Ethiopia Aid effectiveness in the health sector - Action for Global ...

Ethiopia 

Aid effectiveness 

in the health sector 

Author: Javier Pereira 

September 2009 

Action for Global Health partners: 

case study

Ethiopia – Aid Effectiveness in the health sector 

Table of contents 

Acronyms......................................................................................................................... 3 

Methodology .................................................................................................................. 4 

Executive summary........................................................................................................ 6 

1. Country overview....................................................................................................... 8 

Progress in the health sector..................................................................................... 8 

Aid programmes in the health sector...................................................................... 9 

2. Aid Effectiveness in Ethiopia................................................................................... 11 

Alignment, harmonisation and budget support .................................................. 11 

Vertical donors, a wind shift?.................................................................................. 13 

Country ownership ................................................................................................... 15 

IHP+............................................................................................................................. 16 

Politics are part of the aid game ........................................................................... 18 

3. Democratic ownership............................................................................................ 19 

Overview of CSOs in Ethiopia ................................................................................. 19 

CSO regulation ......................................................................................................... 20 

The role of CSOs in the health sector..................................................................... 22 

4. Conclusions and recommendations..................................................................... 23 

Endnotes........................................................................................................................ 25 

2


Acronyms 

AAA – Accra Agenda for Action 

AE - Aid Effectiveness 

CCM - Country Coordination Mechanism 

CSO - Civil Society Organisation 

DAG - Development Assistance Group 

DANIDA - Danish International Development Agency 

DFID - UK Department for International Development 

DoL - Division of Labour 

DP - Development Partner 

EC - European Commission 

EIFDDA - Ethiopian Inter-Faith Forum for Development, Dialogue and Action 

EPRDF - Ethiopian People's Revolutionary Democratic Front 

GDP - Gross Domestic Product 

HDI - Human Development Index 

HSDP - Health Sector Development Plan 

HEP - Health Extension Program 

HEW - Health Extension Worker 

IMF - International Monetary Fund 

INGO - International Non-Governmental Organisation 

MDG - Millennium Development Goal 

MoU - Memorandum of Understanding 

NEP+ - Networks of HIV Positives in Ethiopia 

NGO - Non-Governmental Organisation 

NSA - Non-State Actor 

ODA - Official Development Assistance 

OECD - Organisation for Economic Cooperation and Development 

OECD-DAC - OECD Development Assistance Committee 

PAF - Performance Assessment Framework 

PBS - Protection of Basic Services 

PD - Paris Declaration 

PEPFAR - US President's Emergency Plan for AIDS Relief 

SAG - Sector Advisory Group 

SWG - Sectoral Working Group 

SWAp – Sector-Wide Approaches 

TB – Tuberculosis 

TWG- Technical Working Group 

3


UN - United Nations 

UNICEF – United Nations Children’s Fund 

UNDP – United Nations Development Fund 

USAID - United States Agency for International Development 

USG – US Government 

VCHW- Volunteer Community Health Worker 

WHO – World Health Organisation 

Methodology 

This report is based on original research carried out between July and 

September 2009 using qualitative methods. The process was divided into five 

different and consecutive stages. 

1. Preparatory research 

A literature review of all existing material such as publications, policy, and case 

study research and methodologies helped to shape the research design. After 

identifying the different sources of information, a list of key informants from 

different backgrounds was elaborated. 

2. Contact and networking 

Before the interviews, all possible contributors to the research were contacted; 

the purpose and scope of the research was explained (a summary of the 

research plan was sent to all the informants), and several letters and faxes were 

sent out, asking for permission to carry out the interviews. 

3. Research trip and interviews 

At the end of July and beginning of August 2009, interviews were carried out in 

Addis Ababa. Notes were taken by hand during the interview and afterwards. 

Thus quotes are sometimes approximations. Some interviewees were then 

contacted again by email in order to clarify certain aspects of their 

contributions. 

4. Review of information and elaboration of a first draft 

After gathering all the information, a first draft was elaborated and sent to 

Action for Global Health at the end of August 2009. The report was 

subsequently adapted according to the suggestions and comments received. 

5. Final version 

The final version of this report was submitted on the 15 September 2009. 

List of interviewees: 

• Hailom Bante, IHP+ National Expert 

• Iyasu Dagmawi, P.H.C & D Technical Support Service (development 

consultancy) 

• Kunal Dhar, Governance Adviser, DAG Ethiopia – Governance TWG 

4


• Holie Folie, Director, Consortium of Reproductive Health Associations 

(CORHA) 

• Richard Gregory, Deputy Health Adviser, DFID Ethiopia 

• Alexander O’Riordan, Aid Effectiveness Expert, Delegation of the EC 

• Dr. Theo Pas, Sector Specialist Health, HIV/AIDS, Royal Netherlands 

Embassy 

• Dr. Meshesha Shewarega, Director, Christian Relief & Development 

Association (CRDA) 

• Marisa Traniello, Programme Manager, Procurement and Supply Chain 

Management, Clinton Foundation 

5


Executive summary 

Ethiopia is the second largest country in Africa by population; 84% of people 

live in rural areas. The starting point in terms of development in Ethiopia was 

poor and guaranteeing access to basic health services depends on heavy and 

long term investments. Difficulties are further increased by the country’s difficult 

topography. 

Strong economic growth and innovative health programmes in the health 

sector are leading to important improvements in health services. Still, progress is 

far from optimal. Both maternal and under-five mortality rates will have to 

decrease by half in order to meet Millennium Development Goals (MDGs) 4 

and 5 by 2015. 

More effective aid should help to speed up progress in the health sector, but 

political disagreements resulting from the Government’s poor record on human 

rights are holding back advances on alignment and harmonisation. Despite 

good progress on poverty reduction and health indicators, the situation is at 

stalemate and it is not likely to change in the short term. In addition, vertical 

donors remain outside alignment and harmonisation efforts, hence limiting the 

amount of progress which could be achieved. 

Ethiopia was one of the first countries where the Government and donors 

signed an International Health Partnership and Related Initiatives (IHP+) 

Compact. However, full implementation seems unlikely in the short term. Donors 

are reluctant to start delivering on their commitments because of their political 

differences. In addition, the IHP+ does not include Ethiopia’s largest donors, the 

Global Fund and the US President’s Emergency Plan for AIDS Relief (PEPFAR), 

which constrains the initiative and its outcomes. 

