Report No: ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39850) ON A CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No: ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39850) ON A CREDIT IN THE AMOUNT OF SDR 17.1 MILLION (US$25.0 MILLION EQUIVALENT) TO THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA FOR AN INFORMATION AND COMMUNICATION TECHNOLOGY ASSISTED DEVELOPMENT PROJECT (ICTAD) February 11, 2010 Transport, Water and ICT Sector Department Ethiopia Country Department Africa Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective May 31, 2010) Currency Unit = Ethiopian Birr (ETB) 1.00 ETB = USD USD 1.00 = ETB 1.00 SDR = USD FISCAL YEAR: July 8 July 7 Vice President: Obiageli Ezekwesili Country Director: Kenichi Ohashi Sector Manager: Phillipe Dongier Project Team Leader: Bobak Rezaian ICR Team Leader: Bobak Rezaian ICT Main Author: Eduardo Talero BIC CAS CIDEV CR CRTC CSC CTIT DED DMF EBA EICTDA ETA ETC FMR FEMSEDA GoE IBRD ICR ICT ICTAD ABBREVIATIONS AND ACRONYMS Business incubation program Country Assistance Strategy Community ICT development program Community radio program Computer Refurbishment and Training Center Civil service college College of Telecommunication and Information Technology German Development Service De-manufacturing facility Ethiopian Broadcasting Authority Ethiopian Information and Communication Technology Development Agency Ethiopian Telecommunications Authority Ethiopian Telecommunications Company Financial monitoring report Federal medium and small enterprise development agency Government of Ethiopia International Bank for Reconstruction and Development. Includes IDA as one of its component institutions. Implementation Completion Report Information and communications technologies Information and Communication Technology Assisted Development Project.

3 ISP Internet service provider ISR Implementation Supervision Report (internal IDA report) M&E Monitoring and evaluation MIT Mekele Institute of Technology MTR Mid-term review (April 2008) PAD Project appraisal document PASDEP Plan for Accelerated and Sustained Development to End Poverty PDO Project Development Objective PIC Productivity Improvement Center PMU Project management unit RF Results framework SDPRP Sustainable Development and Poverty Reduction Program TOT Training of trainer program TVET Technical and Vocational and Educational Training Schools Program Woreda District-level administrative unit managed by local government

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5 COUNTRY Project Name Ethiopia: ICT Assisted Development - ICTAD CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome: Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower s ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents Annex 10 - List of people met Annex 11 - Developments in Ethiopia s Telecom Services MAP

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7 A. Basic Information Country: Ethiopia Project Name: ET-ICT Assisted Dev SIM (FY05) Project ID: P L/C/TF Number(s): IDA ICR Date: 02/17/2011 ICR Type: Core ICR Lending Instrument: SIM Borrower: Original Total Commitment: Revised Amount: XDR 10.7M Environmental Category: C Implementing Agencies: Ethiopian ICT Development Agency Cofinanciers and Other External Partners: German Development Services FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA XDR 17.1M Disbursed Amount: XDR 10.7M B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 06/12/2003 Effectiveness: 06/24/ /24/2005 Appraisal: 03/23/2004 Restructuring(s): 12/10/2008 Approval: 09/16/2004 Mid-term Review: 03/24/ /24/2008 Closing: 05/31/ /31/2010 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory High Moderately Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory Overall Bank Overall Borrower Moderately Satisfactory Performance: Performance: Moderately Satisfactory i

8 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project Yes at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No Moderately Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): Satisfactory None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General education sector General industry and trade sector General information and communications sector General public administration sector Health Theme Code (as % of total Bank financing) Decentralization Education for the knowledge economy Other human development Rural services and infrastructure Trade facilitation and market access E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Kenichi Ohashi Ishac Diwan Sector Manager: Philippe Dongier Nicolas M. Gorjestani Project Team Leader: Abdolreza B. Rezaian Abdolreza B. Rezaian ICR Team Leader: ICR Primary Author: Abdolreza B. Rezaian Eduardo Talero ii

