A Research Report on
Policy Information Gap Analysis on Selected Topics
June 16, 2014
Table of Contents
Acronyms
General Introduction
I.ENERGYPOLICY
1.1.Introduction
1.2.Policy
1.3.How the Policy informs or relates with PRIME activities
1.4.Opportunities and Challenges of the policy and the practice for PRIME activities
1.4.1.Opportunities
1.5.Challenges
1.6.Conclusion and Recommendation
1.7.Reference
II.Livestock and Livestock Products Trade Policy
2.1.Content
2.2.Description
2.3.Achievements so Far/ Practicability
2.4.The Policy’s Relevance to PRIME Activities
2.5.Conclusion and Recommendations
2.6.Suggested Readings
III.Micro and Small Enterprises Development and Entrepreneurship Strategy
3.1.Introduction
3.2.Description
3.3.Legislative and Institutional Framework
3.3.1.Microfinance Proclamation
3.3.2.Establishment of Cooperative Societies
3.3.3.Establishment of the Federal Agency for the Development of Micro and Small Enterprises
3.3.4.Establishment of Regional Agencies for Micro and Small Enterprises Development
3.3.5.Capital Goods Leasing Business Proclamation No. 103/1998
3.4.Relevance of the Policy for PRIME activities
3.5.Conclusion and Recommendation
3.6.Suggested Readings
IV.Technical and Vocational Education and Training (TVET) strategy
4.1.Introduction
4.2.Policy, Legal and Institutional and Legal Framework at the National Level
4.3.The Regulatory Framework in Afar, Somali and Oromia Regional States
4.4.Relevance of the Policy for PRIME Activities
4.5.Conclusion and Points for Considerations for PRIME Intervention in the TVET Sector
4.6.Suggested Readings
V.The Ethiopian Water Resources Management Policy: Particular emphasis to the Pastoralist Community
5.1.Introduction
5.2.The Policy
5.3.How the Policy Informs or Relates with PRIME Activities?
5.4.Conclusion
5.5.Suggested Readings
VI.The Land Policy in Ethiopia: Particular Emphasis to the Pastoral Community (Afar, Oromo, Somali)
6.1.Introduction
6.2.The Policy
6.3.Description of the policy
6.3.1.At Federal Level
6.3.2.At Regional State Levels (Oromia, Afar and Somali)
6.4.How the policy informs or relates with PRIME activities?
6.5.Conclusion
6.6.Suggested Reading
VII.Forest Development, Conservation and Utilization Policy and Strategy
7.1.Introduction
7.2.The Policy
7.3.Description of the policy
7.4.How the policy informs or relates with PRIME activities?
7.5.Conclusion
7.6.Suggested Readings
VIII.Climate Change and Disaster Prevention and Preparedness Policy
8.1.Introduction
8.2.Overview and Institutional Framework of the Policies, Strategies and Programs.
