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Ethiopia.Qxd 5/3/06 12:39 PM Page 1 CWRAS_Tmplt_Ethiopia.qxd 5/3/06 12:39 PM Page 1 COUNTRY WATER RESOURCES ASSISTANCE STRATEGY COUNTR Ethiopia Y W A Managing Water Resources TER RESOUR to Maximize Sustainable Growth CES ASSIST ANCE STR A TEGY ETHIOP IA AFTU1 Africa Water and Urban 1 The World Bank 1818 H Street NW Washington, DC 20433 www.worldbank.org REPORT NO. 36000-ET Ethiopia: Managing Water Resources to Maximize Sustainable Growth A World Bank Water Resources Assistance Strategy for Ethiopia THE WORLD BANK AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT © 2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org/rural E-mail [email protected] All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accu- racy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Contents ACRONYMS AND ABBREVIATIONS vii EXECUTIVE SUMMARY xi ACKNOWLEDGMENTS xi 1 Introduction 1 2 Ethiopia’s Water Resources 3 Resource 3 Hydrological Variability: Extremes of Drought and Flood 8 Interrelated Effects on Natural Resources and the Environment 12 Hydrological Variability: Endemism and Expectations 13 International Waters: Tensions and Opportunities 13 3 Water Resources and Key Economic Sectors 15 Water Supply and Sanitation 15 Agriculture, Livestock, and Fisheries 19 Transportaion and Market Infrastructure 23 Energy and Hydropower 27 Urban, Manufacturing, and Services 28 Food Aid 31 4 Water Resources Challenges: Some Priority Responses 33 Strengthening Water Resources Development and Management 33 Enhancing Economic Resilience 37 iii iv Contents 5 A Hydro-Economic Model of Ethiopia: A Summary of Findings 41 Variations of the Model 41 Impacts on Growth and Poverty 42 Investment Scenarios 44 Irrigation Investment Scenario 45 Comparison of Investment Scenarios Using the Historical Variability Model 49 Baseline Scenario 49 Irrigation Investment Scenario 49 Multipurpose Development 52 6 Water Resources and Growth 53 Water Security and the Minimum Platform of Water Infrastructure and Institutions 53 The Challenge of Achieving Water Security 54 Economic Structure and Resilience 55 The Dynamics of Institutions and Infrastructure 56 7 Insights for Interventions 59 Lessons 60 Implications for Interventions 62 8 A Water Resources Assistance Strategy for the World Bank 63 Ethiopia’s Water Sector Strategy (2001) 63 World Bank Assistance in Ethiopia 64 A Strategy for World Bank Support in Water Resources 66 Appendix 1. Technical Notes on the Model 71 Appendix 2. Water-Related Programs in Ethiopia 75 Appendix 3.World Bank Projects in Ethiopia 81 Endnotes 87 References 89 Contents v Tables 2.1. Mean Annual Rainfall and Coefficients of Variation in Selected Drought-Prone and Non-Drought-Prone Areas (1980–2001) 7 2.2. Trends in Rainfall Variability 1970–2001 9 2.3. A Chronology of Ethiopian Drought and Famines Since 1895 10 2.4. Drought- and Disaster-Affected Populations 11 3.1. Population Distribution by Settlement Size 17 3.2. Access to Water Supply and Sanitation 18 3.3. Sectoral Shares of GDP (Percentages) 19 3.4. Road Passability 24 3.5. Percentage of Reported Defects in Paved Roads 26 3.6. Percentage of Reported Defects in Unpaved Roads 26 3.7. High-Cost Scenario Road Investment Targets to 2015 27 3.8. Ongoing and Planned Hydropower Projects 29 5.1. GDP Growth Rates Under Differing Investment Scenarios 45 5.2. Poverty Rates Under Differing Investment Scenarios 45 5.3. Agricultural Production and Irrigation Returns Under the Combined Investment Scenario, Smoothed Rainfall Variant 47 5.4. Baseline Scenario (No Investments) With Historical Variability 49 5.5. Irrigation Investment Scenario, Historical Variability Model 50 5.6. GDP Growth Rates, Market Infrastructure Investment Scenario, Historical Variability Model 51 5.7. Poverty Rates Under the Market Infrastructure Investment Scenario 51 5.8. Impacts of the Market Infrastructure Investment Scenario, Historical Variability Model 51 5.9. Impacts of the Combined Market Infrastructure and Irrigation Investment Scenario, Historical Variability Model 52 8.1. Ongoing International Assistance