9 F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) To assist communities to improve their livelihood through the use of appropriate Information and Communication Technologies (ICT) that facilitate increased access to markets, development information, and public services. To achieve this objective the project will enable public and private sector providers of information, goods and services to improve the quality and quantity of their products through the efficient and effective use of ICTs. Revised Project Development Objectives (as approved by original approving authority) To increase the use of Information and Communication Technologies by Communities in project Target Areas. (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years 1. Aggregate number of private entities that offer ICT services - AFTER RESTRUCTURING ICT businesses countrywide: Total baseline value of 5714 (aggregated from Indicator No. 10) ICT Telecenters/Call centers: By 2009, 15% avg. businesses 184 annual growth in countrywide: ICT businesses Cyber cafes:159 project areas after countrywide: Tele service implementation of (aggregated (102% of target). resellers:5026 policy reforms. from Indicator Computer No. 10) maintenance:159 Computer trg:141 SW development:45 Lic. com. Radio:0 Date achieved 03/31/ /31/ /10/ /31/2010 Achieved 100%. The combined effects of policy & standards framework, Comments extensive vocational training imparted, business incubators, community centers (incl. % and radios created under the project contributed to the growth of the ICT services achievement) sector beyond targets. Indicator 2 : 2. Average monthly number of ICT users in project areas/communities - AFTER RESTRUCTURING Value quantitative or Qualitative) Date achieved 03/31/ /31/ /31/ /31/2010 iii

10 Comments (incl. % achievement) Indicator 3 : Value quantitative or Qualitative) Achieved 725%. Achievement is particularly important bec. it validates demanddriven approach to formation of com. centers & value of the centers to affected com. country-wide. Project also overachieved in # of com. centers & com. radios created. By 2009, in the areas covered by the project business transaction cost for users of ICT assisted services reduced by 30% - ORIGINAL BEFORE RESTRUCTURING Service/Value 3-min local-fixed: min local-mobile: min Intnl.-Fixed: min Intnl.- Mobile:32.16 Internet/minute:0.32 Internet Subscription: Service/Value 3-min local- Fixed: min local- Mobile: min Intnl.- Fixed: min Intnl.- Mobile:22.51 Internet/minute:0.2 0 Internet Subscription: Service/Value 3-min local- Fixed: min local- Mobile: min Intnl.- Fixed:30 3-min Intnl.- Mobile:32.16 Internet/minute:0.2 4 Internet Subscription: Date achieved 03/31/ /31/ /31/2009 Fully Achieved. Except for local & int'l mob. charges, general trend was tariff Comments cost reductions (-35.47% AVE), particularly if accum. inflation (80%+) is (incl. % considered. This Ind. was dropped at restructuring as the project had no leverage achievement) to pursue it. By 2009, in the areas not covered initially by the project, at least 20% of the Indicator 4 : initiatives supported by the project were mainstreamed, transferred or adapted to other locations. ORIGINAL BEFORE RESTRUCTURING Value quantitative or Qualitative) 0 8 Community center initiatives were adopted by ETA and 15 centers by EICTDA in non-project locations. Rural connectivity initiatives were taken up by ETC and far exceeded the original project targets. Date achieved 03/31/ /31/2009 Comments Fully Achieved. Although indicator was rather imprecise, 4 of 5 critical project (incl. % initiatives (com. centers, rural tel. services, business incubation, & SME trg in achievement) ICT) were expanded to areas not originally covered by the project. iv

11 (b) Intermediate Outcome Indicator(s) Indicator Indicator 1 : Value (quantitative or Qualitative) Original Target Values (from Baseline Value approval documents) Comp 1 Policy & Institutional Support National IT Policy developed 0 1 Formally Revised Target Values Actual Value Achieved at Completion or Target Years National ICT Policy approved by Council of Ministers in July, National ICT Security policy and guidelines were also completed, not yet adopted. Date achieved 09/16/ /31/ /31/2009 Comments (incl. % Achieved: 100% achievement) Indicator 2 : Comp 1 Policy & Institutional Support National ICT Standards and guidelines approved Value 4 standards and 5 Indicator (quantitative 0 guidelines adopted restated (see or Qualitative) by below) Date achieved 09/16/ /31/ /31/2010 Comments (incl. % achievement) Comp 1 Policy & Institutional Support Indicator 3 : EICTDA proposes standards for local language script; keyboard layout; data exchange; and other ICT related standards and regulations Value (quantitative or Qualitative) 0 14 standards 14 ICT standards and 3 and 3 ICT guidelines guidelines were including completed, Standards for including 6 local script, language standards, localization of between May and software September 2008 applications, (see Annex 2, keyboard Subcomponent 1.2). layout etc. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) v

