Italian development aid in brief

1. Background and main reasons for the presence of Italian Cooperation

Development cooperation relations between Italy and Ethiopia started in 1976, when the first bilateral agreement for the implementation of development projects was signed. From the second half of the eighties, Ethiopia has been one of the priority countries in the Italian Cooperation strategy and it has benefited from a significant proportion of the Italian support, mainly through the bilateral and multi-bilateral channel, but also through multilateral and NGO-promoted programmes. Over the past 30 years, Italy contributed with a total amount of nearly 800 million Euros to Ethiopia’s development.

The Italian commitment can be easily understood in the light of historical and economic links that bind our country to Ethiopia, as well as the strategic importance of the country in the geopolitics of the Horn of Africa and the relevant role played in the stabilization of the region.

On May 30, 2013, on the occasion of the visit of Vice Minister of Foreign Affairs of Italy, H.E. Mr Lapo Pistelli, the new Country Programme 2013-2015 was signed, with programmed interventions worth 98.9 million Euros (funds have more than doubled compared to the previous Country Programme), especially in the areas of rural development, education and health. Finally, negotiations for the conclusion of the new Cooperation Framework Agreement, which will define the terms and procedures of cooperation between the two countries, are in the finalizing process.

2. Other international donors, coordination and opportunities of division of labor, joint evaluation exercises (Harmonization)

Excellent dialogue and cooperation has been estabilished between donors in Ethiopia. Since 2004, the main venue for discussion between donors in the country is the DAG (Development Assistance Group). Italy (along with other donors, bilateral and multilateral) actively participates in it, holding also the Presidency chair in different working groups, in order to share information and strategies to improve the effectiveness of development cooperation initiatives. Finally, the impetus of the EU Delegation in the country, the European donors have started a process of Division of Labor and Joint Programming, with our country participating in the forefront.

The DAG comprises 26 bilateral and multilateral development agencies. Created in 2001 with the aim of enhancing efficiency in aid delivery and development of the policy dialogue with Ethiopia, it is coordinated by two co-chairs (one multilateral – the African Development Bank - and one bilateral – the Netherlands -) that are supported by an Executive Committee of 7 members (Italy, UK, USA, Canada, World Bank, EU, UNDP). Co-chair and Executive Committe are elected and hold office for 2 years. Italy, by the end of 2012, sits for the first time in the Executive Committee.

Despite lower financial resources than other donors, the main objective is that of working with high quality standards and partecipating and integrating into the coordination mechanisms already functioning in the country.

Italian development cooperation has been assuming a very active role in the European Joint Programming strategy and has promoted the birth of the working group of donors (coordinated together with the World Bank with a senior economist), which analyzes and dialogues on the implementation and on the results of the Growth and Transformation Plan (GTP) and on the macro-economic situtation of the country. Italy is also the only bilateral donor to be part of the group on Aid effectiveness, together with EU, UNDP, World Bank and African Bank of Development.

3. Other expressions of the Italian Cooperation System in the country (NGOs, universities, local authorities, private sector) and strategies for their involvement

Italian development cooperation has a longstanding collaboration with several italian ONGs working in the country. Among these, CCM – Comitato di Collaborazione Medica, CIAI - Centro Italiano Aiuti all’Infanzia, CISS - Cooperazione Internazionale Sud-Sud, COOPI - Cooperazione Internazionale, CVM - Comunità Volontari per il Mondo, PC - Progetto Continenti, LVIA - Lay Volunteers, CUAMM - Medici con l’Africa, CISP - Comitato Internazionale per lo Sviluppo dei Popoli, Fondazione Rita Levi Montalcini, Cifa Onlus, ENZO B, VIS - Volontariato Internazionale per lo Sviluppo.

Italian business is also traditionally deep-rooted in Ethiopia, as witnessed by the existence, in Addis Ababa of an Association (IBCA, Italian Business Community Association), which brings together about 65 entrepreneurs, including some foreigners who have dealings with Italy. Italian operators living in Ethiopia, engaged in small and medium-sized enterprises, are over 200 and operate mainly in the following areas: trade, construction, mechanical workshops, electro-mechanical, engineering, footwear, leather, tourism, automotive components, printers, carpenters, caterers, plastics, agriculture and livestock. The main Italian companies operating in Ethiopia are: IVECO, present in the country with a joint venture between Fiat and the Ethiopian Government, called AMCE (Automotive Manufacturing Company of Ethiopia), SALINI Costruzioni, SIEMENS ITALY and SELEX.

To draft the Country Programme document, the Embassy / UTL in Addis Ababa has actively involved all the actors of the Italian Cooperation in Ethiopia, with a wide participation of non-governmental organizations, institutions of decentralized cooperation, businesses, trade associations in Ethiopia or interested in the country, trying to share views and common intervention frameworks.

In this perspective, a meeting was convened in Rome on November, 21st 2012, which saw the active participation of over 40 participants, mainly from the civil society, businesses and territorial cooperation, but also by the central government of the State, especially the Ministry of Foreign Affairs, the structure of the Minister of international Cooperation and Integration, the Ministry of Economy and Finance, the Ministry of Health. Among others, the significant presence of the Autonomous Province of Bolzano (one of the main actors of decentralized cooperation in Ethiopia), Confindustria, CGIL and Illy Caffè. This event was followed by a coordination meeting in Addis Ababa with the partners working on site, on November 29th, 2012.