8.3.Description of the Policies
8.3.1.Federal and State Level Disaster Risk Management Policies
8.4.Implication of the Policy to PRIME
8.5.Climate Change Related Policies, Strategies and Programs
8.5.1.Description of Climate Change Related Policies, Strategies and Programs
8.5.2.Practicability and Progress on Implementation
8.5.3.Implication of the strategy and programs on PRIME
8.6.Conclusion and Recommendation
8.7.References
Annex: List of Contacted Persons for Key Informant Interview
Acronyms
ADLI Agricultural Development Lead Industrialization
BDUSBiofuel Development and Utilization Strategy
BPR Business Process Reengineering
CAHWs Community Animal Health Workers
CMF Crisis Modifier Fund
CRGE Climate-Resilience Green Economy
DRM Disaster Risk Management
DRMFSDisaster Risk management and Food security Sector
DRMP Disaster Risk Management Policy
DRR Disaster Risk Reduction
EEA Ethiopian Electricity Agency
EEAu Ethiopian Energy Authority
EEF Energy Efficiency Fund
EEPCO Ethiopia Electric Power Corporation
EIWR Ethiopian Institute of Water Resources
ELTA Ethiopian Livestock Traders Association
EMMA Emergency Markets Mapping and Analysis
EMPEA Emerging Markets Private Equity Association
EPACC Ethiopian Programme of Adaptation to Climate Change
ESIFSLM Ethiopian Strategic Investment Framework for Sustainable Land Management
EWS Early Warning System
FDREFederal Democratic Republic of Ethiopia
GHG Greenhouse gases
GTPGrowth and Transformation Plan
IR Intermediate Result
MFIsMicro Finance Institutes
MoAMinistry of Agriculture
MoFEDMinistry of Finance and Economic Development
MoW Ministry of Water
MSE Micro and Small Enterprises
NDPPCNational Disaster Prevention and Preparedness Committee
NDPPFNational Disaster Prevention and Preparedness Fund
NEP National Energy Policy
NGO Non Governmental Organization
NLDP National Livestock Development Program
NPDPM National Policy on Disaster Prevention and Management
OSCs One stop centers
PASDEP Plan for Accelerated and Sustainable Development to End Poverty
PRIME Pastoralists’ Resilience Improvement through Market Expansion
PVPhotovoltaics
PVPs Private Veterinary Pharmacies
RDPPCRegional Disaster Prevention and Preparedness Committee
RDPS Rural Development policy and strategy
REDD Reducing Emissions from Deforestation and Forest Degradation
R-PP Readiness Preparation Proposal
SaCCOsSaving and Credit Cooperatives
TGETransitional Government of Ethiopia
ToPs Transitioning Out of Pastoralism
TVET Technical and Vocational Education and Training
UNEP United Nations Development Program
UNFCC United Nation Framework Convention on Climate Change
VSLASVillage Saving and Lending Associations
WREMWater Resources Engineering and Management
General Introduction
Approach and Context
Sustainable program intervention should consider the policy framework of the country and the respective regions in which PRIME operates. This activity, therefore, envisages the assessment of policy, institutional and legal framework and their implementation in PRIME operational areas. The assessment is aimed at providing the basis for further special policy studies on selected topics/areas. These sectors are: natural resource management (Land, Water and Forest), climate change and disaster prevention, livestock marketing and microfinance, micro and small enterprise and entrepreneurship, technical and vocational education and training Institutions, Energy Sector.
It is not an in-depth analysis of the policies and laws and their implementation. It is intended to serve as a stepping stone for further special policy researches. The Policy information gap analysis has been done based on the policy and laws collected from different sectors which are very important for PRIME. The data collection took about 25 days in the three clusters (Afar, Oromia and Somali Regions) and the Federal Institutions. The following are the sectors covered.It is a descriptive analysis consisting of the explanation of the policies and laws in the sectors mentioned above, the gaps existing either in the policy documents or in their implantation. A total of thirty two (32) government institutions located and operating in Addis Ababa and PRIME intervention areas (three regions) were visited for conducting key informant interview and collecting policy and legal documents.
The assessment conducted in the three clusters and Addis Ababa revealed that there are sectors that deserve coordination of and also areas where full-fledged policies are not available - this mainly concerns the livestock sector. The energy policy in force is very old and the government is not doing enough to get the draft energy policy approved by the Council of Ministers. In Afar Regional State, there are no microfinance institutions and this hinders access to finance for micro and small enterprise operators and for pastoralists engaged in cooperatives. As a result, one stop centers are not established and micro and small enterprise are not receiving the required support from the government. It is NGOs operating in the region that provides seed money for some of the pastoralist involved in MSEs. In the area of climate change and disaster risk management, there is lack of awareness about existing policies and current developments. Officials in pastoralist areas complain that policies are not well adapted to the special conditions and life style of pastoralists.
Summary of findings
The assessment suggested that the policies covered under this study failed to emphasize the special needs of pastoralists. This is particularly true for the energy sector. This sector is not given due attention and institutions are characterized by lack of sufficient expertise and fund to carry out their duties. We recommend a full scale policy analysis to be undertaken in some policies governing some sectors like MSEs and Microfinancing. The assessment also revealed that access to finance in Afar Regional State is a serious concern for MSE operators and cooperatives as there are no microfinance institutions working in the region.
