Ethiopia

Local Responsibilities and Public Services in Ethiopia: An Introduction

Zemelak Ayele, CFGS – Centre for Federalism and Governance Studies, Addis Ababa University

Studies show that it is imperative that the functional competences of local government in the areas of service delivery are suitable and clearly defined in a constitution or statutory documents. The responsibilities should be suitable in a sense that they should be within the financial and human capacity of local government lest it should be overburdened with complex responsibilities that are beyond its capacity.^[1] Subsidiarity is seen as the best approach in terms of determining the suitability of a certain functional area to local government.

It is important to define local government’s responsibilities preferably in a national constitution or other legislative document.^[2] This helps counter any temptation form the central government to centralize local government responsibilities. Moreover, studies suggest that the definition of the competences of local government should be clear but not be not too detailed lest senior levels of government should prescribe what local government should do in the name of defining their competences thereby compromising their autonomy.^[3] Clearly defining local government’s responsibilities has several benefits:

• it becomes clear what services local authorities are expected to provide;
• it prevents duplication of efforts;
• it allows local citizens where to go when seeking certain public services;
• it also makes holding local authorities accountable, electorally or otherwise, when they fail to deliver on their mandates.

The 1995 Constitution of Ethiopia is silent on the functional competences of local government. Having established a dual federal system, it only lists the competences of the federal and state governments. It indeed enjoins the states to devolve ‘adequate’ responsibilities to local government without actually defining their responsibilities.^[4] So, one would expect the states to define the responsibilities of local government in state constitutions. However, the state constitutions provide in general terms that local government has the power to decide on local social, developmental and economic matters without defining what those are. The question is what functional competences the states transferred to local government. Practice and other subnational legislative documents provide some indication regarding the responsibilities of local government.

As indicated in report section 1, there are two categories of local government in Ethiopia: the ethnic local government and regular local government. The first is established based on the federal principle that provides ethnic communities the right to self-determination. The local government units in this category are nationality zones and liyu woredas. These units are in general responsible for promoting and protecting the cultural identity of the relevant ethnic communities. Their responsibilities thus relate to the promotion of the language and culture of the relevant ethnic communities.^[5]The regular local governments are in turn divided into rural woredas and urban local government (cities). The woredas, which are rural local government units, exercise certain competences in different functional areas. The functional areas that woredas exercise are informed by the policy of poverty reduction which underpinned the whole decentralization program which was launched in the early 2000s. Thus, the functional areas of woredas include the following:

The cities have two types of responsibilities: state functions and municipal functions. The state functions are those services that woredas provide and are linked with poverty reduction. These include primary education, primary health care, and the like. Their municipal functions relate to typical urban services such as garbage collection, sewerage, registration of birth and death.

References to Scientific and Non-Scientific Publications

Legal Documents:

Constitution of the Federal Democratic Republic of Ethiopia (1995)

Scientific and Non-Scientific Publications:

Botchway NF, ‘Good Governance: The Old, the New, the Principle, and the Elements’ (2001) 13 Florida Journal of International Law 160

De Visser J, Developmental Local Government: A Case Study of South Africa (Intersentia 2005)

Manor J, The Political Economy of Democratic Decentralization (World Bank 1999)

Zemelak Ayele, Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014)

[1] James Manor, The Political Economy of Democratic Decentralization (World Bank 1999).

[2] Jaap de Visser, Developmental Local Government: A Case Study of South Africa (Intersentia 2005).

[3] Francis N Botchway, ‘Good Governance: The Old, the New, the Principle, and the Elements’ (2001) 13 Florida Journal of International Law 160.

[4] Art 50(4), FDRE Constitution (1995).

[5] Zemelak Ayele, Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014).

