ET-PRSC 2 DPL (FY05)

closed

The Country Assistance Strategy (CAS) noted that the initial country conditions for commencing use of a Programmatic financing instrument such as the Poverty Reduction Support Operations (PRSC) were strong. First, the Poverty Reduction Strategy Paper (PRSP) process is sound with a strategy that is appropriate in terms of both growth and poverty reduction impact, grounded in the MDGs, backed by strong country-ownership, and a credible implementation process. Second, the budget process is credible, with continuous efforts underway to improve the predictability of resource flows to sub-national levels responsible for primary service delivery and reduce the reporting lags on actual expenditures. Third, although decentralization has placed strains on the public financial management system, fiduciary performance is acceptable and measures are being implemented to address identified weaknesses. Fourth, the Bank and other partners have supported a strong analytical program in Ethiopia involving several Public Expenditure Reviews (PERs), a Country Financial Accountability Assessment (CFAA), Country Procurement Assessment Report (CPAR), Risk and Vulnerability Assessment, poverty analyses, diagnostics in various sectors, etc. which identified key development constraints which are at the heart of the Sustainable Development and Poverty Reduction Program's (SDPRP's) reform program.