The largest aid (2.5 billion Br) from the UK government for the 2008/2009 fiscal years will be provided to Ethiopia through the Protection of Basic Services (PBS), a programme adopted in the aftermath of the May 2005 electoral crisis. While their colleagues at the World Bank are contemplating resuming Country Assistance Strategy, which is basically a Direct Budget Support (DBS), executives at the Department for International Development (DFID), a UK government department responsible for leading the government’s fight against world poverty, have chosen the PBS for the third consecutive year.

This has to do with the good governance issue which they advised the government to improve on, but have not found it enough to resume their pre- 2005 DBS programme.

“We would like to see further progress in governance before we resume the DBS programme,” Norma Ling, UK ambassador to Ethiopia told reporters in his office on May 7, 2008. “There are areas that need improvement.”

Nonetheless, the aid Ethiopia receives from the UK has significantly increased from about 180 million Br to 2.5 billion Br over the last six years, which will make Ethiopia the UK’s largest programme in any African country.

The PBS is a programme that is supporting Ethiopia’s national poverty reduction strategy, the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). PBS, largely financed by the DFID, provides money to supplement the government’s own spending on services that directly improve the quality of ordinary citizens’ lives such as health, education, safe water and sanitation and agriculture. PBS is also helping to make local government more accountable to citizens, for instance, by making budget information available and understandable to ordinary people. The programme also helps citizens get involved in decision-making service delivery, according to its advocators.

This does not mean that the UK believes there are no improvements in governance. The country believes Ethiopia has shown some improvement in governance and is assisting the country’s continuous efforts.

In the last four years, the DFID has granted close to 281 million Br to reforming the public sector, including the civil service and the judiciary, to make local government services more responsive to citizens’ needs.
 

Moreover, the development partner also has provided Ethiopia 1.6 billion Br for the national Productive Safety Net Programme, which is helping around eight million chronically hungry people - those who cannot get enough to eat at any time, even if rains and circumstances are normal. DFID has also approved around 1.4 billion Br for a major water sanitation and hygiene programme which would improve the water supply infrastructure and promote better sanitation in homes, schools and health centres.
 

The UK Minister for International Development, Shriti Vadera, also visited Ethiopia from November 19-22 last year, and announced a new 75 million pound grant for water, sanitation and hygiene projects.

What has satisfied the UK government is Ethiopia’s attempts to tackle poverty, and the subsequent economic growth.
 

“Ethiopia has seen impressive progress since 2000. Economic growth has exceeded 10pc for the last four years. Poverty levels have been reduced from 46pc to 39pc between 1995/1996 and 2004/2005,” said Paul Ackroyd, head of DFID Ethiopia. ”We are seeing good progress in key poverty indicators from a very low base.”

According to the department, 2.6 million more children went to primary school in 2006/2007 than in 2004/2005. A little over half of the population has access to clean water, up from 19pc in 1996, and the number of health extension workers has risen almost tenfold to more than 24,000 since 2004/2005.

“This is very good progress,” said Mr. Ackroyd
 

Ethiopia is the second most populous country in Africa, with a population of about 80 million people. Ethiopia ranked 169 out of 177 countries in the 2007 United Nations Human Development Report.

Poverty in Ethiopia affects the majority of the population: over 60 million (81pc) live below a poverty datum line of two dollars a day; 31 million (41pc) live on less than half a dollar a day; each year, around 10 million people are at risk of starvation.

By MICHAEL CHEBUD

FORTUNE STAFF WRITER