12 Indicator 4 : Value (quantitative or Qualitative) Comp 1 Policy & Institutional Support Ethiopian ICT Development Authority (EICTDA) effectively Fulfills its mandate as stipulated in its 2003 proclamation. None defined Indicator dropped at restructuring. Replaced by one above. The EICTDA emerged from the Project with strength and capacity that can hardly bear comparison with the situation at the start of the Project when the Agency had just been created (see Report Section 3.5 (b)). Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) Indicator 5 : Comp 1 Policy & Institutional Support Reduced Import Tax for ICT equipment Value (quantitative or Qualitative) 40% 10% 0% 100% tariff reduction was approved for investment-related imports only. Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Partially achieved: 50% achievement) Comp 1 Policy & Institutional Support Indicator 6 : Laws enacted by 2006, allowing competitive provision of connectivity and ICT related goods and services Value (quantitative or Qualitative) 0 End of No specific target laws defined Indicator dropped at MTR. National Electronic Transaction Law, National Data Protection Law, e- Commerce Law, e- Signature Law, Computer Misuse and Cyber Crime Law all drafted by the end of the project and undergoing legislative process. Date achieved 09/16/ /31/ /31/ /31/2010 Comments Partially achieved # 40%. No specific law drafted for competitive provision of vi

13 (incl. % achievement) Indicator 7 : Value (quantitative or Qualitative) connectivity. Other laws drafted in Comp 1 Policy & Institutional Support Policies, laws and regulations adopted governing the protection and interests of copyrights and intellectual property rights of indigenous knowledge bearers and providers. 0 End of No specific target laws/policies defined Indicator dropped at MTR. Not achieved # 0% Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Not achieved # 0% achievement) Comp 1 Policy & Institutional Support Indicator 8 : Ethiopian Telecommunications Corporation (ETC) effectively provides backbone services at competitive rates, Value (quantitative or Qualitative) None defined Indicator dropped at restructuring #Backbone infrast.: 10,000 Km. of fiber optics line. #Network capacity in place: 15m mobile; 4m fixed line & 1.2 m. internet. #Subscribers: 8.67m. mobile; 1.18m. fixed line & 0.1m. internet. #Tariff reduction: Avg of 35.47% s on tracked services Date achieved 09/16/ /31/ /31/2010 Comments (incl. % achievement) Partially Achieved: 50%. Expansion of infrastructure is beyond all expectations. Actual service improvements by end of project are small. Tariff reduction is significant. Comp 1 Policy & Institutional Support Indicator 9 : ITIT produces sufficient technicians & skilled workers concomitant wi/its own & private sector demand in area of Network design, mngt & op. & mob. phone switching Value (quantitative or Qualitative) Indicator dropped at restructuring 164 TVET Instructors completed TOT on Basic PC maintenance. Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Partially Achieved: 36%. achievement) vii

