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52 Diagnosing Corruption in Ethiopia
• A large share of this funding goes to international procurement managed
by foreign consulting firms (such as Management Sciences for
Health, which procures for the PEPFAR program) or UN agencies (for
example, UNICEF, which the FMOH has asked to purchase
vaccines)—so the funds do not necessarily even enter the country.
• Even foreign aid disbursed directly to organizations in Ethiopia is
subject to external, often foreign, audits. For example, the GFATM
contracts with an international consulting firm to audit the programs
managed by its country coordinating groups.
Diversion and theft of commodities. The Ethiopian government has
anticipated the prospect of diversion and theft. One case, currently under
investigation by the FEACC, came to light because the government was
sweeping domestic markets for illegally obtained bednets. With financial
support from the GFATM, Ethiopia undertook the largest program to
date for delivery of insecticide-treated bednets in regions where malaria
is endemic. With a goal of distributing 20 million bednets, the program is
probably the largest of its kind anywhere in the world. At a cost of about
US$5 per unit, this large volume of bednets is also a tempting target for
theft and resale. At least one NGO purchased 5,000 bednets on the open
market and discovered, upon delivery, that the bednets had been stolen
from the FMOH; this is the case under FEACC investigation. Other allegations
have been made about bednets purchased with foreign assistance
being diverted for private resale within Ethiopia and abroad.
Other commodities that are potentially being diverted include highvalue
medicines such as antiretrovirals, antimalarials, and antibiotics. The
Ethiopian government guarantees free access to particular medicines
such as antiretrovirals for treating HIV/AIDS and insulin for treating
diabetes. Because these medicines are available for free in public pharmacies,
they are not supposed to be sold in private pharmacies. In fact,
there shouldn’t be a market for drugs that are provided free of charge in
public facilities. Nevertheless, drugs are not always reliably available in
public pharmacies—possibly because of manipulation by stock managers
and pharmacists. Interviewees also told us that people will pay for
these medications to avoid visiting public facilities. Some drugs are also
allegedly being taken outside the country for resale.
Embezzlement and fraud through public channels. The second major
risk of corruption involves foreign aid channeled through the government’s
financial management and procurement systems. Given the