Major vertical donors in Ethiopia are showing positive signs of change. The 

Global Fund is making efforts to increase the impact of its activities on the 

health sector overall. PEPFAR has announced a move towards better alignment 

and harmonisation as principles of Aid Effectiveness (AE), but it still has to put 

this into practice. However, one should not expect to see a radical 

transformation of these donors. Internal regulations limit their movements and 

changing them will take time. 

“Democratic ownership” is still missing in Ethiopia. The Government is showing 

leadership in aid processes but it is not contributing to creating an enabling 

environment for Civil Society Organisations CSOs. The role of CSOs and 

Parliament is therefore weak. The situation of CSOs working in the health sector 

is better but poor access to financial resources and lack of capacity are still 

problems. Moreover, some donors such as the US Agency on International 

Development (USAID) prefer to work with International Non-Governmental 

6


Organisations (INGOs), something which does not contribute to strengthening 

national CSOs. 

7


1. Country Overview 

Ethiopia is currently the second largest country in Africa by population and has 

one of the highest growth rates in the world at 3.21%. 1 Every year, the 

population increases by more than 2 million people. Over 84% of Ethiopians live 

in rural areas, 2 something which, in a big country with little infrastructure and an 

extremely difficult topography, makes the task of delivering essential services 

very difficult and heavily dependent on infrastructure and investment. 

Ethiopia is among the poorest countries in the world. Despite robust economic 

growth over the last five years (over 11% annually), 3 the country still features 

169th out of 179 countries on the Human Development Index (HDI) ranking. 4 The 

share of population living below the national poverty line has decreased over 

the last few years, but still stands at 35%. At the same time, Gross Domestic 

Product (GDP) per capita in 2007 was US$780, or just over US$2 a day, which 

means a significant share of the population still lives below the World Bank’s 

moderate poverty line (the latest figure available is 78%). 5 

In the last few years, Ethiopia has gained significance as an aid-recipient 

country. In 2001, Ethiopia received US$1 billion, two-thirds of which was 

provided by multilateral agencies and with a strong emergency component. In 

2007, the figure had risen to US$2.4 billion and slightly over half was provided by 

Organisation for Economic Cooperation and Development-Development 

Assistance Committee (OECD-DAC) donors. 6 

However, at present, the biggest Development Partners (DPs), both in general 

terms and in the health sector, are PEPFAR and the Global Fund to Fight AIDS, 

Tuberculosis and Malaria (see page 9). While the arrival of these two donors has 

boosted resources in the health sector, it has also unbalanced the distribution 

of funds. Accordingly, one of the main challenges for AE in Ethiopia is to 

increase the harmonisation of vertical donors. 

Progress in the health sector 

Ethiopia is also making progress in the health sector. Maternal mortality rates 

have decreased from 871 deaths per 100,000 births in the 1990s to 673 per 

100,000 in 2005/2006. Similarly, the national under-five mortality rates also went 

down from 180 in 1992/1993 to 123 in 2004/2005. 7 In spite of the improvements, 

Ethiopia still has a long way to go. Both maternal and under-five mortality rates 

will have to decrease by half in order to meet MDGs 4 and 5 by 2015. 

We have seen that most people in Ethiopia live in rural areas. As a 

consequence, one of the main challenges for aid and the health sector in 

Ethiopia is bringing health services to the population. This requires long-term 

programmes, sustained aid and good coordination among DPs, the 

Governments and Non-Governmental Organisations (NGOs) working in the 

8


health sector. The Government, with the support of DPs, has put in place 

innovative programmes to bring health to rural areas. So far, results are 

encouraging and progress on the health MDGs could speed up over the next 

few years. 

Aid programmes in the health sector 

Parallel to the National Development Plan, the Government of Ethiopia is 

currently implementing three-five year rolling plans for the health sector known 

as the Health Sector Development Plan (HSDP). The programme includes 

different components aimed at addressing Ethiopia’s main health problems. 

These include reducing maternal and child mortality, decreasing the fertility 

rate and fighting HIV/AIDS, TB and malaria. 

The HSDP also places strong emphasis on expanding basic health coverage 

through an innovative programme called the Health Extension Plan (HEP). The 

HEP must be seen not only as a component of the HSDP but also as the tool by 

which the Government plans to achieve all the other targets. The 

implementation of the HEP started in 2003, during HSDP Stage II, with the 

objective of improving equitable access to preventive essential health through 

community-based health services, with a strong focus on sustained preventive 

health actions and increased health awareness. 8 

The HEP aims at deploying two female Health Extension Workers (HEW) in each 

village (more specifically, in each of the 15,000 Kebeles – the smallest 

administrative unit in Ethiopia). The reason for selecting women for this role is 

that they can have access to a greater share of the population, especially 

when it comes to reproductive health. HEWs are high-school graduates, who 

attend a one-year course at technical and vocational training and education 

centres. During the training, HEWs learn about basic healthcare; their main tasks 

are preventive and educational. They are also responsible for referring patients 

to health centres for basic health care) or district hospitals for more advanced 

services. 9 

The initiative is now close to its midterm completion point. By the end of 2007, 

more than 24,000 HEWs had been trained and the target of 30,000 HEWs by 

2008 has probably been reached. i The construction of health posts is also 

progressing at a good pace: by the end of 2007, more than 4,000 posts were to 

be built; but the target of 15,000 posts by the end of 2008 has probably not 

been met. Construction is lagging behind mainly in the regions of Benishangul 

Gumuz, Gambella, Oromiya and the pastoralist areas in Ethiopia’s Southern 

Nations, Nationalities and People’s Region (SNNPR). 10 

i Official statistics and progress reports are released with significant delays in Ethiopia, 

hence the gap. 

9


HSDP III will end in financial year 2010-2011. By then, the HEP will probably be 

fully functional across the country. Some of the key targets being discussed for 

HSDP IV are to ensure that HEWs and the health posts are well-resourced so that 

all other basic health aspects in the HSDP can be adequately addressed; to 

continue working towards further harmonisation and alignment, and to start 

addressing broader health issues such as nutrition, population and emergency 

preparedness. 

