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Rural Water Supply Corruption in Ethiopia 165
(procurement and construction) end of the value chain, and stakeholder
perceptions vary in some instances. Moreover, given Ethiopia’s experience
with decentralization, there may be significant regional variation in
corruption risk.
The 10 recommendations below—focused on how to reduce risks and
strengthen accountabilities—are aimed primarily at federal and regional
governments.
Policy Making and Regulation
Available evidence—and the perceptions of government, donor, civil society,
and private sector stakeholders—indicates that corruption risk in the
policy and regulation area of the value chain is low. For example, few
opportunities for rent seeking at the policy-making level appear to exist
for politicians because funding mechanisms and prioritization are systematized,
reasonably transparent, and rules-based. Nonetheless, it is
clear that knowledge of and adherence to sector policies vary by region:
established regions such as Oromia enjoy a better reputation for good
governance and low corruption (at this and other levels of the value
chain) than others.
Sector stakeholders identified three particular areas of concern:
• The privileged position of state-owned drilling enterprises in borehole
construction
• Licensing procedures for private drilling companies
• The cost-effectiveness of drilling operations generally.
In each case, however, concerns relate more to governance and efficiency
than to corruption per se. State drilling capacity has been retained
and strengthened, providing government with capacity to operate in
remote areas or emergencies when risks may be too high for private contractors.
Nonetheless, SOEs are also engaged in routine drilling works, and
in some instances reportedly subcontract surplus work to the private sector.
The circumstances under which SOEs bid for work or are solesourced
(and subcontract to others) remain somewhat opaque, creating
the perception (at least for some stakeholders) of malpractice.
Recommendation 1: Clarify the position of SOEs and restrict their operations
to high-risk situations.
The position of regional drilling enterprises in the drilling market requires
clarification. In particular—to reduce perceptions of malpractice or unfair