The Human Dimensions of the Financial & Economic Crisis in Ethiopia
RFP/033/2009
UNDP Ethiopia invites Potential and capable consultancy firm to undertake a study on human dimensions of the Global financial and Economic crises in Ethiopia as per the detailed ToR Blew:-
Terms of Reference
1. Background and context
The Plan for Accelerated and Sustained Development to End Poverty (PASDEP—Ethiopia’s PRSP) shows that the percentage of the population living below the poverty line declined from 44% in 1999/2000 to 38.7% in 2004/05. PASDEP projects the poverty headcount index to decline further to 29% and the food poverty headcount index to 28% at the end of the 5th year’s period (2010/11). The poverty reduction effort of the Government of Ethiopia has taken a longer-term view with the MDGs in perspective and PASDEP has been conceived as the medium term plan to attain at least the MDGs.
The overall performance of the macro economy, as measured by real GDP growth rate, has witnessed an annual average real GDP growth rate of 11.8 % during the four years ending 2006/07. Other social indicators have also shown notable progress. For instance primary schools gross enrolment ratio improved from 37% in 1996 to 91.6% in 2006/07. Net Primary Enrollment ratio for school age children (7-14) has increased to 78.6%. Likewise, literacy rates have increased from 26% in 1996 to 38% in 2004, with a noticeable surge in the period 2000-2004. The proportion of area further than 5km away from all weather roads has been reduced to 68%. The average time taken to reach to all weather roads has also been reduced to 4.5 hours. These results reflect additional public expenditures within the framework of a donor supported sector-wide programme) as well as a number of institutional reforms, including the abolition of school fees, introduction of a feeding programmes, establishment of compulsory education through grade 8, and decentralization in education decisions.
Similarly, though less noticeable progress, at national level, there has been steady progress in key health indicators, among them declines in the level of stunting and wasting and the prevalence of underweight children 3 to 59 months, from over 65% in 1996 to 46.88% in 2004. Potential Health service has reached 89%. Antenatal coverage reached 52% in 2006/07, while the proportion of deliveries attended by skilled health personnel is estimated to be 16% in 2006/07 from 9% in 2004/05. Life expectancy, though severely impacted by the AIDS epidemic, is slowly rising, due to significant progress in immunization rates and the improved social indicators referred to earlier. Access to clean water supply at national level reached 52.46% (i.e., 82.02% for urban and 46.39% for rural areas.
According to the APR, although it still falls short of what has been planned in the PASDEP, ODA including Technical Assistance has increased from 1.05 billion USD in 2005/06 to a little over $1.5 billion USD in 2006/07. Government spending on pro-poor sectors (agriculture and natural resources, education, health, roads) has also shown increment by 20.1% from its level in 2005/06 and reached 45.5% of total expenditures in 2006/07. This figure was budgeted to increase to 61.5% of the total budget in 2008/09.
These positive trends and the desirable objectives outlined in the PASDEP—poverty reduction and the achievement of MDGs—are being challenged by the food, financial and economic crises. The financial and economic crisis descended on Ethiopia just as the country was recovering from the earlier crisis of escalating food, fertilizer and fuel crisis that resulted in higher inflation, depleted foreign reserves when government revenue collection as a percentage of GDP was already declining, thereby deepening the challenges faced by Ethiopia. This foreign reserve position which, by end-November 2008 reached a low of 1month of import cover for goods and services left Ethiopia fourth lowest reserve position among 42 African countries. Along with declining revenue, this meant that, as in all African countries, Ethiopia was not in a position to even contemplate a stimulus package despite the fact that it needed one as badly as all others. As the financial and economic crisis deepened, Ethiopia saw falling exports which directly impinged on its budget and therefore the potential to affect its pro-poor expenditures and public investments. As exports fell, it is expected that employment also fell, both of which can have direct effect on household/family income/budgets and through this, on their ability to self-finance their needs in education, health, food and nutrition, among others. This will accentuate an already challenging situation for poor households.
In the midst of these challenges, including declining revenue, the government is also challenged with the maintenance of a macroeconomic framework that will keep key fundamentals in check. This includes tight fiscal policy to rein in inflation at a time when jobs are apparently being lost, households adversely affected and expectations are that government will embark upon expansionary policies to the degree possible to stimulate the economy.
It is in the milieu of these opposing demands that this study is being embarked upon to assess the full extent of the human dimensions of the crisis so as to inform appropriate government policy response and define appropriate advocacy message, and recommend appropriate business and household responses. The impact of the crisis on women and children, on education, health, nutrition and other necessities are fundamental elements not only in informing appropriate government response today, but can throw light on the future costs of the crisis and hence appropriate government response in future.