DPs have focused their support to the HSDP on the HEP. Main contributors to the 

HEP during HSDP III are: the Government (for salaries for HEWs, construction, 

supervision); the GAVI Alliance (for health systems strengthening and HEW 

capacity-building); the Global Fund (equipment); Protection of Basic Services 

(PBS) (logistics master plan, equipment); USAID (HEWs and Volunteer 

Community Health Workers (VCHWs) training); and UNICEF (health post kits 

support, HEP website development). Other DPs also provide indirect support to 

the HEP through HSDP III programmatic areas. In addition, part of the DPs’ 

funding is channelled through a number of NGOs and special programmes. 

This picture of DPs and the health sector is relatively new. There were major 

changes in the DPs’ approach resulting from the 2005 elections. One hundred 

and ninety-three civilians were killed following the release of a report by the 

European Union Election Observer Mission which showed irregularities during the 

elections. 11,12 Before this, DPs provided a significant amount of budget support. 

After the election turmoil, DPs withdrew direct support for political reasons, ii but 

recognised that it was necessary to continue giving aid, especially to health 

and education sectors, while keeping better track of the money and how it 

was spent. 13,14 

DPs came up with the Protection of Basic Services programme (PBS), a basket 

fund for health and education, managed and monitored by the World Bank. 

PBS is currently entering Phase II and more than US$1.2 billion has been 

committed by 12 DPs for the period 2009-2011. This is a significant increase on 

previous figures. 15 

Nonetheless, since 2005, the work of “traditional donors” in the health sector 

has been pushed into the background by the arrival of vertical donors such as 

PEPFAR and the Global Fund. The latter are currently not only the biggest 

donors to the health sector, but also the biggest contributors overall of aid to 

Ethiopia. Their arrival has posed new challenges in terms of harmonisation and 

coordination, as well as creating new opportunities for the health sector. 

ii The OECD CRS online database, does not show a major drop, but this could be due to 

the arrival of new Vertical Funds (VFs) and the fact that donors continued providing 

programmatic aid, even if it was not direct budget support. 

10


2. Aid Effectiveness in Ethiopia 

Alignment, harmonisation and budget support 

Ethiopia is the fourth largest recipient of Official Development Assistance 

(ODA). 16 This means it is also one of the countries with the largest donor 

community. DPs coordinate their work via the Development Assistance Group 

(DAG), which is the highest level coordination group. At a secondary level, 

work is divided among 11 technical working groups (relating to gender 

equality, health, governance, etc.). 17 

About the DAG 

The DAG comprises 25 donor agencies providing development assistance to Ethiopia 

within the Paris Declaration (PD) principles of aid effectiveness and harmonisation. 

DAG members are: the African Development Bank (AfDB); Austrian Development 

Cooperation; Belgian Development Cooperation Agency; Canadian International 

Development Agency (CIDA); Danish Embassy; DFID; European Commission; Finland 

Embassy; French Embassy; German Embassy; GTZ-Ethiopia; Indian Embassy; 

International Monetary Fund (IMF); Irish Aid; Italian Development Cooperation; 

Japanese Embassy; Japan International Cooperation Agency (JICA); KfW, Dutch 

Embassy; Norwegian Embassy; Swedish International Development Agency (SIDA); 

Spanish Agency for International Development Cooperation (AECID); UNDP: USAID and 

the World Bank. 

The work plan of the DAG is set by the Executive Committee. Members of the 

Committee include UNDP and the World Bank as DAG co-chairs, and three 

representative DAG members on a rolling one-year basis. 

DAG Ethiopia 18 

While these structures are necessary for DPs to coordinate and harmonise their 

work, they can also strain already stretched administrations. At the highest level, 

DAG and Government representatives engage every year in the High-Level 

Forum to discuss policy issues. At a secondary level, and focusing on specific 

sectors, DPs and the Government conduct Joint Annual Reviews, for instance in 

the education sector. 19 Moreover, each of the Technical Working Groups 

(TWGs) meets regularly with their Government counterparts. In addition to the 

DAG structures, each DP’s project has a steering committee, chaired by a 

project manager and where the Government is also represented. 

The complexity and frequency of dialogue structures has increased in line with 

the number of donors and the amount of aid reaching the country. However, 

more dialogue does not necessarily mean better aid. Too much interaction can 

also stretch the Government’s capacity and workforce. There is a risk that these 

constant and detailed interactions between DPs and the Government might 

11


come at the expense of the Government engagement with Parliament and 

civil society. 20 

The number of ‘dialogue spaces’ and donor representatives should be limited 

to reduce red tape. In fact, in 2007 the Government informed the DAG that it 

wanted to streamline the coordination structures and replace the TWGs with 

five Sectoral Working Groups (SWGs): Rural Development and Food Security, 

Private Sector, Transport, Gender, and Water. In response, the DAG has created 

some SWGs, while some of the TWGs are still engaged in discussions with their 

Government counterparts. 

DP partners should strive to conclude these discussions as soon as possible. 

However, the DAG has stated that it will continue to work internally on the basis 

of the 11 TWGs. Even though this process is still at an early stage, it is difficult to 

see how this reaction will help improve coordination and alignment and not 

hamper dialogue. Furthermore, it has been two years since the Government 

requested that the DAG streamline the dialogue spaces and this process is still 

underway. This suggests that DPs are either not very keen on the process or they 

have not yet managed to agree on distribution of tasks. 

After the 2005 elections, DPs made significant changes to aid modalities in 

Ethiopia. Many DPs moved away from budget support and decided to pool 

their funds instead. Some donors who were working in Ethiopia when budget 

support was on the rise mentioned that the results were far behind the 

experiences of Ghana, Mozambique and Tanzania. Ethiopia is a federal 

country and the Government is completely decentralised. There is only a 

central budget for defence and foreign affairs and the rest of funds are 

transferred to district authorities, according to rules based on population, etc. 

This made it difficult for donors to track their money, especially when they had a 

target sector for budget support. Even though DPs wanted to support the 

health sector, in practice district authorities received their entire budget and 

redistributed funds at will. Bearing in mind that there are 611 districts or woredas, 

monitoring funds would have been a titanic task. 

The Government is probably aware of these difficulties. In the IHP+ Compact it 

states that the preferred instrument for DPs’ support to the health sector is not 

budget support but a basket fund managed by the Ministry of Health (MoH), 

the MDG Fund. In theory, the MDG Fund should replace the existing Protection 

of Basic Services (PBS) scheme. But DPs are not very keen on this because of 

the political consequences of providing direct support to the Government after 

the last elections as well as the new controversial Charity Law (see below). 

