WASHINGTON, March 14, 2018—The World Bank today approved $600 million of the International Development Association (IDA)* financing to help strengthen the capacity and performance of local urban governments, expand sustainable urban infrastructure and services, as well as promote local economic development in cities across Ethiopia.
Ethiopia is one of the fastest urbanizing countries in Sub-Saharan Africa, with the urban population growing at 3.8 percent a year. Rapid urbanization poses challenges as cities struggle to provide infrastructure, services, and jobs. Since the early 2000s, the World Bank has been helping Ethiopia to address these challenges and foster smart urbanization including through the Urban Local Government Development Program (ULGDP). The program which has played a key role in improving the institutional performance of local governments is also the foundation upon which the new Urban Institutional and Infrastructure Development Program(UIIDP) is built.
“While the new investment builds upon the successes of ULGDP it also incorporates important lessons learned and introduces a new approach. This new approach will help Ethiopia to develop a strategy for sustainably financing urban development,” said Carolyn Turk, World Bank Country Director for Ethiopia.
UIIDP will scale up activities initiated under ULGDP to support 73 new cities—for a total of 117—across nine regional states and benefit more than 6.6 million Ethiopians. The UIIDP envisions that all cities will in the long term generate increasing levels of own-source revenues, with which to finance investments in infrastructure and deliver services.
“To successfully manage urbanization and deliver on their evolving mandates, cities are likely to require fiscal transfers for the foreseeable future. This program will help cities to realize their revenue potential,” said Abebaw Alemayehu, World Bank Task Team Leader for the Project.
The UIIDP is aligned with the government’s Second Growth and Transformation Program, and with the strategies of policies of the Ministry of Urban Development and Housing’s, the Ethiopian Cities Sustainable Prosperity Goals for 2015/2016–2024/2025: Building Green, Resilient and Well Governed Cities, and the National Urban Development Spatial Plan. By assisting to create well-functioning and productive urban centers, the UIIDP contributes to the World Bank’s twin goals of ending extreme poverty and boosting shared prosperity.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.