A Plan for Accelerated and Sustained Development to End Poverty (PASDEP)
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Ethiopia: Building on Progress A Plan for Accelerated and Sustained Development to End Poverty (PASDEP) (2005/06-2009/10) Volume I: Main Text Ministry of Finance and Economic Development (MoFED) September, 2006 Addis Ababa Table of Contents Title Page No. Table of Contents i List of Tables iv List of Figures vi List of Boxes vi List of Annex Tables vi List of Acronyms vii Introduction 1 Chapter I: Progresses and Achievements Under the Sustainable Development and 3 Poverty Reduction Program (SDPRP) 1.1 Macroeconomic Performance 3 1.2 Performance of Economic and Social Sectors 6 1.2.1 Agriculture and Rural Development 6 1.2.2 Education 7 1.2.3 Health and HIV/AIDS 9 1.2.4 Water Resource Development 10 1.2.5 Roads 11 1.2.6 Telecommunications 11 1.2.7 Energy 12 1.2.8 Capacity Building and Good Governance 12 1.2.9 Industrial Development and Small-scale Employment Generation 14 1.2.10 Urban Development 15 1.2.11 Gender and Development 15 Chapter II: Trends in Growth, Well Being and Poverty 18 2.1 Background 18 2.2 The Income Dimension of Poverty 18 2.2.1 Household Consumption 19 2.2.2 Trends in Income/ Consumption Poverty Indices 21 2.3 Trends in the Non-Income Dimension of Poverty 27 2.3.1 Basic Household Characteristics 27 2.3.2 Literacy & Education 27 2.3.3 Health & Nutrition 29 2.3.4 Access to and Utilization of Selected Basic Services 31 2.4 People’s Views on Poverty and Services 33 2.4.1 Findings of the 2004/05 Ethiopian PPA 33 2.4.2 People’s Views on Poverty and Services: Consolidated Outcomes 35 of the 2005 Regional Consultations 2.4.3 People’s Views on Poverty and Services: Findings of the Citizen’s 36 Report Card 2.5 Trends in Growth and Poverty: Poverty Reduction Prospects During 38 the Period of the PASDEP i Chapter III: Taking Stock of Challenges in Accelerating Growth and Poverty 40 Reduction Chapter IV: The Objectives of the Five-Year Development Plan 44 4.1 The Basis and Rationale of the Development Plan 44 4.2 Objectives of the Development Plan 44 Chapter V: Pillar Strategies of the Five-Year Development Plan (PASDEP) 46 Chapter VI: The PASDEP Macroeconomic Framework and Growth Scenarios 57 6.1 Macroeconomic Policies, Strategies, Programs, and Targets 57 6.1.1 Real Sector 57 6.1.2 Eternal Sector 59 6.1.3 Financial Sector 59 6.1.4 Monetary Policy 61 6.1.5 Fiscal Policy 62 6.2 Alternative Macroeconomic Scenarios 63 Chapter VII: Sectoral Policies, Strategies, and Programs of the PASDEP 67 7.1 Agriculture 67 7.1.1 Overall 67 7.1.2 Fundamentals of Ethiopia's Agricultural Development Strategy 67 7.1.3 Agro-ecological Zones 69 7.1.4 Crop Production and Productivity 71 7.1.5 Coffee, Tea and Spices 75 7.1.6 Pest Management 78 7.1.7 Livestock Development and Animal Health Services 79 7.1.8 Natural Resource Conservation and Management 85 7.1.9 Agricultural Research and Extension 88 7.1.10 Food Security Program (FSP) 93 7.1.11 Agricultural Marketing 99 7.2 Education 108 7.2.1 Education Sector Policies and Strategies 108 7.2.2 Objectives and Goals of the ESDP III 109 7.3 Health 114 7.3.1 National Health Policy and Strategy Direction 115 7.4 HIV/AIDS 120 7.5 Infrastructure 127 7.5.1 Water Resources, Water Supply, and Sanitation 127 7.5.2 Roads 130 7.5.3 Power 137 7.5.4 