A major obstacle to achieving a higher degree of harmonisation in Ethiopia is 

the lack of commitment from the country’s largest donors: USAID, PEPFAR and 

the Global Fund. The volume of aid of all other donors to the health sector 

12


dwindles in comparison to the amount they provide. The use of their own 

procurement systems and delivery channels has also originated parallel 

structures (for example, the DAG has one TWG for Health, Nutrition and 

Population and another devoted to HIV/AIDS exclusively). Moreover, internal 

regulations tend to hamper coordination efforts. It is no wonder that PEPFAR has 

been described by one interviewee as “the worst fragmenter”, on the basis of 

its difficulties coordinating with other donors or aligning their procurement and 

aid delivery mechanisms. 21 

Vertical donors could bring real change to the health sector if they 

coordinated their efforts better. The MDG Fund is the Government’s preferred 

funding mechanism but without the participation of the bigger vertical donors, 

it amounts to little. Actually, it is being used to fill the procurement gaps left by 

vertical donors. Both the Global Fund and USAID/PEPFAR, have started to show 

signs of change (see section on Vertical donors below), but they still have a 

long way to go in terms of alignment and harmonisation. 

Key challenges 

Political disagreements resulting from the Government’s poor record on human 

rights are holding back advances on alignment and harmonisation. Despite 

good progress on poverty reduction and health indicators the situation is at 

stalemate and it is not likely to change in the short term. In addition, vertical 

donors remain outside alignment and harmonisation efforts, hence limiting the 

amount of progress which could be achieved. 

Vertical donors, a wind shift? 

Ethiopia’s HIV/AIDS prevalence rate is low compared with other African 

countries at2.1% in 2006-2007. 22 As has been described, the two biggest donors 

to Ethiopia are PEPFAR (US$355 million in 2008) 23 and the Global Fund (over 

US$1.3 billion approved since 2003 with US$590 million already disbursed) 24 – 

both of which focus on HIV/AIDS. Even if Ethiopia’s large population means over 

1.5 million people are infected and HIV/AIDS is one of the main causes of death 

(12% in 2002, though prevalence was twice as high back then) 25 , it is not difficult 

to see that the distribution of resources in the health sector for different diseases 

is uneven. 

Other illnesses such as respiratory infections (excluding TB) kill just as many 

people, and diarrhoea and perinatal conditions are not far behind. However, 

only around US$70 million was allocated by OECD-DAC countries to support the 

entire health sector. 26 This amount does not include aid provided as budget 

13


support. But it still does not withstand comparison with the money going into 

HIV/AIDS, TB and malaria. 

It has been mentioned before that this uneven distribution of resources has 

created problems with harmonisation and duplication of structures. In addition, 

both PEPFAR and the Global Fund have been criticised for focusing too much 

on urban areas and not supporting health efforts in rural Ethiopia. 27 It is true that 

HIV/AIDS has a much higher incidence in big population centres (incidence in 

urban areas is 5.5%, versus 0.7% in rural areas). 28 However, with 83% of the 

population living in rural areas, the total amount of infected people living in 

rural and urban areas is approximately the same. 

Furthermore, it has been argued that PEPFAR has very high transaction costs, 

makes heavy use of technical assistance and delivers very little value for 

money. As one of the interviewees put it, “It spends a lot, but reaches a few”. 29 

The Global Fund has traditionally been seen as a more versatile player. The 

Fund, for instance, has contributed to developing a stronger civil society. When 

it started working in Ethiopia one of its conditions was that CSOs should be 

involved, and two networks of service delivery NGOs and CSOs were created. 

The approach of both PEPFAR and the Global Fund has recently started to 

change in Ethiopia. The Government has been putting a lot of pressure on both 

DPs, even though it is difficult to tell who has been responsible for this change, 

given other contributing factors such as the views of other DPs and mounting 

criticism at international level. The Fund is now supporting the Health Extension 

Programme (HEP) by helping with the construction of the basic health posts in 

villages and it is also investing in laboratories and other infrastructures, which will 

have spillover effects in the health sector. 

Similarly, PEPFAR has shown signs of making a similar turn. It has started to 

implement its first Partnership Framework in Malawi, which should increase 

alignment and coordination. Other countries will soon follow. Internal 

regulations still mean that PEPFAR will remain independent to a certain extent, 

but the framework could help reduce the number of management bodies set 

up by PEPFAR as well as improve alignment with instruments such as the IHP+ 

(even though they are not signing on to it). Though only a first, it is an important 

step forward. Many more will need to follow if PEPFAR wants to contribute to 

the advancement of the AE agenda in developing countries. 

14


PEPFAR’s new Partnership Frameworks 

In July 2008, US legislation (Public Law 110-293) reauthorised US Government 

(USG) global efforts to combat HIV/AIDS, tuberculosis and malaria for 2009- 

2013. The law authorised the USG to establish compacts or framework 

documents with partner countries to promote a more sustainable approach, 

characterised by strengthened country capacity, ownership and leadership. 

This approach represents a substantially new focus for PEPFAR. 

The purpose of a Partnership Framework is to provide a five-year joint strategic 

framework for cooperation between the USG, the partner or “host” 

Government and, in some cases, other partners to combat HIV/AIDS in the host 

country through service delivery, policy reform and coordinated financial 

commitments. 

PEPFAR 30 


Major vertical donors in Ethiopia are showing positive signs of change. The 

Global Fund is making efforts to increase the impact of its activities on the 

health sector in general. PEPFAR has announced a move towards better 

alignment and harmonisation. But is still has to start implementing it. However, 

one should not expect to see a radical transformation of these donors. Internal 

regulations limit their movements and changing them will take time. 

Country ownership 

Ethiopia is a complex arena for aid processes. More than 20 donor countries 

and 20 multilateral agencies are active in the country. Reportedly, during the 

High-Level Forum between the Government of Ethiopia and the Development 

Assistance Group (the High-Level Forum is Ethiopia’s highest level annual 

meeting on development assistance), it is common to see three representatives 

from the Government sitting among over 35 DP representatives. 31 The 

Government is similarly represented all throughout the coordination chain 

described in the preceding section. 