In almost all regions in which PRIME operates, the national policies are adopted by the regions with no or very little effort to adapt it to the unique situation existed in respective regions. As it is understood from the MSE policy and the structure and power of the executive organs of the government both at regional and federal level, the development of MSE sector is part of an urban development plan. This is of little significance for regions like Afar where majority of the population is not urban settler. Therefore, it is recommended that the states’ capacity should be enhanced so that a policy accommodative of the special conditions of the regions can be formulated.
PRIME is aiming at easing business start up for pastoralists transitions out of pastoralism. This activity cannot be meaningfully achieved without the potential entrepreneurs, that PRIME sought to assist, being well trained about what the regulatory framework expect them to fulfill before starting their business. Therefore, it is better if learning materials can be prepared on the regulatory framework of the MSEs, trade registration and licensing requirements together with the provision of training on entrepreneurial skills.
The TVET Proclamation leaves various issues regarding the provision of TVET training, especially basic vocational training and junior technical and vocational training to their discretion. For instance, they have the discretion to determine the duration, language and content of the training taking into consideration their local needs and the country’s development strategy. Therefore, for sustainable and successful implementation of activities of PRIME related with TVET training for ToPs, the working requirements and procedures at regional level should be researched and compiled systematically so that compliance with the mandatory rules can be ensured.
I.ENERGY POLICY
1.1.Introduction
Sustainable, affordable and reliable energy for all citizens is a key factor in realization of the vision of any government. It is one of the infrastructure enablers of socio- economic development. The cost of energy has significant impact on economic activities particularly those that are energy intensive such as cement, steel, pulp and paper production. Energy shortages and supply disruptions coupled with high cost remain serious obstacles to the development of different the countries of the world including Ethiopia. The FDRE government has prepared the NEP in 1994 to fulfill the energy need of the people. The overall objective of the energy policy is to ensure affordable, sustainable and reliable supply of energy which meets the national development needs, while protecting and conserving the environment.
PRIME is working to improve the livelihood of the pastoralist through different activities. Among other things, the program includes facilitation of opportunities for pastoralists and semi pastoralist community in Afar, Somali and Oromia in general and for women in the area in particular to participate in income generating activities. In identifying these opportunities the program will place special emphasis on low cost energy technologies such as fuel efficient stoves, waste water reuse systems and solar technology that could either decrease time spent on household chores or increase productivity. The NEP as a policy applicable throughout the country has dealt with the energy issues to a greater extent. Having saying this, this policy review is prepared mainly for two reasons. The first is to inform the consortium members about the content and the scope of the existing energy policy. The second is to identify a policy gap and conduct a policy research, if there exist any. Thus, this review examines mainly the content of the NEP and strategies, laws and programs of the federal government and regional governments (Oromia, Afar and Somali if they have any) in terms of adequacy, relevance and implementation constraints for PRIME.
With a view to make this, this review will have four sectionsto deal with the matter. The first section deals with the format, type and scope of the NEP. The second section deals with the description of the policy briefly while the third section connects the policy with the activity of PRIME. The fourth section deals with the conclusions and recommendations of the study. Finally there will be suggested readings.
1.2.Policy
The NEP was prepared during the period of the TGE (1991 to 1994) and issued in May 1994 and it is the first national energy policy of Ethiopia.[1] Regimes before the FDRE government attempted to prepare energy policy for the country even though none of them succeeded. This Energy Policy document is a well prepared policy document despite that it is over a decade old and has some minor gaps.[2]
This policy is still in force as the energy policy of the FDRE government. However, recently the Ministry of Water and Energy announced that they are preparing a draft document amending the NEP of the country.[3] The amended draft policy tries to address the gaps of the existing NEP. The ministry has also presented it for discussion with different stakeholders such as university professors, NGO’s, environmentalists and etc. According to the discussion the amendment is needed based on the fact that the previous NEP does not take into consideration the current Ethiopia’s vibrant economic growth, it does not interrelate the current development with energy demand of the country and it does not strengthen the effort to building renewable energy like bio fuel development through incorporating technologies that mitigate environmental pollutions.
