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Rural Water Supply Corruption in Ethiopia 139
Sector planning issues. In terms of sector planning, there is a clear recognition
that to meet UAP and MDG targets and to ensure sustainability,
low-cost technologies that can be partially financed and maintained by
local communities are preferable to high-tech options (as previously
shown in table 4.1). Indeed, the revised UAP places a priority on low-cost
household technologies, including self-supply, as a key means of extending
water access in rural areas (MOWR 2008), although this approach is
not without its critics. 12
For rural water supply, then, low-cost, groundwater-based approaches
(self-supply, shallow wells, boreholes) are recognized as the only realistic
way of meeting dispersed demand across most areas of the country,
with private sector involvement based on local artisans rather than
large firms.
Budgeting and transfer-related risks. In terms of budgeting and transfers,
the rural water supply sector is characterized by a range of discrete
financing modalities, set against a background of political and administrative
decentralization. 13 The study team therefore addressed these key
questions: (a) whether the general shift toward budget support and alignment
creates opportunities for the misappropriation of funds and distortion
in on-budget and off-budget allocations; and (b) whether the
decentralization of resources to lower levels of government, where
administrative capacity is more limited, generates similar risk.
As noted above, corruption risk in both areas was assessed as generally
low, albeit with some regional variation. In particular, there was broad
consensus across stakeholder groups that budgeting and transfers are
rules-based and reasonably transparent, with well-developed systems of
monitoring and oversight, at least down to the regional level.
Specifically, on-treasury and on-budget funds managed through the
government’s core budget and expenditure system are allocated to
regions through block grants according to a strict formula developed by
MOFED and approved by the House of Federation, as further explained
in box 4.2. Similarly, on-budget and on-treasury funds channeled through
the new multidonor pooled fund—and ring-fenced, or earmarked, for
WASH investments—are allocated to regions through a similar, formulabased
approach, albeit through a parallel accounting system. 14 Remaining
(bilateral) donor investment in the sector (from Finland, Italy, Japan, and
the United States), and NGO investment in water projects, is generally
provided directly to service providers and is therefore off-budget and