World Bank aims to increase Ethiopia's economic development

The World Bank and the Government of Ethiopia have launched a US$150 million Urban Local Government Development Project that aims to support Ethiopian cities' efforts to improve performance in the planning, delivery and sustained provision of priority municipal services and infrastructure.

Using the World Bank's Performance Grants scheme the project will provide incentives to cities to improve their performance in key areas related to planning, citizens' participation in the planning process, financial management and service delivery.

It will also enable cities to invest in critical municipal infrastructure such as roads, drainage, sewerage, market places, etc.

Commenting on the project World Bank country director for Ethiopia Mr. Kenichi Ohashi said, "The number of urban dwellers in Ethiopia has shown a tremendous increase. Accordingly, cities should execute development activities aiming at meeting the needs of their dwellers."

The project is part of Ethiopia's ongoing urban reform agenda directed toward improving the operations of urban local governments.

The Performance Grant scheme has been designed as a grant transfer mechanism and is fully integrated within the intergovernmental fiscal framework.

International Development Association funding will be provided to the cities as a grant, and regions and the participating cities are required to contribute a total of 40 percent of the grant amount to the project. This is expected to add to the sustainability of the transfer mechanism as well as ensure that investment decisions are made carefully.

For participating cities, the expected outcomes of the project are:

cities will plan capital investments based on service delivery priorities identified by citizens;

cities will improve the management of their finances, increase their revenues, and more effectively operate and maintain their infrastructure assets;

cities will be more transparent and disseminate relevant information to the public regarding budgets and investments;

and cities will effectively implement capital investments.

Some 19 towns in the four main Regional States, Addis Ababa, Wiredraw and Harare cities will benefit from the five-year project coordinated and managed by the Ministry of Works and Urban Development (MWUD) and implemented by the respective urban local governments with support from the Regions.