The NEP is applicable throughout the state of Ethiopia since its preparation till the country is federated. Some points from NEP are touched in other sectoral policies, strategies and programs such as environmental and Industrial. The Environmental Policy of Ethiopia tries to address energy poverty and ensure access to energy for the poor by also taking into consideration the real impact they have on the environment.[4] The Industrial Policy of Ethiopia also tries to address how the industries expanding in the country could consume energy and without affecting the environment.[5]
The NEP has been on the paper without providing policy instruments for a long period of time,[6] even though; it is prepared during the TGE. Compared to the other sectors, the policy does not have specific strategies, legislations and plans to put it on the ground. The mandate to control the implementation of the policy has been given for different ministries at different times based on the proclamation which restructures and defines the power and duties of the executive. Before the current proclamation No. 803/2013 which gives the mandate for the Ministry of Water, Irrigation and Energy[7], it was given for the Ministry of Water and Energy based on Proclamation No. 691/2010.[8]
The NEP contains six sections within it: The preamble, the rationale for the policy, policy objectives, general policy, priority policy and main policy issues and strategies. It is prepared with the general rationale of formulating a comprehensive national energy policy which ensures least-cost development consistent with the country's energy resource endowment and socio- economic policies. It has the following general objectives to achieve in a short and long term plan.
To ensure a reliable supply of energy at the right time and at affordable prices, particularly to support the country's agricultural and industrial development strategies adopted by the government.
To ensure and encourage a gradual shift from traditional energy sources use to modern energy sources.
To stream-line and remove bottlenecks encountered in the development and utilization of energy resources and to give priority to the development of indigenous energy resources with a goal toward attaining self sufficiency.
To set general guidelines and strategies for the development and supply of energy resources;
To increase energy utilization efficiency and reduce energy wastage; and,
To ensure that the development and utilization of energy is benign to the environment.
This general rationale of the policy is further specified by the following specific purposes.
To develop and utilize the country's energy resources on the basis of Ethiopia's overall development strategy priority along with the introduction of energy conservation and efficiency strategy.
To support other economic sectors to meet their development objectives by putting in place a clearly defined energy policy;
To save scarce foreign exchange resources and to ensure that energy is efficiently utilized;
To ensure reliable and secure energy supplies to cushion the economy from external and internal disruptions of supply as well as price fluctuations;
To change the current energy production and utilization practices and ensure that energy development is based on sound management practice and is benign to the environment.
To formulate comprehensive energy prices in order to ensure financial and economic profitability;
To ascertain what energy technologies and equipment are appropriate for and compatible with the country's economic development needs; and
To raise the efficiency of the energy sector and develop the necessary institutional and manpower capabilities by introducing appropriate incentive measures, to undertake energy development programs.
Since the coming into force of the policy, there is only one strategy, the BDUS, prepared to implement the policy. This strategy was prepared by the FDRE Ministry of Mine and Energy in 2007. The implementation of it is supervised by the same organ. It is applicable through Ethiopia as whole. The demand for the strategy emanates from two big reasons. The first is the recent rising of energy or fuel price. Fuel demand is getting higher while the supply is getting less. Political and social unrest in some oil producing countries also contribute to the escalation and destabilization of oil prices in the world. The oil price increase, which is the result of the mismatch between demand and supply, is becoming the barrier for stable and sustainable economic development for many countries, particularly for the developing world. The second reason is the search for ways to mitigate climate change. The international community believed that fossil fuel use is the main cause for atmospheric air pollution and earth warming, strong effort is being exerted to minimize the use of fossil fuels and to substitute by renewable energy sources. The strategy aims at avoiding the energy problem in the country by generating alternative energy sources. The objective of the strategy is to ensure the production of biofuel without affecting food self sufficiency, import substitution and improve balance of payment.