Local Financial Arrangements in Ethiopia: An Introduction

Mohammed Dejen, CFGS – Centre for Federalism and Governance Studies, Addis Ababa University

Local financial autonomy is a critical component of the overall local government autonomy. Local government without financial autonomy cannot enjoy other forms of autonomy. As McLure and Martinez-Vazquez argue, ‘[s]ubnational governments that lack independent sources of revenue can never truly enjoy fiscal autonomy; they may be– and probably are – under the financial thumb of the central government’.^[1]

Local financial autonomy has two elements: revenue raising and expenditure autonomy. The first is linked to local government’s ability to raise revenue from internal sources by imposing taxes and charging fees for services it provides. The existence of internal sources of revenue does not count out the possibility of local government receiving revenue from senior levels of government. However, it is often suggested that local government should cover the majority of its expenditures by using revenue collected from internal sources. Moreover, at least the majority of revenue transferred to local government by the senior levels of government should be unconditional allowing local government to decide on how to spend it.^[2] Expenditure autonomy has to do with local government’s power to autonomously decide on how to spend the revenue it raises.

The Federal Constitution does not assign any revenue raising powers to local government as it does not also assign functional competences to the latter. The state constitutions are also vague on the revenue raising powers of local government. Indeed, under the state constitutions, woredas are mandated to assess and collect – without the power to determine the rate of – certain state taxes, such as rural land-use fees and agricultural income tax. They do so on the regional states’ behalf. Thus, in principle, woredas are required to transfer to the regional government a certain portion of the revenue they collect from these taxes, even though in practice the latter allow them to retain the revenue.

In any case, woredas in different states raise revenue from different sources including:^[3]

• income taxes from woreda employees and from employees of enterprises that are licensed by the woreda;

• taxes from small traders and traditional minors;
• user fees from libraries, clinics and community halls;
• license fees from irrigation schemes and water wells;
• fees for the registration of births, deaths, marriages and divorces.

Likewise, cities collect revenue from the following sources:

• urban land lease fees;
• land-use fees;
• municipal service fees including market fees, sanitary service, slaughterhouses, fire brigade services, mortuary and burial services, registration of birth and marriage, building plan approval, property registration and surveying, and use of municipal equipment, transport or employees;
• sale of own properties (other than land).

Addis Ababa and Dire Dawa, the two federal cities, are authorized to collect from revenue sources that normally fall within the competence of the states, these two cities do not fall within the jurisdiction of any state. They thus collect revenue by imposing income tax on their employees and on income earned from urban agricultural activities, as well as by collecting profit, excise and turnover taxes on individual traders working in the cities. They also collect revenue in the form of urban land-lease and -use fees, property rates, capital gains tax on properties in the city, stamp duties, user charges from vehicles in the city, and services charges on municipal services. Addis Ababa covers close to 97 per cent of its expenditure from internal revenue, and receives no block grant from the federal government.

As a rule, local government cannot borrow money from any source. In fact, even the states need federal approval before they can borrow revenue from domestic market and they are barred from the international market. It is not thus surprising that woreda and cities are barred from borrowing. Perhaps the exception in this regard are Addis Ababa and Dire Dawa which are statutorily authorized to take short- and long-term loans from domestic sources with the authorization of the federal government.^[4] They may directly borrow or sell bonds, provided it does not endanger delivery of basic services.^[5] Furthermore, the Addis Ababa city government may request that the federal government borrows money from international sources on its behalf.^[6]

As far as financial transfers are concerned, woredas receive conditional and unconditional grants from the states. Unconditional grants or which are also known as block grants are woredas’ main source of revenue, covering up to 80 per cent of their budgets. The states set aside approximately 50 per cent of their annual budget for transferring to all woredas within their jurisdiction. The amount of money that a single woreda receives in state transfer is determined based on a preset formula.

Woredas also receive what is called special-purpose grants (SPG) which are conditional grants that the state transfer to woredas. State and federal governments provide financial assistance to woredas with respect to specific projects including projects relating to a food-security program, productive safety-net program, public service capacity-building program (PSCAB), road fund, and HIV/AIDS program. For the purpose of executing these programs, the federal government transfers SPGs to regional governments which, in turn, transfer them to local government.