14 Indicator 10 : Value (quantitative or Qualitative) Comp 1 Policy & Institutional Support ETA effectively regulates and enforces national policy by 2007 (spectrum management, licensing, new technologies etc.) 0 At least 2 private ISP licenses per annum starting 2007 ETA develops a licensing scheme for ISPs consistent with international good practice (2007). ETA established a licensing scheme for ISPs and 5 ISPs were licensed on 28 Feb 2007 after several date extensions. Date achieved 09/16/ /31/ /31/ /31/2010 Comments Partially achieved: 40%. Licenses are only for dial-up service and none were (incl. % operational by end of project. achievement) Comp 1 Policy & Institutional Support Indicator 11 : Ethiopian Broadcasting Agency (EBA) develops a radio licensing scheme by 2005, effectively supports applicants to meet license requirements. Value (quantitative or Qualitative) 0 Radio licensing scheme completed by end of 2005 EBA develops an effective licensing scheme for community and commercial radios consistent with international good practice. #Radio licensing scheme completed in early #New broadcasting proclamation No 533/07 issued 23 Jul 2007 addressing the development of Community Radio. # 8 broadcasting directives, 1 broadcasting law completed between July,2007 & end of Project. Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) Comp 1 Policy & Institutional Support Indicator 12 : PMU monitoring provides policymakers recomm. regularly & on demand related to inst., leg. & pol.env. impact of pol. ref. ICT & other sect. impact of ICTAD supp. measures impact analysis of trg skilled ICT work force Value Indicator Strong M&E No M&E existed at (quantitative dropped at system was setup project start or Qualitative) restructuring. under the project. Date achieved 09/16/ /31/ /31/2009 Comments (incl. % achievement) Partially Achieved: 70%. See Section 2.3 for assessment of strengths and weaknesses. Indicator 13 : Comp 1 Policy & Institutional Support viii

15 Value (quantitative or Qualitative) Effective outreach and communication structure in place by end 2005 provides transparent, effective and efficient management of measures supported under ICTAD. No outreach program at project start Indicator dropped at restructuring. #Over 30 awareness raising events for over 3,000 people organized. #Mid-term and Project closing workshops held to transparently evaluate project results with all stakeholders. #General information on ICTAD project disseminated: Date achieved 09/16/ /31/ /31/2009 Comments (incl. % Achieved 100% achievement) Comp 1 Policy & Institutional Support Indicator 14 : Effective and efficient management of ICTAD supported activities in place by end Accomplishment of most objectives is best indicator of Value Indicator overall project PMU fully staffed (quantitative PMU did not exist dropped at management by end of 2005 or Qualitative) restructuring. performance. Staffing was in place by end of Date achieved 09/16/ /31/ /31/ /31/2009 Comments (incl. % Achieved 100% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 15 : services and users enabled to access and utilize them Number of people trained by supported ICT training centers Value (quantitative or Qualitative) 0 1,000 by end of project 3,283 people trained at CIDEV centers and 50 by CRTC. Date achieved 09/16/ /31/ /31/2010 Comments Achieved 300% (incl. % ix

16 achievement) Indicator 16 : Value (quantitative or Qualitative) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted services and users enabled to access and utilize them Trainers trained in selected TVET centers, 0 At least 400 by 2009 Indicator restated. See below 382 trainers had been trained by Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 95.5% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 17 : services and users enabled to access and utilize them TOT program participants getting an ICT trainer certificate 576 certified Value trainers, additional 600 by end of (quantitative training sessions project or Qualitative) were on-going by end of project.. Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 96% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 18 : services and users enabled to access and utilize them Technician training labs established in existing TVET#s Value (quantitative or Qualitative) 0 At least three labs established in in 3 TVET colleges 15 labs were established: 2 each in TVET colleges in Tigray, Oromia, SNNP and Amhara regions. One training lab in each of the other 7 regions. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 500% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 19 : services and users enabled to access and utilize them ICT SMEs supported within the context of ReMSEDA (PIC added in Oct, 2006) Value Indicator restated. See trained by operators 100 operator (quantitative 0 trained by or Qualitative) below Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 287% achievement) x

