particularly when it comes to the clean energy sector, . The strong focus on clean energy/hydro power development, where Norway is considered to have clear comparative advantages, is much appreciated, and the efforts are further strengthened through attempts to encourage Norwegian companies in possible contracts for delivering goods and services. Yara has a dominating position as supplier of fertilizers to the Ethiopian agricultural sector. The Embassy still maintains close contact with the Norwegian business ventures currently working with imports from Ethiopia, like the import of Fair Trade-certified roses by Mester Grønn and import of honey by Honningcentralen.
The natural resource management programme is also considered very relevant to Ethiopia’s own programmes and conservation agriculture including coffee, roses and honey exports to Norway is related to the sustainability of such programmes. The Embassy is also considering support to the Government’s Sustainable Land Management (SLM) programme.
B. Adaptation to climate change
The majority of the Ethiopian population lives in rural areas and is engaged in agriculture, showing heavy dependence upon natural resources for their livelihood. However, unwise use and management of natural resources has lead to severe environmental degradation. The impacts of climate change are more severe in Ethiopia as it is directly linked with food security.
Ethiopia`s Growth and Transformation Plan (GTP) considers Environment and Climate Change as one of the cross-sectoral issues by identifying both adaptation and mitigation measures as key implementation strategies.
The Embassy will in 2012-2014 continue to support on-going programs that have direct relevance for climate change adaptation. The Ethio-Norwegian UNCCD Program in Afar and Somali regions and the Sustainable Agriculture Program in Tigray regional State are considered highly relevant in helping farmers to adapt to the changing climate and improve food security. Program interventions such as water harvesting structures, irrigation schemes and watershed management are addressing the issue of adaptation to the changing climate, while at the same time supporting rural community livelihoods. Interventions that increase and diversify household incomes are also adaptation mechanisms.
The Bale Eco-region Sustainable Management Program has demonstrated Participatory Forest Management systems that consider livelihoods of communities as part of natural resources management. This program is relevant both for climate change adaptation and mitigation. The Ethiopian National REDD Readiness Preparation Proposal (R-PP) identified the Bale Eco-region as one of the REDD pilot projects. Some efforts are being done towards tapping the global carbon market in support of sustainable forest management through the REDD approach.
The Hawassa-Mekelle-University of Life Sciences (UMB) Institutional Collaboration Program is contributing to capacity building to address issues of natural resources management and climate change (both adaptation and mitigation).
Moreover, the Embassy, with technical assistance from Norad, is investigating possibilities and mechanisms to support the government-owned and donor-supported program on Sustainable Land Management (SLM), which is related to climate change adaptation. Norad has already carried out desk-based preliminary assessment, and also made several consultations with various partners. Field visits to program sites in Amhara and Tigray Regional States have also been organized with the participation of Norad to have a better impression of what has been done on the ground through the on-going SLM and other similar programs such as the Productive Safety Net Program (PSNP). The anticipated Embassy program would also promote Conservation Agriculture that encourages farming practices that contribute both to improving rural livelihoods, and mitigating and adapting to climate change.
C. Cross-cutting issues
Women’s rights and gender equality: In the period 2012–14 the Embassy plans to sustain and enhance its focus on gender by maintaining it as a cross-sectoral issue in all areas of its engagement in Ethiopia. The 2009 Norad Gender Review of the development cooperation portfolio was translated into a Plan of Action for Gender Equality and Women’s Rights by the Embassy in 2010 and will be followed up as needed by requests for funds via the 168.70 Women’s rights and gender equality budget chapter, to ensure that the Embassy’s partnerships are productive for both women and men. Women will remain the main focus in the fight against FGM and other harmful traditional practices and within the Rights-Based Approach to Adolescent and Youth Development. These programmes, both giving due attention to girls and young women, will remain as two key programmes within gender-related portfolio of the Embassy during the period. A major effort, however, in terms of conceptualisation and policy dialogue is required to mainstream gender issues across the development portfolio of the Embassy, in particular in relation to the emphasis that has been put on clean energy.
Climate change and environment: With increasing concern for the environment in general and climate change in particular, mainstreaming environmental issues across all sectors shall be given high importance. This is, in fact, in addition to retaining environment/climate change/ natural resource management as one of the priority development clusters at the Embassy. In 2009, Norad assisted the Embassy in undertaking a Review of the Embassy’s portfolio to identify possible ways and means of addressing/integrating appropriate climate change and environmental concerns in existing programs and projects.