Cities do not receive financial transfers from the states. They receive transfers that are meant to finance their recurrent costs relating to their state functions. The cities are required to cover the costs of providing municipal services from internal sources. The cities are thus required to administer and record municipal revenue separately from their revenue for state functions.^[7] The federal government also finances specific nationally relevant projects undertaken in Addis Ababa and Dire Dawa.^[8] It may assist these two federal cities financially to enable them to discharge their responsibilities.^[9]

Before the DLDP (District Level Decentralisation Program) was launched in the early 2000s, woredas and cities had no expenditure autonomy. Indeed, local council could make plan and attach budget to their plans. Their plans however needed to be approved by the state executive organ. In the early 2000s, as part of the DLDP, the states revised their constitutions among other things to allow woredas to adopt their budget and decide on their expenditure. It should be noted however that woredas cover over 75 per cent of their expenditure using state transfers. As indicated above the transfers, except the SPGs, are as rule unconditional and woredas can decide how to spend the money they receive from the states. However, the amount that they receive is so small that it barely covers their recurrent budget. Studies show that they spend over 90 per cent of state transfers for paying salaries for their employees.^[10]This leaves them with limited expenditure autonomy.

References to Scientific and Non-Scientific Publications

Legal Documents:

Dire Dawa Government Charter Proclamation no 416/2004

Addis Ababa City Government Revised Charter Proclamation no 361/2003

Scientific and Non-Scientific Publications:

Ayele Z, Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014)

McLure C and Martinez-Vazquez J, ‘The Assignment of Revenues and Expenditures in Intergovernmental Fiscal Relations’(World Bank 2000)              <http://www1.worldbank.org/publicsector/decentralization/March2004Course/AssignmentRevenues.pdf> last accessed 30 December 2019

Werner J and Nguyen-Thanh D, ‘Municipal infrastructure Delivery in Ethiopia: A Bottomless Pit or an Option to Reach the Millennium Development Goals?’ (Working Paper 01-2007, Institute of Local Public Finance 2007) <http://www.ilpf.de/en/download/wp-01-2007.pdf> accessed 30 December 2019

World Bank, World Development Report 1999/2000: Entering the 21st Century (Oxford University Press 1999)

[1] Charles McLure and Jorge Martinez-Vazquez, ‘The Assignment of Revenues and Expenditures in Intergovernmental Fiscal Relations’(World Bank 2000)    <http://www1.worldbank.org/publicsector/decentralization/March2004Course/AssignmentRevenues.pdf> accessed 30 December 2019.

[2] World Bank, World Development Report 1999/2000: Entering the 21^st Century (Oxford University Press 1999) 117.

[3] Zemelak Ayele,Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014).

[4] Art 46(1), Dire Dawa Government Charter Proclamation no 416/2004; Art 55(1), Addis Ababa City Government Revised Charter Proclamation no 361/2003.

[5] Art 46(1), FDRE Proclamation no 416/2004; Art 55(1), FDRE Proclamation no 321/2003.

[6] Art 54(3), FDRE Proclamation no 361/2003.

[7] Jan Werner and David Nguyen-Thanh, ‘Municipal infrastructure Delivery in Ethiopia: A Bottomless Pit or an Option to Reach the Millennium Development Goals?’(working paper 01-2007, Institute of Local Public Finance 2007) <http://www.ilpf.de/en/download/wp-01-2007.pdf> accessed 30 December 2019.

[8] Art 46(1), FDRE Proclamation no 416/2004 ; Art 55(1), FDRE Proclamation no 321/2003.

[9] Art 46(1), FDRE Proclamation no 416/2004 ; Art 55(1), FDRE Proclamation no 321/2003.

[10]Ayele, Local Government in Ethiopia, above.

The Structure of Local Government in Ethiopia: An Introduction

Yilkal Ayalew Workneh, CFGS – Centre for Federalism and Governance Studies, Addis Ababa University

When the DLDP was launched by the federal government in 2001, the role of local governments became crucial and their mandate broadened.^[1] Since 2001, two aspects of decentralization have taken place in Ethiopia: introduction of regular local government level block grants and their splitting. The splitting practices resulted in a dramatic increment of regular local governments throughout the country. By 2013, the number of such local government units had increased by 31 per cent from 2001.^[2] On the contrary, ethnic local governments stayed constant in number.^[3] In this scenario, urban administrations with woreda (district) status were created by splitting out of their host woredas.

Nowadays, the number of woreda and zonal governments is continuously increasing while amalgamation and disappearance of existing local units has remained the exception.^[4] This local government practice has been the locus of state-society relations in the contemporary Ethiopian sub-national politics. Frequent demand has been coming from the local people claiming a new local government status. Despite the impression of the government is towards this frequent demand, the split of local governments remains a pressing issue in Ethiopia. The most significant recent trend of change in the figure of local government is the creation of new (special) woredas and (nationality) zones via the splitting of existing ones.

