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Construction Sector Corruption in Ethiopia 247
Sector Overview
In broad terms, Ethiopia’s construction sector falls into four categories:
roads, water supply and irrigation, power, and other public works, each of
which is summarized below.
Roads. Annual spending on roads in Ethiopia is estimated at approximately
US$1.2 billion, including spending on community roads. The following
entities and other factors affect road spending:
• ERA, in managing the road sector program, is by far the biggest spender,
accounting for about 20 percent of the national budget. It has a reputation
for being relatively professional and well managed but is increasingly
at risk of capacity constraints and is heavily reliant on the work of
a small number of experienced staff.
• “Direct labor” operations persist, under which government departments
own equipment and employ staff and labor directly engaged in
the construction and maintenance of some rural roads. In this regard,
Ethiopia is unusual compared with most other African countries,
which have already fully privatized the design and construction of
public works.
• In recent years, the RRAs have reduced their spending, mostly on maintenance,
as available funds are focused on the federal or woreda levels.
Regional capacity is reported to be variable but generally weaker than
federal capacity. The four largest RRAs operate autonomously, with the
remaining regions receiving ad hoc support from ERA. The scope of
this study does not extend beyond the four large RRAs.
• Community roads are set to see a rapid expansion, with more than 100
woreda development plans nearing the approval and implementation
stage. Meanwhile, a reported 40,000 kilometers (km) of community
roads are already being built each year under Ethiopia’s food security
program but with limited technical oversight. ERA’s inclusion of about
27,000 km of community roads in Road Sector Development Program
(RSDP) 3 represents an attempt to bring a degree of improved coordination
and oversight to this major area of investment.
Water supply and irrigation. For more information about this category,
see chapter 4 of this volume.