17 Indicator 20 : Value (quantitative or Qualitative) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted services and users enabled to access and utilize them Staff from s SMEs trained in use and maintenance of ICT equipment by end of project 645 operators trained by end of project, 363 by PIC and 282 by FEMSEDA and CTIT. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 322.5% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 21 : services and users enabled to access and utilize them ICT Incubators in place to provide a conducive environment for private ICT startups. Value (quantitative or Qualitative) 0 2 incubators by 2007 with at least 20 startups Four ICT business incubators were created and have started operations with 43 private ICT start-ups. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 22 : services and users enabled to access and utilize them Operational rural community phones ETC had installed Value Indicator At least 3,000 by wireless (quantitative 0 dropped at 2009 village phones by or Qualitative) restructuring the end of Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 356% by the Government achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 23 : services and users enabled to access and utilize them Community ICT development projects funded, evaluated, and screened for scaling up Value (quantitative or Qualitative) 0 At least 40 centers by end of 2009, 65 community Number of centers (54 under operational CIDEV and 11 CIDEV- Centers with a business plan in place under the Ministry of Youth and Sports Affairs) were fully operational by the xi

18 end of Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 162% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 24 : services and users enabled to access and utilize them Local facility for computer remanufacturing is established. Value (quantitative or Qualitative) 0 One facility by 2006 Local facility The RTC facility at for computer Akaki is completed, refurbishment operational and and technician with reliable supply training is and sales established arrangements to and achieve self operational sustainability. Date achieved 09/16/ /31/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 25 : services and users enabled to access and utilize them Number of households using radio and TV as measured by ITU 6 million. Value 3,5 mil. (2004 ITU data) (Estimated by ITU (quantitative 6,000,000 as 4.86% of 15.1 or Qualitative) mil. households). Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 100% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 26 : services and users enabled to access and utilize them Number of mobile subscribers (post-paid + Pre-paid) as measured by ITU Value (quantitative or Qualitative) 155,534 (2004 ITU data) 1,300,000 4 million subscribers according to ITU#s 2009 statistics. (8 million according to ETA) Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 307 % achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 27 : services and users enabled to access and utilize them Number of internet users as measured by ITU Value 113, ,000 according 300,000 (quantitative (2004 ITU data) to ITU#s 2009 xii

19 or Qualitative) statistics. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 133% achievement) Comp 2 Public and Private Sector Providers enabled to provide ICT assisted Indicator 28 : services and users enabled to access and utilize them Number of Community Radios operational Value (quantitative or Qualitative) community radios established and operational, one more being set up. Date achieved 09/16/ /31/ /31/2010 Comments (incl. % Achieved 175 % achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 05/12/2005 Satisfactory Satisfactory /13/2005 Satisfactory Satisfactory /01/2005 Satisfactory /25/2006 Satisfactory Satisfactory /14/2006 Satisfactory Satisfactory /16/2007 Satisfactory Satisfactory /11/2007 Moderately Satisfactory Moderately Satisfactory /28/2008 Moderately Satisfactory Moderately Satisfactory /24/2008 Moderately Satisfactory Moderately Satisfactory /30/2008 Moderately Satisfactory Moderately Satisfactory /09/2009 Moderately Satisfactory Moderately Satisfactory /18/2009 Moderately Satisfactory Moderately Satisfactory /29/2010 Moderately Satisfactory Moderately Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO Amount Disbursed at Restructuring in USD millions 12/10/2008 N MS MS 8.66 IP Reason for Restructuring & Key Changes Made Rural connectivity component was taken up directly by government and cancelled from xiii

20 Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions Reason for Restructuring & Key Changes Made the project. I. Disbursement Profile xiv