Splitting of woredas has been encouraged in order to meet two different objectives: (i) ensuring self-governments of ethnic groups and (ii) enhance development and public participation through decentralized governance system. The first motive and its implementation accelerated the claims of self-determination by many minority ethnic groups. This still is one of the pressing issues on the table of regional state executive offices. The splitting practices aimed to achieve the second goal are also accompanied by public requests. Many delegates of people have frequently appeared before the regional state executive office claiming new local government status and hoping to receive service in a more efficient and effective way.

References to Scientific and Non-Scientific Publications

Birhanu A, ‘The Politics of Local Government Creation and Boundary Demarcation within Ethiopian Federation’ (PhD thesis, Center for Federalism and Governance Studies, Addis Ababa University 2017)

Nigussie S, ‘Intergovernmental Fiscal Arrangements in Ethiopia: Some Basic Issues’ in Asnake Kefale and Assefa Fiseha (eds), Federalism and Local Government in Ethiopia (UNDP and Center for Federal Studies 2015)

[1] Solomon Nigussie, ‘Intergovernmental Fiscal Arrangements in Ethiopia: Some Basic Issues’ in Asnake Kefale and Assefa Fiseha (eds), Federalism and Local Government in Ethiopia (UNDP and Center for Federal Studies 2015) 99.

[2] Ayenew Birhanu, ‘The Politics of Local Government Creation and Boundary Demarcation within Ethiopian Federation’ (PhD thesis, Center for Federalism and Governance Studies, Addis Ababa University 2017) 116.

[3] ibid117.

[4] ibid 120.

Intergovernmental Relations of Local Governments in Ethiopia: An Introduction

Ketema Wakjira, CFGS – Centre for Federalism and Governance Studies, Addis Ababa University

Intergovernmental Relations (IGR) is an important body of activities or interactions occurring between governmental units of all types and orders, and how these orders/spheres of government communicate and collaborate with each other.^[1] Being one of the principles that distinguishes federal systems from the non-federal ones,^[2] IGR is an institutional and pragmatic device for dealing with the intricate relations in a multilevel setting. Particularly, Agranoff states:

‘Local governments are inextricably linked vertically to states and to their general governments through ranges of national-state programs, legal and fiscal considerations and horizontally linked with associated local governments and NGOs through partnering, contracting or other forms of externalization.’^[3]

De Villiers^[4] also puts that modern-day governments require the mechanisms and institutions of IGRs so as to implement policies and programs, maximize the standard of service delivery and optimally utilize scarce resources.

Local government basically shoulder two responsibilities. On the one hand, they have to perform as autonomous local self-governing entity. On the other hand, the same local governments are often responsible for implementing policies as an agent of the subnational and federal governments. At the interface of these dual roles of the local governments is IGRs either in the form of supervision and cooperation. Apart from federalism that shapes the urban governance and politics through the constitutional, territorial and political framework, the process of urbanization is another force that influences the governance of urban spaces. To this end, IGR can be presented –both in principle and practice- as an institutional mechanism to overcome the politically divided but functionally interconnected multilevel arrangements and to moderate the often subordinate status of local governments.

In fact, developed and mature federations like Switzerland have put settled systems of local governmental institutions and use intergovernmental bodies and forums for addressing their local demands.^[5]In contrast, in the context of Ethiopia, the involvement of urban local governments (ULGs) in IGRs is more of a requirement than for rural local government (RLGs) because urbanization has already brought a formidable internal change to the federal system. The first internal challenge stems from the fact that urbanization often appropriates a large area of land beyond municipal boundary as economic and functional spaces. This in turn raises land use and local boundary disputes between the city and neighboring rural local governments. The other challenge is related to the demographic pressure due to rural to urban migration process of urbanization in Ethiopia. According to the official estimates about 50 per cent of urban population growth in Ethiopia is accounted for by rural-urban migration. Both the horizontal physical expansion and migration induced pace of urbanization have produced different problems including informal housing, land use and local boundary disputes. It is however clear that a single ULG cannot handle these problems. The ULG needs cooperation from neighboring local government and supra-local governments for addressing the mismatch between municipal boundary and urban functional area. It is this condition that brings the IGRs imperative.