The involvement of all relevant stakeholders has not been limited to the drafting phase of the new Country Programme but also to the design of foreseen initiatives. A stakeholder mapping based on sectors and areas criteria has been carried out and on its basis everyone could contribute to the formulation of each initiative. This approach not only makes easier and more effective the exchange of experiences and knowledge, but also allows to promote a unified vision of the various Italian presences and contributions to Ethiopia.

4. General objectives of the Italian cooperation in the country, sharing with counterparts and consistency with international guidelines on aid effectiveness

The new Country Programme 2013-2015 is in line with the Ethiopian Government Programme (Growth and Trasformation Plan - GTP), which represents the strategic mid-term document, and is the result of the first European Joint Programming exercise between European member states and Norway. It has been drafted in order to match the Millennium Development Goals (MDG) and in line with Paris/Accra principles.

The Growth and Transformation Plan (GTP) follows the 5 years Plan for Accelerated and Sustainable Development to End Poverty – referred to 2005/06-2009/10, and reflects the Government’s will to place Ethiopia among mid-income world economies, by developing a modern agriculture and a dynamic industrial sector.

The objectives identified are very ambitious and they include maintaining annual growth on rates between 11% and 14%, matching the Millennium Development Goals (MDG) and building up stable and democratic Institutions, oriented to sustainable development.

Apart from investments in the agricultural and industrial sectors, the Ethiopian Government aims to consolidate infrastructures (transport and energy), increasing the availability and quality of basic services (education and health) and improve the public administration system (governance and justice).

UNDP has given a substantially positive assessment on the progress of Ethiopia in relation to the Millennium Development Goals: the country has in fact seen significant progress in the social sectors (education and health), while much work remains to be done in order to achieve the objectives related to gender equality, environment and integration in the global market.

The EU+ Joint Cooperation Strategy, signed in Addis Abeba on January 17, 2013, is a document that sets the steps for an exercise of Joint Programming that will ensure a coherent and cohesive EU+ response, to improve alignment, harmonization, results-based approach, predictability and transparency, whilst avoiding overlapping or unduly fragmented interventions through a locally defined division of labour process. The JCS has therefore become part of the Country Programme, which is thus fully aligned with the European analysis and strategy in Ethiopia.

Following the recent developments related to the Italian commitment in favor of the "New Alliance for Food Security and Nutrition", launched at the G8 summit in Camp David on May 18th, 2012, it was decided that the new Country Programme should commit itself to the development of the agricultural sector, with a particular focus on small farmers, strengthening the production chains and the creation of a favorable environment for private investment.

The participation of the Italian Government to the New Alliance Initiative (for Ethiopia), launched in 2012 by the US under their G8 Presidency, was decided also under the consideration that it was perfectly aligned with other commitments and reflections already undertaken.

5. Sectors of intervention and expected results

Italian Development Cooperation in Ethiopia has been regulated by a Country Programme (2009-2011), close to finalization, amounting to 49.3 million Euros (main sectors: health, education, WASH and rural development).

With the New Country Programme 2013-2015, signed in Addis Ababa on May 30th, 2013, Italy intends to fund programs for a total of 99 million Euros: 65 million Euros in soft loans and about 34 million in grants. This does not include expenses for technical assistance, coordination and monitoring initiatives by the Italian Cooperation.

The resources will be divided into the following main areas: rural development and private sector 48.2 million; health and basic services 23.8 million; education and gender 8.4 million; WASH 18.5 mln in order to improve the resilience of drought – affected pastoral areas in six districts of the Afar Region; to provide access to water to an estimated 250,000 urban population; to contribute to the improvement of learning conditions in primary and secondary schools and to the institutional strengthening in order to support enhancement of learning outcomes throughout the Country; to contribute to the improvement of the quality and coverage of the basic health services thus contributing to improving the population’s health conditions. In consideration of the limited financial resources, the new Country Programme includes a significant soft loan component, with particularly advantageous terms (grace period of 30 years, concessionality level of 70%).

Many interventions planned to be covered by soft loans regard rural development and the private sector, also due to the recent Italian commitment in favor of the "New Alliance for Food Security and Nutrition", with a particular focus on small farmers, strengthening the production chains and the creation of a favorable environment for private investment.

Another important area of intervention covers basic services, mainly health (especially maternal and child health), water, with a significant investment program for the water supply of medium-sized cities (WASH in Small and Medium Towns), and education, by participating to a pooled fund along with the United Kingdom, Finland, the United States and the World Bank.

As for the implementing mechanisms, the new Country Programme will be implemented through bilateral programs (with funds directly managed by both the Ethiopian government or the Italian Development Cooperation), multilateral programs (through UN agencies like FAO, UNIDO, World Bank, IFC) and contributions to pooled funds with other international donors (bilateral and multilateral).

The importance of monitoring and evaluating results to improve transparency and accountability is crucial for the Italian Development Cooperation. Italy also intends to align its efforts with those of the European partners to create a common framework of tools for the analysis and evaluation of results. Also given to its continuous and deep-rooted presence in Ethiopia, Italy is committed to align and coordinate its efforts with those of the European partners, also with the aim to create a common framework of tools for the analysis and evaluation of results, in view of future actions. The Ethio-Italian Cooperation Framework 2013-2015 will be implemented according to the principles of transparency and accountability by both Ethiopian and Italian governments.

Information on the budget and financial commitments arising from the new cooperation program will be made accessible to the public, as well as updates on the activities carried out by the Italian Development Cooperation in Ethiopia, through all means of communication. The dialogue with civil society will continue to be encouraged also through the media and social networks.