This situation disempowers government representatives and places them in a 

weaker position when it comes to defending and sustaining their views. 

However, this seemingly weakened position is elsewhere contested. On the one 

hand, given the country’s characteristics, it is difficult for individual DPs to 

embark on large-scale projects; guarantee their continuity, and make them 

successful without coordination with other DPs and the Government. 

15


Moreover, DPs will need some success stories in 2015 – the target for the MDGs – 

and Ethiopia has made significant progress on many of the MDGs, especially 

looking at where it started. The Government is well aware of and takes 

advantage of this situation in order to strengthen its position. 32 

The Government is in fact proving to be an artful political actor. There are 

people who argue that “the Government has learnt how to play donors one 

against each other.” 33 Though this statement may not be 100% realistic, the 

truth is that it knows how to reassert and push its own agenda. In addition to 

being instrumental in guaranteeing long term continuity, it has also occasionally 

approached DPs individually to negotiate financial support for projects which 

are without secured funding from other sources. By doing so, the Government 

has managed to get a higher total amount of funding than was previously on 

the table. 34 

Accounts of ownership may vary depending on which indicator one looks at. In 

the case of Ethiopia, it seems that the Government has learned how to 

negotiate the ‘aid jungle’ and affirm its position. This can help to explain why 

despite the dramatic events following the 2005 elections, aid levels (excluding 

debt cancellation) have never stopped increasing. It is also remarkable that 

Ethiopia is one of the first countries where the Global Fund has started to 

support general infrastructure investment in the health sector and coordinate its 

work with the Government and other DPs. 

Strong government ownership has not translated into greater “democratic 

ownership” in Ethiopia. The Government has opened up some space for CSOs 

in the country’s priority development areas such as health, but it is also making 

the work of rights-based advocacy organisations very difficult (see section on 

CSOs). Similarly, Parliament is not sufficiently involved in aid processes. 


Political disagreements with the Government and different views on how to 

respond have further hampered coordination among donors. In principle, this 

situation does not seem conducive to achieving greater ownership but the 

truth is the Government is showing strong leadership in aid processes. 

Unfortunately, the same is not true of “democratic ownership”: both CSOs and 

Parliament play an insignificant role. Reinforcing the role of these actors in the 

aid process is one of the main AE challenges currently in Ethiopia. 

IHP+ 

Ethiopia and DPs signed the IHP+ Compact in August 2008. 35 Although its 

implementation is being obstructed by political disagreements, mainly about 

the new Charity Law (please refer to the next section), the result is a very good 

document, which is being implemented through a complicated political deal. 

16


The Compact is, broadly speaking, a sound and progressive piece of work in 

terms of the AE agenda. The process leading to it has involved strong ownership 

by the Government. 36 In fact, ownership has been so great that Parliament is 

never mentioned in the document and CSOs and NGOs only twice – and only 

once with any relevance. This shows that the IHP+ Compact is not in line with 

the concept of “democratic ownership” and the Accra Agenda for Action 

(AAA) commitments. In this regard, the Compact reflects the intransigent 

position of the Government towards CSOs and civil society (please refer to the 

CSOs section). 

One of the main objectives of the IHP+ is to improve alignment and 

coordination in the health sector. In the text of the IHP+ Compact, the 

Government makes very clear that the main tool to achieve this is 

implementing aid modalities managed through government systems. More 

specifically, the document puts forward the MDG Fund as the most desirable 

option, and asks DPs to progressively move from Protection of Basic Services 

(PBS) to this new instrument (PBS is a pooled fund managed by the World Bank 

and not the Government). At the time of signature, only the GAVI Alliance was 

contributing to the MDG Fund, through the Health Systems Strengthening 

component (HSS). More recently, some of the other IHP+ signatories (the World 

Bank, DFID and the World Health Organisation (WHO)) have also started to 

contribute to this fund. 

Unfortunately, the shift in aid modalities sought by the Government is not 

happening as not all DPs are willing to engage in the MDG Fund. The fund is 

managed by the MoH and some donors (i.e. the Netherlands and Sweden) 

refuse to provide funds directly to the Government for political reasons. Many 

DPs are still concerned about the Government’s response to the last elections. 

Moreover, the new Charity Law has also stirred up some controversy. This 

situation has led to a less than ideal scenario in which the World Bank has 

created an intermediate instrument, which provides “sceptical donors” with 

fiduciary checks and accountability on their contributions to the MDG Fund. 

However, it is not yet clear which DPs will use this instrument. Due to its small size, 

the MDG Fund is currently being used to cover procurement gaps. This is only 

one of the many other components of the PBS. 

Aid to the health sector is now more complex than it was before the IHP+. On 

paper, this should be a transition phase while donors phase out other 

mechanisms and start contributing to the MDG Fund. But it is in practice unlikely 

that most DPs will change their position in the short term. Furthermore, the 

potential of the MDG Fund to achieve greater alignment and coordination is 

not very clear. Contributors to the MDG Fund and the PBS are “traditional 

donors” and not Vertical Funds (VFs). It has already been mentioned that 

Ethiopia’s biggest DPs both in absolute terms and in the health sector are the 

17


Global Fund and USAID/PEPFAR. Neither has signed the IHP+ or has the 

intention to do so (though USAID/PEPFAR sent a strong letter of support for the 

IHP+). Therefore, even a full transition from the PBS to the MDG Fund would only 

affect a small share of funds going into the health sector. 

It is too early to say where the IHP+ is heading in Ethiopia. So far, DPs are not 

putting the IHP+ Compact into practice and big players are missing from the 

picture. People make different analyses of this situation. Some argue that the 

IHP+ “does not look like a very promising initiative”. 37 However, a perhaps more 

interesting analysis views the IHP+ Compact as a really good outcome given 

existing political obstacles. DPs can refuse to implement the IHP+ on the 

grounds of the Government’s attitude towards human rights and CSOs, but “if 

the situation improves in the future then DPs will have to fulfil their 

commitments”. 38 


Implementing the IHP+ will not be easy in Ethiopia. Signing the document was 

an achievement, but donors are reluctant to start delivering on their 

commitments under the IHP+. A new and restrictive charity law and the 

Government’s poor record in human rights are the main obstacles. Unless the 

Government changes its attitude, full implementation of the IHP+ seems 

unlikely. In addition, the IHP+ does not include Ethiopia’s largest donors, the 

Global Fund and PEPFAR, which constrains the outcomes of the initiative. 