References to Scientific and Non-Scientific Publications

Agranoff R, ‘Local Governments in Federal Systems: Intergovernmental Relations in the Governance Era’ (22nd IPSA World Congress, Madrid, July 2012)

Bulliard P, ‘Local Government in Switzerland’ in Nico Steytler (ed), The Place and Role of Local Governments in Federal Systems (Konrad Adenauer-Stiftung 2005)

De Villiers B,‘Codification of “Intergovernmental relations” by way of Legislation: The Experiences of South Africa and Potential Lessons for Young Multitiered Systems’ (2012) 72 ZaöRV671

Linder W,Swiss Democracy. Possible Solutions to Conflict in Multicultural Societies (3rd edn, Palgrave Macmillan 2010)

Trench A, ‘Intergovernmental Relations: In Search of a Theory’ in Scott Greer (ed), Territory, Democracy and Justice: Regionalism and Federalism in Western Democracies(Palgrave Macmillan 2006)

Wright D, Understanding Intergovernmental Relations (3rd edn, Brooks/Cole 1988)

[1] Deil Wright, Understanding Intergovernmental Relations (3rd edn, Brooks/Cole 1988).

[2] Allen Trench, ‘Intergovernmental Relations: In Search of a Theory’ in Scott Greer (ed), Territory, Democracy and Justice: Regionalism and Federalism in Western Democracies (Palgrave Macmillan 2006).

[3] Robert Agranoff, ‘Local Governments in Federal Systems: Intergovernmental Relations in the Governance Era’ (22nd IPSA World Congress, Madrid, July 2012) 1.

[4] Bertus de Villiers, ‘Codification of “Intergovernmental relations” by way of Legislation: The Experiences of South Africa and Potential Lessons for Young Multitiered Systems’ (2012) 72 ZaöRV 671.

[5] Bulliard Pascal, ‘Local Government in Switzerland’ in Nico Steytler (ed), The Place and Role of Local Governments in Federal Systems (Konrad Adenauer-Stiftung 2005); Wolf Linder, Swiss Democracy. Possible Solutions to Conflict in Multicultural Societies(3rd edn, Palgrave Macmillan 2010).

People’s Participation in Local Decision-Making in Ethiopia: An Introduction

Zemelak Ayele, CFGS – Centre for Federalism and Governance Studies, Addis Ababa University

Scholars consider local government to be the best level of government for public participation.[1] This mainly because it is relatively small in territorial and population size which makes it effective in allowing public participation. The Ethiopian Constitution also links the establishment of local government with enhancing public participation. Likewise, the District Level Decentralisation Program (DLDP) was implemented with enhancing public participation at the local level. In the policy papers that articulated the need to decentralize powers at the local level it was clearly stated that doing so was imperative to empower local communities to ‘participate, negotiate and influence’ the decision-making processes concerning local matters. To this effect it was stated that regular local elections would be conducted and that the capacity of local representative councils and other democratic institutions would be strengthened.^[2] The decentralization program was also underpinned by the need to create enhanced opportunities for civil society organizations to play an important role in the process of service delivery by facilitating ‘interaction, and mobilizing groups and communities to participate in social, economic and political activities’ in particular at local level. The need to empower women was also taken as an integral part of this local political reform.^[3]

Public participation at the local level takes place in two major ways. The first is an indirect one, through the electoral process. Local governments of all tiers have an elected representative council and a parliamentary form of executive. Members of local councils are directly elected by local communities on the basis of a multiparty system. Since the adoption of the 1995 Constitution five local elections have been held (in 1997, 2002, 2008, 2013). The sixth local elections were supposed to be held in May 2018. Due to the political crisis in the country which began in 2015 and the poor security situation, these elections have been postponed indefinitely. Local elections in Ethiopia are not in general viewed as important elections both by political parties and the voters. The opposition parties have never taken part in local election since the adoption of the 1995 Constitution. They often accuse the ruling party of political repression and boycott local elections. The reason for doing so does not however seem to be only the repression by the ruling party. Opposition parties take part in national elections while complaining about political repression. It rather seems that they do not view winning local elections as important political exercise. There seems to be also a general lack of enthusiasm about local elections among voters. Yet, post-election reports of the National Electoral Board of Ethiopia – the federal agency which is charged with administering elections – claim that voter turnout is around 90 per cent. These numbers are not however to be trusted. The fact is that in every local elections EPRDF’s candidates ran in every constituency uncontested and become declared winners. Local elections as means of political participation for local communities seem to have little relevance. And the local voters had little incentive to come out in large number and cast their votes.