21 1. Project Context, Development Objectives and Design Context at Appraisal Alignment with Country Development Objectives. 1. With per capita Gross National Income of USD 160 Ethiopia ranked 169 out of 177 countries in the United Nation s Human Development Index (HDI) for Little progress had been achieved since the turn of the century in terms of the percentage of population living below the poverty line which stood at 44 per cent of the estimated 67 million population in Ethiopia therefore ranked among the ten poorest countries of the world. In early % of its estimated 65 million population lived in rural areas and had some of the lowest levels of life expectancy, literacy rate and access to primary health care. 2. The Project arose from explicit national strategy and coordinated Government request to all developing partners for support in building up the capacity of the economy to solve its poverty and inequality problems and to meet its development goals. GoE saw Information and Communication Technologies (ICT) as an enabler of efforts to achieve sustainable development and poverty reduction through support of the capacity building pillar of the country s sustainable development and poverty reduction program (SDPRP) adopted in The project was designed to support SDRP s National Capacity Building Sub Program to: (i) strengthen the policy, regulatory and legal framework for use of ICT; (ii) improve organizational effectiveness and develop human resources of core ICT sector agencies; and (iii) build capacity to build capacity through a country-wide training of trainers (TOT) program. Furthermore, under the ICT Capacity Building objectives of the sub program, the project included a component to expand community-based ICT services and another to support the private ICT services industry. 4. In alignment with the SDRP, the project was also supportive of the Bank s Ethiopia Country Assistance Strategy (CAS) goals of (i) enhancing pro-poor growth (ii) fostering economic growth by supporting the creation of a favorable environment for more active participation of the private sector in all aspects of ICT sector development and (iii) strengthening the key ICT sector agencies. Sector background 5. At the time of appraisal (March, 2004) Ethiopia lacked a coherent policy, standards or guidelines for use of ICT in the public sector. The Government had prepared an ICT Policy paper in line with the SDRP which was being reviewed by the Council of Ministers. Standards to display information in local languages were non-existent. High 1 The ICR s length is due to the project s numerous implementation partnerships, institutional outputs and previously untried activities. 1

22 tariffs (40%) on ICT equipment powerfully constrained the growth of the sector and no legislation was in place to enable electronic transactions in the economy. 6. The government had recently (2003) established the Ethiopian ICT Development Agency (EICTDA) as the national policy advocacy and coordinating body for ICTs, and it was in the process of strengthening the management teams of the other two core sector agencies, the Ethiopian Telecommunications Authority (ETA) and the Ethiopian Broadcasting Authority (EBA). 7. Project baseline surveys taken in March 2006 indicated that the size of the ICT services industry in Ethiopia was very small: Not counting telephone resellers, there were only about 688 companies (45 in software development) of which approximately 95% had less than 20 employees and less than US$ 115,000 investment capital. About 46% of the owners of these companies considered the weak domestic market their main growth constraint and only 11% thought that poor ICT infrastructure was the culprit. 8. Telecommunication policy at project effectiveness (June 2005) was characterized by monopolistic provision of all services and consequent limited independent regulatory power over the monopoly operator. However, plans were under consideration to license private sector providers of rural connectivity, Internet access and community radio. 9. Ethiopia s teledensity (subscribers per 100 inhabitants) in 2004 was 0.54, one of the lowest in Sub-Saharan Africa. There were only 340,000 fixed telephone lines in use, 90,000 mobile subscribers, 6,000 dial up Internet accounts and only a handful of broadband subscribers. All were concentrated in Addis Ababa. Rationale for Bank assistance 10. The Bank was viewed to bring to the table, along with financial assistance: (i) a cross-sector perspective to the use and growth of ICT, (ii) international experience and knowledge sharing on the same and (iii) design advice and stakeholder convening influence on innovative schemes to apply ICT at the grassroots level. 1.2 Original Project Development Objectives (PDO) and Key Indicators 11. The original objective of the project was defined on page 3 of the PAD as: to assist communities to improve their livelihood through the use of appropriate Information and Communication Technologies (ICT) that facilitate increased access to markets, development information, and public services. This objective, the PAD added in the same breath, was to be achieved by enabling the public and private sector providers of information, goods and services to improve the quality and quantity of their products through the efficient and effective use of ICTs. This formulation including both what and how aspects was somewhat ambivalent as a definition of a project objective. 12. Two of the three results indicators for the PDO referred to the how aspect and only one attempted to measure improved livelihood outcomes more directly through observable reductions in the cost of services. Thus from the start project designers realized that measuring project success directly through improvements in the livelihood 2