Politics are part of the aid game 

ODA is not only about charity. For many years it has also been an instrument at 

the service of foreign policy. In fact, it continues to be part of a much broader 

political trade-off. Aid distribution patterns (see aid figures for Afghanistan and 

Iraq, for instance) and the significant amount of tied aid provision, clearly show 

that aid can sometimes be politically motivated. “Helping them” and “helping 

us” are not always two different motivations. When aid relationships are 

examined in this light, some of the problems in the implementation of the AE 

agenda can be more easily explained. 

At a lower level, small incidents or individual views in one country can have a 

huge impact on the other side of the world. An example from the Netherlands 

illustrates this point. The Dutch Government has always been supportive of a 

progressive aid agenda and the work of its diplomats has been instrumental in 

the IHP+ process in Ethiopia. However, despite all efforts, when it came to join 

the MDG Fund, the Ministry in Amsterdam did not give the green light. 

Apparently, the problem was that CSOs in the Netherlands concerned about 

the Ethiopian Government not being open to civil society and the new Charity 

Law put pressure on the Dutch Development Minister. 39 

18


National regulations interfering with the AE agenda are another example of 

this. The problem with USAID is the most common example, but many other 

countries also have their own procurement rules and accountability 

mechanisms. Italy, for instance, requested some recipient countries to reform 

their procurement and reporting systems so that these would fit with their own 

standards. 40 

These examples show that AE is not only about a willingness to make things 

happen in a given country but also about the donor country’s own national 

political decisions and systems. 

3. Democratic ownership 

Overview of CSOs in Ethiopia 

Compared with other African countries, Ethiopian CSOs are weak and they 

have to work in a difficult environment. During the Derg or Communist regime 

(1974-1992), CSOs were not allowed to operate. In 1994, a new constitution was 

adopted and in 1995 democratic elections were held. The Ethiopian People's 

Revolutionary Democratic Front (EPRDF), headed by Meles Zenawi, has been in 

power ever since. 

The number of CSOs working in Ethiopia has grown significantly over the last few 

years. According to the registry of the Ethiopian Ministry of Justice, the number 

of national NGOs increased from 540 to 1981 between 2004 and March 2008. 

Similarly, the number of registered religious organisations grew from 192 to 690 in 

the same period. 41 However, the increase in the number CSOs can be better by 

higher aid flows, rather than the existence of an enabling environment. 

CSOs in Ethiopia face problems of a different nature. Some are social 

constraints such as a lack of skilled workers, which fuels competition between 

donors and CSOs for the limited available human resources; and a low level of 

public awareness, which makes it difficult to mobilise the social masses in a 

country which anyway has a highly dispersed population. 

Other problems arise from internal and organisational factors. CSOs and NGOs 

in Ethiopia are not subject to a voluntary Code of Conduct, as in many other 

countries, even though there was an attempt to create one back in the 1990s. 

Moreover, the mission of some organisations is not always clear and there are 

CSOs which were created along political lines based on family ties. 42 

Coordination among CSOs working on the same issues needs to be improved 

and transparency remains an issue. 

The accounts and audits of certain CSOs are not publicly available. In addition, 

competition for funding has driven some CSOs to work in areas beyond their 

mandate or mission statement. Furthermore, the institutional link between the 

19


organisation and its constituency or beneficiaries is not always clear. These 

problems do not help build trust among DPs, the Government, and the 

Ethiopian people. This increases scepticism about the role of CSOs. 

Finally, political factors also hinder the creation of an enabling environment for 

CSOs. The Plan for Accelerated and Sustained Development to End Poverty 

(PASDEP) in Ethiopia recognises that: “the role of civil society is critical, and a 

comprehensive programme of reforms is planned under PASDEP with respect to 

the role of membership-based CSOs.” In general terms, the Government 

welcomes CSOs and NGOs working in line with government policies and 

socially sensitive issues such as childcare and HIV/AIDS. 

However, it adopts a completely different position when it comes to human 

rights and democratisation issues. At the end of July 2009, for instance, the 

Government suspended 42 NGOs for “acting out of their mandate”. It accused 

them of “reporting on human rights abuses [as] seeking to interrupt peace and 

development of the region.” 43 Recent regulations passed by the Government 

have also limited freedom of the press and the work of CSOs conducting rights- 

based advocacy. 44 

There are almost no domestic sources of funding available to CSOs and DPs 

remain the main recourse. Major funders include the Swedish CSO Cooperation 

Programme, the EC Civil Society Forum, PEFPAR, the Productive Safety Net 

Programme (PSNP) and the Global Fund. Nonetheless, among Ethiopian CSOs 

there are those who argue that donors are “placing more emphasis on 

government programmes rather than on CSOs. In some cases, like in the case 

of USAID, they prefer to work with or through American-based INGOs.” 45 

Addressing the social problems faced by CSOs can take some time but 

coordination and organisational factors could be improved in a much shorter 

time. DPs could actively help in this regard by boosting support and capacity- 

building activities among CSOs. Nonetheless, these measures require a 

favourable political environment in order to deliver real progress. Unfortunately, 

current conditions are not heartening. Among other things, the new law means 

that organisations working on human rights, for instance, could see their sources 

of funding severed. 

CSOs regulation 

Until very recently, CSOs, NGOs and other Non-State Actors (NSAs) were 

regulated by the 1960 Civil Code. This regulation dates from the time of Imperial 

Ethiopia and the rule of Haile Selassie. The nature and role of NSAs and CSOs 

has been completely transformed in the last few decades and the old code is 

clearly inadequate to regulate this area. As a consequence, there existed 

many gaps when decisions were adopted. 

