The World Bank Group board today approved a US$175 million grant to help vulnerable populations in Ethiopia lower their risks of serious food shortage and famine.
The grant finances the second phase of an existing operation, the Productive Safety Net Program (PSNP), which is reaching over 7 million of the poorest Ethiopians through public works and direct grants. The targeted beneficiaries of the program are chronically food insecure households which are unable to secure sufficient food for their families year after year. The grant will provide continuing funding for the program, while supporting improvements in the program governance and efficiency.
The program initially reached about 5 million chronically food-insecure people, then was scaled up in 2006 to reach 7.23 million people. The PSNP supports a large-scale public works initiative which pays wages to food insecure but able-bodied citizens. For those physically unable to work, the program provides direct grants.
By replacing food aid with jobs and cash payments, the program helps stimulate rural economies while also addressing some of the underlying causes of food insecurity. The added benefit of improving public infrastructure and maintaining community assets through public works will also bring long term improvement to rural livelihoods.
In recent years, Ethiopia has posted a comparatively strong growth performance, while increasing the portion of the national budget dedicated to poverty-reduction spending. Though starting from a low base, the country has begun to show progress toward achieving some of the Millennium Development Goals? including strong gains in increasing school enrolment and lowering malnutrition. It is estimated that between 2000 and 2005, the level of poverty fell from 44.2 percent of the population, to 38.7 percent.