The other form of participation is direct participation. Members of local communities are expected to participate during planning process. This especially takes place at the kebele level which is, as explained in report section 4 on local government structure, the lowest tier of local government. At the kebele level, members of a local community, both individually or through civil society organizations, are entitled to take part in annual planning processes by stating what services need to be given priority in a given fiscal year. The local officials are expected to consider what local communities say should be given priority when drafting annual plan with respect to service delivery. According to Zemelak Ayele, local planning takes place in the following process:

‘A woreda’s development planning begins with public consultation at village level, the main purpose of which is to identify community problems and prioritise them. The consultations are facilitated by employees of the kebele. Civil society organizations (CSOs) are also invited to participate. The CSOs that are invited include traditional associations called Idir,[4] and others which are engaged in provision of certain basic services including water, sanitation and the like. The community needs that are identified at village level are consolidated at kebele level and become a “single kebele priority list”. The aggregated priorities at kebele level are also discussed at a kebele general community meeting of the kebele’s residents. The kebele priority lists are then sent to a woreda where the priority lists of the various kebeles are consolidated by the woreda development planning committee. The aggregate woreda priorities are then re-organised on a sectoral basis and passed on to the sectoral office concerned. Based on the priority list, each sectoral office decides on the “intervention areas” and produces a plan. The plan of each sector is then aggregated and “linked to a budget”. The plans that are prepared at sectoral level are discussed and negotiated among the various offices with the facilitation of the Woreda Planning and Budgeting Desk. The end-result of this negotiation is a single woreda plan identifying woreda priorities and linking them to budgets. The woreda plan is finally submitted to a woreda council for approval.’^[5]

Studies show that direct public consultation at the local level are far from participatory and ineffective in terms of identifying what the public requires to be prioritized. First, public consultations are mainly used for extracting information rather than involving local communities in decision-making. Moreover, whatever members of a local community have said should be prioritized in terms of service delivery are often lost in the process of aggregation and disaggregation by local government experts. Moreover, local officials often ignore what have been identified by local communities as important intervention areas in terms of service delivery and implement their own preferences.

References to Scientific and Non-Scientific Publications

De Visser J, Developmental Local Government: A Case Study of South Africa (Intersentia 2005)

Dowding K, ‘Public Choice and Local Governance’ in Desmond King and Gerry Stoker (eds), Rethinking Local Democracy (Macmillan 1996)

Beetham D, ‘Theorising Democracy and Local Governance’ in Desmond King and Gerry Stoker (eds), Rethinking Local Democracy (Macmillan 1996)

Federal Democratic Republic of Ethiopia Ministry of Finance and Economic Development (MoFED), ‘Sustainable Development and Poverty Reduction Programme’ (2002)

Zemelak A, Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014)

[1] See David Beetham, ‘Theorising Democracy and Local Governance’ in Desmond King and Gerry Stoker (eds), Rethinking Local Democracy (Macmillan 1996) 38; Keith Dowding, ‘Public Choice and Local Governance’ in Desmond King and Gerry Stoker (eds),Rethinking Local Democracy (Macmillan 1996) 53;Jaap De Visser, Developmental Local Government: A Case Study of South Africa (Intersentia 2005).

[2] Federal Democratic Republic of Ethiopia Ministry of Finance and Economic Development (MoFED), ‘Sustainable Development and Poverty Reduction Programme’ (2002).

[3] ibid.

[4] These are traditional association, often informally established, and meant to serve as self-help association. The assist their members with matters relating to funeral and other social issues.

[5] Zemelak Ayele, Local Government in Ethiopia: Advancing Development and Accommodating Ethnic Minorities (Nomos 2014).