20


In January 2009, the House of People’s Representatives passed a new law 

regulating charities in Ethiopia. 46 The law contains advanced regulation on 

charities’ structure, functioning, administration, accounting, etc. However, the 

law also grants broad powers for the Government to regulate CSOs. It can be 

argued that the NGO sector was in need of regulation but in the words of one 

of the interviewees: “they [the Government] have designed a sword, when 

they just need a scalpel”. 47 

The law differentiates between “Ethiopian charities and societies” and 

“Ethiopian resident charities and societies” on the basis of foreign generated 

income. Any organisation generating more than 10% of its income from foreign 

sources is immediately classified as “Ethiopian resident”. In combination with 

another of its articles, the law prevents “Ethiopian resident” organisations, as 

well as “foreign” CSOs, and “religious organisations” from conducting rights- 

based and conflict resolution advocacy and development work, and denies 

them the right to appeal to an independent court. iii The implication of this is 

that foreign-funded CSOs will only be able to work in service delivery activities, 

and the law will severely constrain fundraising opportunities for those 

organisations wishing to work in these areas. 

The Government claims that the NGO sector is deregulated and that there are 

many organisations created just to make money or with specific political 

objectives. 48 In addition, the Government argues that foreign-funded CSOs 

should not challenge Ethiopian policies. Trying to avoid foreign ideas overly 

influencing CSOs’ work and demands would not be such a bad idea if it were 

not for the lack of space and funding opportunities in Ethiopia, which stifle any 

serious initiative. 

DPs are divided about how to proceed now that the law has been passed. 

One group, which includes the Netherlands and Sweden, strongly opposes the 

law and would like the Government to review it. This was made apparent when 

they refused to join the MDG Fund. Another group (including the World Bank, 

DFID and WHO) recognises that the law has been passed by a legitimate 

government and would like to focus on next steps: the regulation governing the 

implementation of the law and the Charities and Societies Agency (CSA), 

which will be the body regulating CSOs. This group believes that the law’s 

impact will be softened if the CSA is established according to good regulations. 

If the Government decides to apply the new law with an iron fist, most CSOs 

working on human rights issues will disappear due to lack of funds. Though CSA 

regulations still have to be developed, the powers granted to the Government 

iii A comprehensive analysis of the law can be obtained from the DAG in Ethiopia. DAG- 

GTWG (2009) Technical Analysis of the “proclamation to provide for the registration and 

regulation of charities & societies (PCS) No. 621/2009” 

21


mean that it will also be able to apply pressure and eventually close any 

organisation it dislikes. As a consequence, the accountability line running 

between the Government and CSOs would be threatened. This is in clear 

contrast to the idea of “democratic ownership” and many of the principles put 

forward in the AAA. 

The role of CSOs in the health sector 

It has been mentioned before that Ethiopia does not offer an enabling 

environment for CSOs. However, organisations working in the health sector 

seem to be in a much better situation. On the one hand, health is one of the 

priority sectors for the Ethiopian Government and it is making significant efforts 

to improve it. On the other hand, organisations working in the health sector 

tend to focus on service delivery and, though they also engage in awareness- 

raising activities, their work is of a practical nature and far from the right-based 

advocacy and political activism the Government is afraid of. 

In the words of one interviewee: “The attitude of the Government towards CSOs 

operating in the health sector is extraordinary. The Government encourages 

participation of CSOs in the development and review of the health sector 

development programmes and other national frameworks.” 49 This statement is 

encouraging, especially coming from a civil society representative. But it needs 

to be understood in the context of the overall situation of CSOs in Ethiopia 

Development partners have supported and contributed to empowering CSOs 

in the health sector. The Global Fund arrived in Ethiopia on the condition that 

two networks of NGOs were created to manage a significant share of its funds: 

the Ethiopian Inter-Faith Forum for Development, Dialogue and Action 

(EIFDDA), which represents 11 national and international faith based 

organisations; 50 and the Network of Networks of HIV Positives in Ethiopia (NEP+), 

which is made up of nine regional networks, one women's network and two 

national associations, representing 380 organisations. 

Moreover, members of the Development Assistance Group (DAG) and 

Protection of Basic Services (PBS) also made their grants conditional on 

increased CSO participation. The Government conceded and these measures 

have contributed to opening up space for CSOs’ participation and 

expanding and strengthening the role of CSOs in the health sector. 

There are about 400 CSOs, NGOs and INGOs currently implementing health or 

health-related projects. 51 In general, these organisations are involved in all 

areas of healthcare and service delivery, including capacity-building. 

Approximately 330 health facilities are being managed by CSOs in the Ethiopia. 

In addition to managing DPs’ and Government programmes, it has been 

estimated that CSOs contribute about US$24 million annually to the health 

22


sector, which represents 9.8% of the annual health budget (these figures only 

reflect money in the budget and exclude DP-funded health projects). 52 


Despite being in an arguably better situation than other CSOs, the organisations 

working in the health sector still face many challenges. Access to financial 

resources and lack of capacity and trained workers feature high on the list of 

complaints. Moreover, the fact that some DPs, such as USAID, prefer to work 

with INGOs, does not help the situation. In addition, the new law still grants 

significant powers to the Government. Members of the Consortium of 

Reproductive Health Associations (CORHA) met with representatives of the 

Ministry of Justice, who stated that the law will not affect organisations in the 

health sector. 53 Still, the Government holds broad powers over CSOs, which 

contradicts the AAA and potentially limits implementation of the AE agenda. 

4. Conclusions and recommendations 

AE in Ethiopia faces significant challenges. Rapid progress in the health sector 

has not healed the wounds caused by the 2005 elections and donors are 

reluctant to make further concessions. Furthermore, the Government’s poor 

record on human rights and the new Charity Law has not helped rebuild trust 

among DPs and CSOs. The arrival of vertical donors to the health sector has 

multiplied the resources available, but it has also created further harmonisation 

and alignment problems. 

The determination of the Government and DPs to make Ethiopia a success story 

will probably help to iron out differences and we will probably see good 

progress in the near future. However, it looks like building an enabling 

environment for CSOs and recognising their role as political actors will stay a 

pending issue for the foreseeable future. The Charity Law is not a good start but 

there are still opportunities for change. Progress will need to be made one step 

at a time. 

Recommendations: 

• The Government should respect human rights and freedom of speech. 

Differences between the Government and Development Partners (DPs) in this 

regard are seriously hindering advancement in aid effectiveness. 

• Even if Vertical donors are starting to change their attitude and make progress 

in the principles of alignment and coordination,, much more efforts are needed 

to improve greater aid effectiveness 

• Continue making progress on the implementation of the aid effectiveness (AE) 

agenda in the health sector. IHP+ signatory countries should fulfil their 

commitments by backing the Government’s preferred aid delivery mechanism.. 