As a follow-up to Norad`s recommendations, the Embassy prepared an Action Plan for Climate Proofing and Greening to integrate environmental issues into its development cooperation programs. All programs will be assessed for their social and environmental impacts. For example, the Embassy has been following-up on the social and environmental impact assessments of the hydropower projects.
Environment/climate issues have now become an important aspect to consider during program monitoring and evaluation. Specifically the Embassy is making the required follow-up to make sure that environment and climate is included as part of progress reports, discussed during annual program review meetings, considered as an aspect to observe during field visits and program evaluation.
The Embassy will encourage implementing partners to follow Ethiopian guidelines on environmental and social impact assessments The Embassy will make an effort to track Ethiopian policy dialogue and other activities on environmental/climate change, and share among the Embassy staff (and with MFA as appropriate). For example, Ethiopia has prepared its National REDD Readiness Preparation Proposal (R-PP) with support from the World Bank`s Forest Carbon Partnership Facility (FCPF) that Norway is also supporting through its Climate and Forest Initiative. Climate change adaptation and mitigation is a theme in the new Growth and Transformation Plan and Ethiopia is in the process of developing plans and policies to become a Climate Resilient Green Economy by the year 2025. Moreover, the Embassy will facilitate conditions to further strengthen Norway`s cooperation with the Ethiopian Government in advancing issues of common concern in climate change negotiations
The Embassy will also do its part towards a low carbon economy where it will prepare an internal “greening” plan with the view to reduce the environmental/climate footprints of the Embassy’s operation.
D. Illicit financial flows and corruption
The Norwegian Embassy does not have exact figures for the illicit financial flows and tax evasion in Ethiopia, but assumes that the Ethiopian government loses significant amounts of revenue every year in lost income from money moved offshore by private companies This money could pay for health and education services, for protection against the impact of the economic crisis and for projects such as the Productive Safety Nets Programme to protect people affected by climate change and humanitarian disaster.
Improved tax collection is underway through a comprehensive effort by the Government to improve the low tax collection (down to approximately 12 % of GNP from 16% before the recent high economic growth). The Embassy will consider possible Norwegian interventions.
Anti-corruption is high on the agenda in Ethiopia, both within the government and among the public. A national Anti-Corruption Coalition that aims to intensify the anti-corruption drive in the country was officially formed in 2009. A bill was approved by the Parliament April 2010 that forces government officials to register all their own and their relatives’ private properties. Whistle-blowers will be rewarded 25 percent of value of the assets recovered and those found guilty could receive prison sentences of up to three years.
Ethiopia is one of the seven pilot countries of the Construction Sector Transparency Initiative (CoST). The National Executive Committee has already launched operations. The Ethiopian government is also working closely with the Extractive Industry Transparency Initiative (EITI), which aims to strengthen governance by improving transparency and accountability in the extractive sector.
The Norwegian Embassy will continue to facilitate dialogue between Global Financial Integrity (GFI) and the Ministry of Finance and Economic Development (MoFED) concerning cooperation about illicit capital flows and trade mispricing. Through the multi-donor Democratic Institutions Programme, the Embassy will continue to support the Federal Ethics and Anti Corruption Commission (FEACC) in increasing its institutional capacity and raising public awareness on corruption.
E. Humanitarian disarmament efforts and prevention of humanitarian crises
The Embassy will in 2012-2014 continue to support the Ethiopian government’s efforts to meet its obligations under the Mine Ban Convention, by diplomatic dialogue and support to the capacity building of the Ethiopian Mine Action Office through agreement with Norwegian People’s Aid. Ethiopia may meet its mine-clearing targets as early as 2013, but there are other issues remaining, such as the Cluster Munitions Convention (not yet signed by Ethiopia, but with explicit commitments to do so). The training facilities constructed by EMAO and NPA is an important resource that may be put to valuable use in a regional context.
Various humanitarian crises continue to be formidable challenges facing Ethiopia. Lack of adequate rainfall combined with a poor resource base and continued population growth in the face of increasing food prices makes a significant part of the population dependent on emergency food aid. The government follows a two-pronged approach in dealing with this situation and needs continued support to emergency measures like provision of food aid and establishment of an all-hazard early warning and response system, but more importantly to the long-term efforts to become self-sufficient in food. The government’s nationwide Productive Safety Net Program (PSNP) and its Sustainable Land Management Program (SLMP) are thus initiatives that directly address humanitarian crisis. The PSNP receives considerable attention from a number of donors but may need to adjust the time horizon for achieving the anticipated impacts in terms of self-sufficient communities.