2. Impact of the crisis: variables to be investigated
Various literatures on the subject identified various channels of transmission of the crisis from developed to developing countries. A recent discussion paper produced by UNDP[1] identified three areas of transmission of the effect of the crisis on developing countries. These are remittances, private capital flows and trade. While these are the primary impacts, there are other secondary impacts that occur as the result of these primary impacts. The focus of the crisis so far has been on the primary impacts, while the secondary impacts—the human development dimension—is not yet looked at.
This study will look at both kinds of impacts, with emphasis on the secondary ones. In this regards, among other things, the following areas are to be investigated. Cutting across all the elements is the impact of the crisis on the progress towards achievement of MDGs. 3. Objectives of study The objectives of the study are to assess the human dimensions of the global financial and economic crisis in Ethiopia. To this end the study will look at the impact of the crisis on livelihoods in rural and urban communities and in each to disaggregate the impact across gender lines as much as possible. In this regard, the study will provide answers to the following questions: o How has the crisis affected households and communities in Ethiopia especially the poor? o How has the crisis affected the public, private and informal sectors?
o What is the degree of the impact in urban vs rural areas and among women and men?
o What is the evidence of household and business coping strategies that have or seem to work and how replicable are these?
o What happened to remittances during the period and how has this impacted on households and businesses? Has there been return migration and re-integration in the local economy?
o Has there been decline in government expenditures on pro-poor sectors as the result of the crisis? How can this be mitigated? What should the role of all stakeholder? What kind of additional support is needed from development partners so as not to reverse the gains registered over the past years on the human development front?
o Have there been any positive developments in the country as result of the crisis?
o What are the policy implications and possible lessons that could be learnt?
4. Methodology The results of the study will inform the formulation of policy responses and advocacy messages and positions by government and the encouragement of appropriate responses by all stakeholders including households and business communities. As a result, the methodology should be exhaustive enough and will include desk reviews, data collection (secondary, and if necessary primary data) and interviews of appropriate stakeholders including government, affected private sector enterprises, and households. Multitudes of socio-economic indicators are involved in the assessment of the human dimensions. Given the observed impact of the crisis on virtually every conceivable socio-economic indicator, it would be essential to delineate those effects that emerge specifically from the crisis. The consultants are encouraged to come up with a methodological framework that will address this and that distinguishes those factors and influences emerging from the external sources compared to domestic factors and internal problems that are not linked to the current crisis. The study is a preliminary assessment as it is early to understand the full extent of the human dimensions of the crisis, as there is a time lag between the crisis and its impact on human development, which are often observed in the medium to long terms. In this sense the study is expected to come up with various scenarios expected from the impact of the crisis. The study is also expected to be an empirical assessment to the extent possible, but where necessary, complementary qualitative assessments will be undertaken using participatory research methods. 5. Expected Results
The expected results are, in general, a detailed empirical and qualitative assessment of the impact of the crisis on the various constituents. In particular, the study should clearly articulate: a. An inception report that outlines the conceptual framework, defines the scope and elaboration of variables to be investigated, suggest methodologies that would answer the research questions and an annotated outline of the final report. b. A draft report, which shows:
i. the full impact of the crisis on households, communities, businesses and government (observed as well as perceived), ii. Identified coping strategies embarked upon by communities, households and businesses to mitigate against the crisis, iii. a clear set of scenarios of impact, policy recommendations for government with attendant scenarios, with the aim of achieving the MDGs, iv. a clear set of recommendations for the private sector, communities and households including a clear set of successful coping mechanisms that have been identified. c. Final report, which incorporates comments from a steering committee and others
6. Consultancy a. Tasks i. Undertake desk reviews, interviews, assessments and data collection. ii. Produce an empirical analysis complemented by appropriate qualitative assessments as per the expected results above. iii. Define the scope, taking into consideration the country context and the priorities of the country set out in the Plan for Accelerated and Sustained Development to End Poverty. iv. Identification of indicators under human dimension which the study will look at. v. Produce an initial zero draft to be reviewed by the Ministry of Finance and Economic Development and UNDP. Comments from these will be incorporated and the first draft submitted. vi. The First Draft will be subjected to a National Stakeholders workshop and comments from this will be incorporated into a final report. b. Experience and qualifications The study will be undertaken by a firm with a team of international and national consultants with demonstrable capacity to undertake the study. The study will be overseen by a steering committee comprising of heads of Planning Departments from key Ministries[i], Central Statistics Agency, Addis Ababa University and UNDP. This committee will be tasked with facilitating the collection of data, coordinating the study and reviewing the various versions of the study and quality assurance.
c. Duration The study is expected to last about 12 weeks and the services of the consultants are expected to be about eight weeks, spread within the twelve weeks. 7. Submissions Interested Bidders should submit their technical and financial proposal in a separate sealed envelope to the below address no later than 23rd October 2009:- UNDP Ethiopia Procurement Specialist UNECA Compound Old Building Reference: RFP/033/2009 Fax: 251 11 5514599 / 5515147 Tele: +251 11 515177 P. O. Box 5580, Addis Ababa Ethiopia