Telecommunications 139 7.5.5 Information and Communications Technology (ICT) 141 7.5.6 Strengthening the Construction Industry 142 7.6 Tourism 143 7.7 Mining 146 7.8 Trade and Industry Development 149 ii 7.8.1 Background 149 7.8.2 Industrial Development 151 7.8.3 PASDEP Targets for Selected Strategic Sub-Sectors 152 7.8.4 Integration of Ethiopia's Export Trade 156 7.8.5 Export Development During the PASDEP 157 7.8.6 Private Sector Development 158 7.9 Urban Development 161 7.9.1 Urban Development 161 7.10 The Spatial Dimension: Regional Development Strategy and Urban- 165 Rural Linkages 7.11 Population and Development 165 7.11.1 Demographic Status 165 7.11.2 Population and Annual Growth Rate 166 7.11.3 Population Composition by Age 167 7.11.4 Linkage Between Population and Poverty 169 7.11.5 Population Policies, Strategies, and Goals 170 7.12 Gender and Development 171 7.12.1 Goals and Objectives of the National Action Plan 172 7.13 Addressing the Particular Needs of Children 175 7.14 Governance, Capacity-Building, and Decentralization 176 7.14.1 Governance 176 7.14.2 Civil Service Reform 178 7.14.3 Justice System Reform Program 181 7.14.4 Urban Governance 183 7.14.5 District Level Decentralization 184 7.14.6 ICT Development 186 7.14.7 Engineering Capacity Building 186 7.15 Environment and Development 187 7.15.1 Environment and Poverty Linkage 187 7.15.2 Environment Goals and Strategies During the Coming Ten Years 189 7.15.3 Envisioned Environmental Outcomes and Targets During the 190 Period of PASDEP 7.16 Pastoralist Livelihoods and Development 191 7.17 Youth and Employment 197 Chapter VIII: Financing the Plan 200 8.1 Medium Term Resource Envelope and Projected Overall Spending 201 (Base- Case Scenario) 8.1.1 Projecting the PASDEP Resource Envelope 201 8.1.2 Projected Expenditure Allocation 203 8.1.3 Financing Gap and Prioritization Within Sectors 207 8.2 Medium Term Resource Envelope and Projected Overall Spending 212 (High-Case Scenario) 8.2.1 Source of Revenue Projection 212 8.2.2 Projected Expenditure Allocation 213 8.2.3 Financing the Gap under the High Case Scenario 213 iii Chapter IX: Opportunities, Risks and Challenges in Implementing the PASDEP 215 9.1 Opportunities 215 9.2 Risks 217 9.3 Managing Risk: What Should be Done? 217 219 Chapter X: Monitoring and Evaluation of the PASDEP 10.1 Background 219 10.2 The Monitoring & Evaluation System of the PASDEP 219 10.2.1 The Role of the MoFED 219 10.2.2 The Role of Federal Executive Bodies 220 10.2.3 The Role of CSA 220 10.3 PASDEP Monitoring and Evaluation Policy Matrix 224 10.4 Seeking Results through Learning – A New Emphasis on 224 Evaluation Annexes 226 List of Tables Title Page No. Table 1.1: Trends in Macroeconomic Performance Growth Rates (%) 3 Table 1.2: Trends in Pro-Poor Sectors Allocated Budget out of 5 Total Government Expenditure (%) Table 1.3: Outcomes Against Selected Thematic/Sector Targets for the Period of 16 SDPRP Table 2.1: Real Annual Per Capita Consumption Expenditure at 1995/96 Constant 20 Prices (Birr) Table 2.2: Changes in Per Capita Consumption Expenditure at 1995/96 Constant 21 Prices (%) Table 2.3: Poverty Lines Used in Poverty Analysis Between 1995/96 and 2004/05 22 All Measured at 1995/96 National Average Prices Table 2.4: Trends in Total Poverty Indices at National Level and by Rural and 23 Urban Areas Table 2.5: Trends