to the Water Sector in Ethiopia 65 8.2. World Bank Portfolio Distribution by Major Sectors, FY2005 66 Figures ES.1. Rainfall Variability: National, Tigray, and Arsi xiii ES.2. Rainfall Variation Around the Mean and GDP Growth xvi ES.3. Water Storage Per Capital in Selected Countries xvii ES.4. Water Infrastructure xviii ES.5. Effects of Hydrology on GDP Growth xix ES.6. Effects of Hydrology on Poverty Rates xx ES.8. GDP Growth With Variable Rainfall and Different Investment Scenarios xxi ES.7. Growth Rates With Smoothed Rainfall and Different Investment Scenarios xxi 2.1 Surface Runoff from Ethiopia’s Major River Basins 6 2.2 Rainfall Variability: National, Tigray, and Arsi 8 3.1 Access to Water Supply: Millennium Development Goals 17 3.2 Rainfall Variation Around the Mean and GDP Growth 20 3.3 District Mean Annual Surplus Flow Versus District Mean Percent of Water-Related Maintenance Cost 26 vi Contents 4.1 Water Storage Per Capital in Selected Countries 35 5.2 Effects of Hydrology on Poverty Rates 43 5.1 Effects of Hydrology on GDP Growth 43 5.4 Projected Poverty Rates Using Smoothed Rainfall and Variable Rainfall Means 44 5.3 Projected Log GDP Using Smoothed Rainfall and Variable Rainfall Means and Variable Rainfall Ensemble 44 5.6 GDP Growth With Variable Rainfall and Different Investment Scenarios 48 5.5 Growth Rates With Smoothed Rainfall and Different Investment Scenarios 48 6.1 Balancing and Sequencing Investments in Water Infrastructure and Management 57 Box 3.1. Weak Regulation of Competing Consumptive Uses in Harar 16 Maps 2.1. Ethiopia Water Resources Country Assistance Strategy 4 2.2. Ethiopia Water Resources Country Assistance Strategy: Major River Basins 5 3.1. Ethiopia Water Resources Country Assistance Strategy: Hydropower and Transport Infrastructure 25 Acronyms and Abbreviations CAS Country Assistance Strategy CEM Country Economic Memorandum CWRAS Country Water Resources Assistance Strategy ERA Ethiopian Road Authority GDP gross domestic product GoE Government of Ethiopia ha hectares IDP Irrigation Development Program MoWR Ministry of Water Resources NBI Nile Basin Initiative SDPRP Sustainable Development and Poverty Reduction Program SNNP Southern Nations, Nationalities, and Peoples’ regional states vii Acknowledgments Many people contributed to the preparation of this strategy. The core team was led by Claudia Sadoff (ARD) and included Catherine Revels (EWDSA); Yitbarek Tessema (AFTU1); Mekuria Tafesse (con- sultant); Mulat Demeke (Addis Ababa University, consultant); Peter McCornick (IWMI); Mark Rosegrant, Sherman Robinson, Xinshen Diao, Ken Strzepek, Paul Block, and Charles Rogers (IFPRI); Martha Solomon (Ministry of Water Resources, Ethiopia), and Tadesse Kuma (Ethiopia Development Research Institute). David Grey (AFTNL) provided advice and guidance to the core team through- out this work. Aziz Bouzaher (AFTS1) and Maher Abu-Taleb (MNSRE) contributed significantly as peer reviewers. Guidance was provided by H.E. Minster Shiferaw Jarso (Ministry of Water Resources, Ethiopia), H.E. Minister Sufian Ahmed (Ministry of Finance and Economic Development), H.E. Neway Gebreab (Senior Economic Advisor to the Prime Minister), Ishac Diwan (Country Director, World Bank), Jaime Biderman (Sector Manager, World Bank), and Jill Armstrong (Country Manager, World Bank.) Important contributions were also made by IJsbrand de Jong, Madhur Gautam (AFTS2), Reynold Duncan (MNSIF), E. V. Jagannathan (SASAR), Andrew Macoun, Barbara Miller, Ashok Subramanian (AFTNL), Inger Andersen (MNSRE), Gebreselassie Okubagzhi (AFTH3), Gemechu Ayana (Ethiopia Development Research Institute), and Demile Yismaw (Ministry of Finance and Economic Development, Ethiopia). Editorial services were provided by Mary Paden (consultant) and administrative support by Aijaz Ahmad (AFTU1). Finally, the team would like to acknowledge the input of more than 100 stakeholders from federal and regional governments, uni- versities, research institutes, development partners, the private sec- tor, civil society, and nongovernmental organizations,
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