2016年-世界发展银行全球_Ethiopia_Public_Expenditure_Review_166页_4mb

Ethiopia Public Expenditure Review 2015 Summary

Core Content

The Ethiopia Public Expenditure Review (PER) 2015 is a comprehensive analysis of the country's fiscal framework and public spending efficiency and equity across key sectors. It was conducted in collaboration with the Ethiopian government and aims to support policy reforms and improved public service delivery.

Main Objectives

• To analyze recent fiscal developments in Ethiopia in the context of a broad infrastructure investment program for growth and poverty reduction.
• To assess the equity and efficiency of public spending in four priority sectors: health, social protection, education, and water and sanitation.
• To provide insights and recommendations for improving fiscal sustainability, public service delivery, and resource allocation.

Key Findings

1. Aggregate Fiscal Position

• Ethiopia has seen a gradual fiscal contraction in general government spending as a share of GDP, declining from 24.2% in 2003/04 to 17.7% in 2013/14.
• There has been a shift from recurrent to capital expenditure, with capital spending increasing to 4% of GDP, now at par with education.
• Woreda-level spending accounts for 4% of GDP, mainly wages and salaries in the education sector.
• Tax-to-GDP ratio is low compared to regional peers, and revenue mobilization needs to be strengthened to support the transition from external aid to domestic taxation.
• External grants and non-tax revenue have declined, highlighting the need for domestic revenue reforms.
• Tax administration improvements are evident, but tax base broadening and rate review are essential to enhance fiscal capacity.

2. Health Sector

• Health expenditure increased to about US$21 per capita, but remains among the lowest in the region.
• The health system includes a three-tier structure (central, regional, and woreda levels).
• Efficiency of health expenditure is higher than regional peers, indicating effective use of resources.
• Equity in health service access is uneven, with lower-income groups underutilizing services due to financial constraints.
• Health Extension Program (HEP) has been a key contributor to improved health outcomes.
• Universal Health Coverage (UHC) is a priority for future reforms.

3. Social Protection

• Social protection expenditure is about 3% of GDP, primarily through safety net programs, subsidies, and social insurance.
• Productive Safety Net Program (PSNP) is the largest program, covering 30% of the absolute poor nationally.
• Safety net programs are pro-poor and progressive, contributing to a 2% reduction in poverty.
• Subsidy reform is necessary to create fiscal space for expanding social protection programs.
• Non-tax revenue and external assistance are the main sources of funding for social safety nets.

4. Water and Sanitation

• Water and sanitation (WSS) expenditure increased from 0.4% to 0.7% of GDP, or about US$2 per capita.
• The sector is heavily capital-oriented, with 80% of total spending allocated to capital projects.
• Urban-rural service gap is significant, with underfunded operations and maintenance (O&M) leading to non-functional rural WSS schemes.
• Regional governments primarily finance WSS, with local revenue being a key source.
• Expansion of access to water and sanitation has been notable, especially in rural areas.

5. Education Sector

• Education expenditure remains stable at about 4% of GDP and 20% of total expenditure.
• Enrolment trends show progress, but disparities in access and outcomes exist between and within regions.
• Higher education receives a larger share of the budget, while primary education is underfunded.
• Recurrent expenditure is skewed towards salaries, with per-pupil recurrent costs being relatively low.
• Equity in education financing is lacking, with low-income households underrepresented in higher education.
• Private education is more affordable for secondary levels, but public education benefits lower-income groups more.
• Learning outcomes are uneven, with rural areas lagging behind urban ones.

Key Recommendations

• Strengthen domestic revenue mobilization by broadening the tax base and improving tax administration.
• Enhance tax reforms to increase revenue and support fiscal sustainability.
• Improve operational efficiency in public services, especially in health and water and sanitation.
• Ensure balanced funding between capital and recurrent expenditures to sustain service delivery.
• Promote equity in education by increasing support for primary and secondary education, especially in rural and low-income areas.
• Expand social protection programs through subsidy reform and increased domestic financing.
• Strengthen monitoring and evaluation of public expenditure to ensure effective use of resources.

Main Sectors and Their Fiscal Roles

Supporting Initiatives

• BOOST database was established to provide detailed expenditure data at line item level for general government.
• The initiative aims to improve transparency, accountability, and decision-making through better access to budget data.
• The review is part of a global effort to use public expenditure data in accessible formats for policy analysis.

Conclusion

The PER 2015 highlights the need for fiscal sustainability, equity in public spending, and efficiency improvements in Ethiopia's public services. As the country moves towards middle-income status, domestic revenue mobilization and tax reform are critical to support continued growth and service delivery. The review also underscores the importance of targeted social protection and balanced investment in infrastructure and services.