In Ethiopia, Financial Transparency Increases Citizen Engagement in Government Budgeting to Improve Local Services

ADDIS ABABA, May 7, 2021 - Aregash Ashengo, a resident of Dolo woreda (district), never liked paying taxes.

But that was before she took government-sponsored budget literacy training and began participating in local budget discussions. Now, paying taxes is a little bit easier for her knowing that her tax payments contribute to benefits such as health services for herself and her family.

Aregash is one of the more than two million Ethiopians that have taken the budget literacy training through the government's Financial Transparency and Accountability (FTA) initiative. The FTA, with support from the World Bank-financed Enhancing Shared Prosperity through Equitable Services (ESPES) Program, has helped to improve understanding of the local budgeting process, and the quality of basic services for millions of Ethiopians like her.

'In 2009, only 9% of Ethiopian citizens understood the local budgeting process, but the FTA initiative has changed that,' said Yoseph Abdissa, World Bank Senior Social Protection Specialist. 'Today, more than 69% of citizens have gained local budget knowledge, and in the spirit of transparency, nearly all districts publicly display budget and expenditure information and about half disclose audit findings and corrective actions, as well as procurement information.'

With the success of the budget training, the government aims to move the FTA initiative beyond education and publicizing information by incorporating citizen input and fostering active participation in the budget process.

'We give briefings on capital budgets to community representatives selected from each woreda,' said Girma Alemu, Finance Bureau Deputy Head of East Harerge Zone. 'Our being transparent on the resources available and allocation has given us relief because the public is now aware of the budget and how it is distributed.'

Getting citizen input on spending

Although the COVID-19 (coronavirus) pandemic and related restrictions on public gatherings delayed the process last year, pre-budget discussions between the government and citizens are now being held in many districts throughout the country - a practice the government aims to increase to at least 850 districts.

The pre-budget discussion allows citizens, citizen representatives, and district administrators to sit together and identify critical issues around basic services-such as health, education, agriculture, water and rural roads-that require budget in the coming fiscal year. It also allows people to clearly identify priority investments in their own communities, as well as promotes accountability by gaining citizens' input on the need to weigh different priorities across communities in the face of real budget constraints.

In Kombolcha Woreda, where Mohammed Ibrahim serves as the head of the finance bureau, the FTA has created discussion platforms for the community to prioritize road access.

'In our woreda, there are kebeles with road access which allows them to use motorcycles to reach the woreda center but there are other kebeles with no road access at all,' Mohammed said. 'We discuss this with communities and create an agreement on which kebele should get a priority.'

Specialized FTA staff positions now exist in the formal public servant structures at federal, regional and district level finance bureaus and FTA is part of regular trainings for staff in the sector. Their work includes publicizing information about the government budget, expenditure, procurements, auditing, as well as service delivery standards. In other words, they help ensure that people understand what government services they are entitled to and how those services are paid for.

Additional mechanisms for citizen engagement include the Ethiopia Social Accountability Program (ESAP), another initiative under the ESPES program.

Institutionalizing FTA: Links with the International Budget Partnership

In 2020, Ethiopia joined the International Budget Partnership, an organization that works with multiple actors, including governments, to empower citizens to participate in open, inclusive budgeting processes to shape policies and practices that promote equity and justice sustainably. Research by IBP shows that countries with higher levels of budget transparency also tend to achieve more positive development outcomes, realize the economic and social rights of their citizens more fully, and are more democratic.

'Our recent decision to join the International Budget Partnership is the result of impacts gained through the FTA work,' said Dawit Shimelis, Director of the Ethiopia Expenditure Management and Control Program Directorate. 'Ethiopia's first Open Budget Survey will be conducted this year and will let us know where we are in terms of budget transparency, participation and oversight, as well as next actions that will be done to enhance citizens engagement in optimum utilization of public resources to improve basic service delivery across the country.'

Now, as the ESPES Program scales-up, the government has committed to further attention to citizen engagement. The latest phase of the program supports a quarter of districts across the country to adopt a new Citizen Budget initiative which is a more user-friendly format to present budget information. The goal is to help ordinary citizens more easily track results from previous years' spending, and to inform their decisions about where to allocate resources for the coming year. The Citizen Budget, which has a solid track record across Africa, will enable the Ethiopian Government and its partners to communicate complex information simply, making it easier for more people to be aware of budget allocation, and to have a say in how money allocated for services are spent.