23


• Pursue the principle of “democratic ownership”. The role of Civil Society 

Organisations (CSOs) and Parliament in aid processes in general should be 

reinforced, especially in the health sector. 

• The Government should provide an enabling environment for Ethiopian CSOs. 

The Charity Law 

should be reformed so that it can become an instrument for CSOs’ 

development and empowerment. If no foreign funding is going to be 

allowed, then the Government should put mechanisms in place to ensure that 

CSOs will not have to stop their activities because of the new law. 

• DPs can also contribute to achieving greater “democratic ownership” by 

channelling more aid through local CSOs and Non-Governmental Organisations 

(NGOs) instead of using International Non-Governmental Organisations (INGOs). 

24


Endnotes 

1 Central Statistical Agency (2008) Summary and Statistical Report of the Population 

and Housing Census of Ethiopia. First Draft 

2 See endnote 1 

3 IMF World Economic Outlook Online Database 

4 http://hdrstats.undp.org/en/2008/countries/country_fact_sheets/cty_fs_ETH.html 

5 World Bank Development Data & Statistics online database. Available at: 

http://go.worldbank.org/1SF48T40L0 

6 OECD CRS online database 

7 MoFED (2008) Ethiopia: Progress Towards Achieving the Millennium Development 

Goals: Successes, Challenges and Prospects. Ministry of Finance and Economic 

Development, Ethiopia 

8 MoH (2007) Guidelines for Health Extension Programme. Ministry of Health, Ethiopia 

9 Argaw, H. (2007) The Health Extension Programme (HEP) of Ethiopia Summary of 

Concepts, Progress, Achievements and Challenges. WHO Ethiopia Country Office 

10 Ethiopia Health Sector Development Programme HSDP III. Mid-term Review. 

11 BBC News. Ethiopian protesters 'massacred'. 19 October 2006. 

12 European Union Election Observer Mission, Ethiopia (2006). Legislative Elections 2005: 

Final Report. Brussels, March 2006 

13 Interview with Alex O’Riordan, Aid Effectiveness Expert, Delegation of the EC. 

14 Interview with Richard Gregory, Deputy Health Adviser, DFID Ethiopia 

15 Further information available at: 

http://web.worldbank.org/external/projects/main?Projectid=P103022&Type=Financia 

l&theSitePK=40941&pagePK=64330670&menuPK=64282135&piPK=64302772 

16 Including all donors. OECD CRS online database. 

17 The 11 TWGs are: education; gender equality; governance; health, population and 

nutrition; HIV/AIDS; monitoring and evaluation taskforce, private sector development, 

trade and financial issues; public finance management and macroeconomic issues; 

rural economic development and food security; water and transport. DAG Ethiopia. 

Available at: 

http://www.dagethiopia.org/Pages/DagCommon.aspx?MenuCaption=DAG%20Stru 

cture 

18 Available at: 

http://www.dagethiopia.org/Pages/DagCommon.aspx?MenuCaption=DAG%20Stru 

cture 

19 The documents on the Education Joint Annual Review are available at: 

http://www.dagethiopia.org/Public/Publications/Final%20Report_2009_Joint%20Revie 

w%20Meeting.pdf 

20 For further discussion and examples on this see: EURODAD (2008) Turning the Tables: 

Aid and Accountability under the Paris Framework. Eurodad, Brussels. 



23 PEPFAR. Partnership to Fight HIV/AIDS in Ethiopia. Available at: 

http://www.pepfar.gov/countries/ethiopia/index.htm 

24 Global Fund. Ethiopia: portfolio of grants. Available at: 

http://www.theglobalfund.org/programs/portfolio/?countryID=ETH&lang=en 

25


25 WHO (2006) Mortality Country Fact Sheet, Ethiopia. World Health Organisation. 

Available at: http://www.who.int/whosis/mort/profiles/mort_afro_eth_ethiopia.pdf 

26 OECD CRS online database 

27 Interview with Holie Folie, Director, Consortium of Reproductive Health Associations 

(CORHA) 

28 Central Statistical Agency [Ethiopia] and ORC Macro (2006) Ethiopia Demographic 

and Health Survey 2005. Addis Ababa, Ethiopia and Calverton, Maryland, USA: 

Central Statistical Agency and ORC Macro. 

29 Interview with Hailom Bante, IHP+ National Expert 

30 Further information PEPFAR’s Partnership Frameworks available at: 

http://www.pepfar.gov/guidance/framework/index.htm 


32 Interview with Iyasu Dagmawi, P.H.C & D Technical Support Service (development 

consultancy) 

33 Ibid 

34 Interview with Marisa Traniello, Programme Manager, Procurement and Supply Chain 

Management, Clinton Foundation 

35 MoH (2008) Compact between the Government of the Federal Democratic Republic 

of Ethiopia and the Development Partners on Scaling Up For Reaching the Health 

MDGs through the Health Sector Development Programme in the framework of the 

International Health Partnership. August 2008. 




39 Interview with Dr. Theo Pas, Sector Specialist Health, HIV/AIDS, Royal Netherlands 

Embassy 

40 CONCORD (2009) Lighten the Load. In a time of crisis, European aid has never been 

more important. CONCORD, Brussels 

41 ECO (2008) Updated Mapping Study of Non State Actors in Ethiopia. Framework 

Contract Benef. Lot N° 7 Request for Services N° 2007/146027Non-state actors 


43 CIVICUS (2009) CIVICUS Condemns Suspension of NGOs in Ethiopia. Press Release, 24 

July 2009. Available at: http://www.ngopulse.org/press-release/civicus-condemnssuspension-ngos-ethiopia 

44 See the “Mass Media and Freedom of Information Proclamation” and the 

“Proclamation to provide for the registration and regulation of charities and 

societies” (PCS) No. 621/2009 

45 Interview with Dr. Meshesha Shewarega, Director, Christian Relief & Development 

Association (CRDA) 

46 Proclamation to provide for the registration and regulation of charities and societies 

(PCS) No. 621/2009 

47 Interview with Kunal Dhar, Governance Advisor, DAG Ethiopia – Governance TWG 



50 Further information on EIFDDA’s members available at: 

http://www.eifdda.org/membership.html 

26



52 Ibid 


27

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