Norway supports efforts directed at the humanitarian situation in Ethiopia through contributions to the multilateral agencies (UNICEF, OCHA, WFP and CERF) but also provides support to national efforts like the HRF (Humanitarian Response Fund) and various agencies with particular programmes in Ethiopia, e.g. international NGOs.
G. Administration of development cooperation
The Embassy has in the last few years made considerable progress in reducing the number of projects and concentrating on the priority sectors. A comprehensive agreement was signed with Ministry of Water Resources towards the end of 2009, representing the renewed Norwegian support to the energy sector (Mandaya and Beko-Abo feasibility studies) and which complements multilateral Norwegian funding to the Nile Basin Initiative.
The Embassy will continue to assess the possibilities for the merging of agreements and enter into different versions of delegated partnerships in order to make administration simpler and more efficient (e.g. Civil Society Support Programme, ref. K: Priority Sector 2 below).
The Embassy decided in 2009 to regroup the cooperation into two main sectors
1) environment, climate adaptation and clean energy
2) good governance.
This regrouping makes the focus clearer as all interventions will be categorized as either environment, climate adaptation and clean energy or good governance and will be grouped under the technically most relevant sector. The change is also more in line with sector definitions used in relation to development cooperation. GoE will appreciate this clarification and the more common designations for development sectors .
H. Channels for development cooperation
The major part of development assistance in Ethiopia has in the last few years been channelled through Norwegian NGOs and through the UN system. This strategic choice was mainly made as a consequence of the Eritrean/Ethiopian border conflict and later the situation after the 2005 elections. In the aftermath of the political crisis between Ethiopia and Norway in August 2007, a need for revision of this strategy was recognized and later approved by MFA.
A systematic process of assessing alternative options for more direct support to the Government of Ethiopia (GoE) and its poverty alleviation programmes (GTP) has taken place over the last three years. This process is ongoing and includes a dialogue with GoE. The agreement with GoE/Ministry of Water Resources (MoWR) on the support to the feasibility studies of Beko Abo and Mandaya, which was signed in November 2009, has increased the share of government–to-government development assistance substantially and created a better balance between the three channels for Norwegian aid flows (NGOs, UN/Bank and Government to Government). The agreement with GoE/MoWR (NOK 135,3 million over 3 years), constitutes about 1/3 of the current annual funds channelled to Ethiopia. The agreement with the GoE/MoWR also implies that Norwegian funds to a larger extent than earlier will be channelled through the Priority Sector 1: environment, climate adaptation and clean energy.
For the budget year 2010 the flows through the respective channels were as follows: Government-to-Government 21% (NOK 21,377 mill.), NGOs (strategic partnerships) 48% (NOK 48,141 mill.) and through multilateral agencies 31 % (NOK 31,092 mill) . The expenditure through the government channel was lower than planned last year due to delayed implementation of the projects.
The Embassy would recommend a continued increase in government–to government support and that the NGO(strategic partnerships) support is reduced. MoE like any other government, is interested in more of the bilateral funds being channelled directly to their own poverty alleviation programmes (GTP) and through the government structure.
In spite of the reduced funding, the NGO channel will continue to be vital for interventions such as e.g. the support to fight FGM and the Civil Society Support Programme. The latter is a pool funding arrangement for civil society expected to become operational in the second quarter of 2011 and is of particular importance in the context of the new CSO Law in Ethiopia. Additionally, one should not forget that there is a substantial number of NGOs operating in Ethiopia with funds from Norad’s global NGO allocation
The Embassy will seek to transfer the management of agreements with Norwegian NGO’s to Norad, in line with the guidelines for strategic partnerships.
I. Aid Effectiveness
In accordance with the Paris Declaration and the requests from the Government of Ethiopia, the Embassy aims at strengthening country ownership of development as well as enhancing the division of labour among likeminded donors.
