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27 November, 2007
Britain’s newly appointed Minister for International Development, Shriti Vadera, has described Ethiopia’s economy as “very successful”, but shunned reporters’ questions on whether she thinks it is based on free market principles.
Returning from Awassa, the seat of the Southern Regional State, at the conclusion of a three and half-day visit to Ethiopia, Mrs. Vadera told the media that Ethiopia’s 10pc growth in GDP is “quite enviable”.
“I think what I would say about Ethiopia’s economy is that currently it is very successful,” she said on Thursday, November 22, 2007, briefing journalists in the newly built office of the Department for International Development (DFID), located inside the United Kingdom (UK) Embassy.
But she was observed to be reluctant to describe Ethiopia’s economy as free market or quasi-free.
“It is obviously the government’s decision about how it manages its economy,” Mrs. Vadera said. “It certainly is showing every sign of success now.”
She said she is impressed to see the growth in Ethiopia as different from many other economies for it showed an impact on poverty reduction.
“The interesting thing about the economy is that the growth rates are actually having an equitable impact on poverty,” said the Minister.
Her focus on poverty reduction also remains a main agenda of her Department’s programme in Ethiopia. The second largest supporter of Ethiopia’s government development programmes, next to the World Bank, DfID’s aid reached 130 million pounds (2.4 billion Br) in 2007/08, which exceeds by 123 million pounds (2.2 billion Br) what it was nine years ago.
DfID is also one of the six donors that changed the direct budgetary support in Ethiopia to what is largely known now as the Protection of Basic Services (PBS), an aid arrangement designed to transfer block grants directly to low administrative levels. The Minister seems quite happy with what PBS brought.
“Everybody is happy with the current level of funding and the impact we are having,” Vadera said.
However, before she departed to Uganda the same night, the Minister announced on Thursday her Department’s decision to grant 75 million pounds (1.4 billion Br) of additional support she described as complementary to PBS. The money is allocated to expand water, sanitation and hygiene projects in Ethiopia. The World Bank will administer the fund through its ongoing Water Supply and Sanitation Project, while the remaining five million pounds (92 million Br) goes to the United Nations’ Children Fund (UNICEF) for providing technical assistance to build the capacity of graduates, technicians and health workers.
Ethiopia, a country with the lowest access to water and sanitation in Africa, has 38 million citizens lacking clean and reliable water supply, according to studies conducted by DfID. Whenever it is available, half of all Ethiopians are also obligated to walk an average of 1.5Km to fetch water. Ethiopia needs an annual sum of 300 million pounds (5.5 billion Br) in order to meet the Millennium Development Goals (MDGs), which has one of it eight targets to halve the number of people who do not have access to water and sanitation, according to DfID.
Ethiopia’s government has designed an ambitious plan of achieving full coverage of water and sanitation access by 2012/13; it claimed to have reached half of its plan nationwide. Asfaw Dingamo, minister of Water Resources, who accompanied Vadera during the press conference, claimed Ethiopia has 46.4pc of its rural and 82pc of its urban population with access to water.
The statistics provided by the government, however, show a huge gap between rural and urban areas. With the fund DfID granted last week, the government is expected to pay for the development of 7,000 water points, as well as protected springs, wells and water pipes in 300 woredas and 37 towns.
By TESFALEM WALDYES - SPECIAL TO FORTUNE