in Food Poverty Indices at National Level and by Rural and 27 Urban Areas Table 2.6: Trends in Selected Welfare Indicators Based on Successive WMSs 32 Table 5.1: Selected PASDEP Targets 55 Table 6.1: Projected Trends in the Structure of the GDP by Industrial Origin (% 64 Share in GDP) Base-Case Scenario Table 6:2: Projected Trends in Structure of GDP From the Demand Side (% Share 64 in GDP) Base-Case Scenario Table 6.3: Projected Trends in the Structure of GDP by Industrial Origin (% Share 66 in GDP) High-Case Scenario Table 7.1: Annual Plans for Cultivated Area, Productivity and production of Cereal 73 Crops Table 7.2: Annual Plan for Cultivated Area, Production and Productivity of Pulses 74 Crops Table 7.3: Annual Plans for cultivated Area, Production and Productivity of Oil 74 Seeds Crops iv Table 7.4: Annual Plans for Cultivated Area, Production and productivity of Fruits 74 and Vegetables (Cultivated with Irrigation) Table 7.5: Annual Plans for Cultivated Area, Production and Productivity of 74 Cotton Crops Table 7.6 Summary of Land To Be Covered By Crops And Production Plan 75 (2003/04 – 2008/09) Table 7.7: Plan for the Development and Production of Coffee, Tea and Spices 76 Table 7.8: Annual Targets for Agriculture Input Supply /Marketing 77 Table 7.9: Annual Targets for Livestock Production for the PASDEP Period 84 Table 7.10: Targets Set to Improve Productivity of the Livestock Sub sector 85 Table 7.11: Annual Targets for Agricultural Extension Services 89 Table 7.12: Annual Regional Resettlement Targets of the Food Security Program 99 Table 7.13: Summary of Annual PASDEP Targets for Agricultural Export Products 102 Table 7.14: Annual Targets for Export of Agricultural Products During the Period of 103 the PASDEP Table 7.15: Annual Targets for Export Earnings From Agricultural Products During 104 the Period of the PASDEP Table 7.16: Annual Targets During the Period of the PASDEP for Primary 110 Education Table 7.17: Selected Intermediate Management-Related Targets 118 Table 7.18: Selected output Targets under PASDEP 119 Table 7.19 Highlights of HIV/AIDS and Maternal Health Care Service Goals 119 Table 7.20: HIV/AIDS Major Targets for the PASDEP Period 126 Table 7.21: HIV/AIDS Targets for the PASDEP Period by Major Output 126 Table 7.22: Water Supply Indicators and Targets for the PASDEP Period 129 Table 7.23: Selected Telecommunications Targets under PASDEP 140 Table 7.24: Mining PASDEP Targets 149 Table 7.25: Shoe Production Targets 153 Table 7.26: Leather and Leather Products Production Targets 153 Table 7.27: Leather Goods Production Targets 153 Table 7.28: Production Capacity of Existing Sugar Factories 154 Table 7.29: New Factories to be Commissioned During the PASDEP Period 155 Table 7:30: Ethiopia's Demographic Situation Compared to the World 166 Table 7.31: PASDEP Goals and Target for Population 168 Table 8.1: Projected PASDEP Program Cost Requirements Based on the MDGs 204 Needs Assessment (In Million Birr) Table 8.2: Indicative Program Costs Within the MEFF Framework for Poverty- 206 oriented Sectors Under Base-Case Table 8.3: Projected Resource Envelope and Broad MEFF Parameters Under the 209 Base-Case Scenario (In Million Birr) Table 8.4: Projected Resource Envelope and Broad MEFF Parameters Under the 214 High-Case Scenario (In Million Birr) v List of Figures Title Page No.