The Embassy has continuous internal and external discussions on how it can make the most significant difference in contributing to the country's development outcomes. The aim to enhance aid effectiveness provides a framework to guide the Embassy’s policy dialogue, aid activities, partnerships and other elements that directly contribute to achieving development objectives. To ensure good results of the development cooperation, it must be aligned to the Ethiopian national development strategies, institutions and procedures that must be respected. The Norwegian Embassy is also an advocate for harmonisation of donor initiatives, in order to make the donors' actions more transparent, effective and harmonised with each other.
GoE has in the last couple years made efforts to develop a statistical data base for its development cooperation interventions. This is expected to become operational in 2011. A particular effort will be made to ensure inclusion of Norwegian support in GoE’s national budgeting and accounting processes and in the reporting framework, since the Embassy now transfers a substantial amount of its development budget directly to the government, in support of the clean energy agreement signed in November 2009. Norway has as a matter of policy abandoned the use of PIUs in Norwegian bilateral cooperation.
Norway will continue to participate in the efforts to enhance the Division of Labour (DoL) among the EU donors. The Embassy will also continue to explore the possibilities for delegated partnerships in order to increase the aid efficiency.
The Embassy’s home page is increasingly being used as an information channel for information about projects and programmes. The Embassy will also influence the recipient/development partner to increasingly inform the public about transfers of funds, e.g on web pages of the ministries and universities concerned.. Increased predictability regarding transfer of funds to Ethiopia will be secured through the annual consultations and increased dialogue with MoFED as well as multi-year agreements.
J. Risk assessment and prevention
The new Charities and Societies Proclamation was made fully effective as from February 2010. Non-government organisations have re-registered with the newly created government agency .
Corruption and non-transparent financial transfers is another main issue for the development cooperation. The prevention of economic misuse in Norwegian-supported interventions is high on the agenda in the preparatory stage of all interventions supported by the Embassy. During the implementation stage the narrative as well as the financial reports will be scrutinized by the Embassy personnel, but in order to have a more professional and in-depth assessment of the financial matters, the Embassy has engaged an auditing firm whose expertise increasingly will be drawn upon.
Risk assessment and risk mitigation in the preparatory and implementation phases of interventions supported by the Embassy are strengthened. Increased attention and efforts are made to improve program design and result frameworks in new program agreements to better facilitate monitoring of results.
In 2009, the Embassy’s regional and bilateral development portfolio was reviewed by a Norad administrative review and in 2010, the Norwegian Auditor General made an audit of parts of the Embassy’s work. Based on the recommendations from the two reviews, selected measures to minimise risk and ensure quality will be strengthened. One tool to be used more actively is the use of monitoring visits as a tool for preventive purposes as well as to reveal possible gaps between reports and reality and thereby possible misuse of funds. Financial irregularities are dealt with according to the MFA guidelines for handling suspicion of financial irregularities.
Furthermore, the Embassy has included discussion on anti-corruption measures as well as other sustainability factors in annual meetings for the projects/programmes supported by Norway. A U4 course on anti-corruption by the U4 Secretariat was held for partners in November 2010. Reviews continue to be a strong tool both for monitoring as well as documenting results. Reviews are actively used to improve program design and program performance.
There will be a continued strong focus on quality assurance through capacity building and training.
K. Goals for the Ethio-Norwegian development cooperation 2012
In accordance with the guidelines from the Ministry of Foreign Affairs, the Embassy has simplified the programming of its national development cooperation into two sectors: (1) Environment, climate adaptation and clean energy and (2) Good governance
Priority Sector 1. Environment, climate adaptation and clean energy.
The goal of the sector is reliable and environmentally sustainable power supply and improved living standards for people in Ethiopia and the region as well as to enhance and diversify livelihoods of the rural poor while maintaining the general health and resilience of natural life-support systems, and the stock of productive natural resources in particular and the environment at large.
Within the clean energy portfolio, most agreements will expire during 2012. It will be a high priority for the Embassy in 2011 and 2012 to establish new agreements within the energy sector based on dialogue with the Government, on the basis of the Growth and Transformation Plan (Ethiopia’s 5 years plan) and a holistic strategy for approaching the sector. Steps have already been made to map the energy sector and to identify gaps and areas where Norway as a development partner can make a difference.
Priority Sector 2. Good governance
Sector goal: The goal for the sector 2 is that democratisation, anti-corruption interventions and humanitarian mine action of Ethiopia is accelerated, contributing to stable pro-poor economic growth, human rights and social development