23 of ICT-using communities was not realistic or credible within the time span of the project. They chose to measure a proxy- the supply response of the ICT services industry as the best indicator of accomplishment of project objective. This decision is discussed more extensively in Annex 3. The important point here is to note that from the start the project was focused on capacity building to bring about a powerful supply response in the number and geographic spread of ICT service organizations. 1.3 Revised PDO and Key Indicators, and reasons/justification 13. Taking the above (Section 1.2) into account, since the official project documentation and internal Bank Implementation Supervision Reporting (ISR) system consistently recorded the original objective of assisting communities to improve their livelihood, this contributed to a growing sense of mismatch between PDO and actual project design and results framework. 14. Therefore during the April 2008 mid-term review (MTR) of the project it was agreed to revise the PDO to make it (i) directly relevant to PASDEP 2 and CAS; (ii) more focused and measurable; (iii) attainable project components and activities. The revised objective to increase the use of Information and Communication Technologies by Communities in project Target Areas was formalized through an amendment to the Credit Agreement on January 29, Strictly speaking, the increased use of ICT by targeted communities is still a proxy as it does not by itself demonstrate improved livelihoods. Nonetheless, it is a proxy that PASDEP and CAS and, as will be seen in Annex 3, the entire international community accept as valid and worth pursuing by itself. The GoE and IDA then paired this proxy with the one previously used in the PAD formulation of the PDO (supply response, see above) creating a much stronger and realistic Results Framework (RF) for the project. 16. Along with the reworded PDO, the PMU and Bank teams started a process of refinement of the results framework from MTR in April 2008 to the last ISR of the Project written in June, Several versions of the RF were produced. The one presented in the Data Sheet for this ICR corresponds with the manner in which the Project was monitored since MTR. 1.4 Main Beneficiaries, 17. The project targeted both individual citizens and organizational entities as beneficiaries of its various program areas, as depicted in Table 1. Individual/Community No. Institutional Beneficiaries No. Beneficiaries Trained civil servants: 224 ICT Sector agencies: 6 Women: Women groups 2 Farmers & Pastoralist associations : 4 2 Plan for Accelerated and Sustained Development to End Poverty, September,

24 Individual/Community Beneficiaries No. Institutional Beneficiaries No. Farmers and pastoralists 70,000+ Youth associations : Youth /month Disabled assistance associations: 6 6 Disabled and at risk NGO s and other: 21 (HIV) individuals: Regional Capacity Building bureaus 11 Community members at large TVET teachers 596 TVET colleges: 15 SME employees: 645 Startup micro ICT businesses: 60 CIDEV/CR employees 350 Community radio associations 8 CIDEV / CRTC trainees 3,333 Training organizations 3 Awareness raising participants 2,752 EBA staff trainees Original and Revised Components Table 1. Direct beneficiaries of ICTAD 18. The Project was structured into two components as shown in Box 1. Canceling of Subcomponent 2.1 for Rural Connectivity upon project restructuring, discussed next, did not change the Project component structure. Component Project Components 1 Component one: Policy and Institutional Support (USD 12.6 m) 1.1 Policy, regulatory and legal framework 1.2 Development of ICT Standards 1.3 Institutional Strengthening Ethiopian ICT Development Agency-EICTDA Ethiopian Telecommunication Agency (ETA) Ethiopian Broadcasting Authority (EBA) College of Telecommunication and Information Technology (CTIT) 1.4 Project Management 2 Component Two: Application and Community Support (USD 17.4 m) 2.1 R C 2.2 ICT Private Sector Development (Business Incubation) -BIC Computer Refurbishment and Training Center (CRTC DMF) 2.3 ICT Training of Trainers TVET-TOT 2.4 Community ICT Development CIDEV and Community Radios -CR 1.6 Other significant changes Box 1. ICTAD Project Component Structure 19. Cancelling of Rural Connectivity subcomponent. This subcomponent was designed as a pilot test for provision of 3,000 rural telecommunication points of service through partnerships between the monopoly operator, Ethiopian Telecommunications Company (ETC), and private sector cooperatives in rural areas. By May 2006 the GoE 4

25 had decided to install five times as many rural telephones in connection with a backbone expansion contract signed with the Chinese company ZTE. This led to agreement at midterm review (February, 2008) to cancel this part of the credit and waive the related dated covenant for issuance of community telephone licenses. 20. Change in the role of DED. The partnership with the German Development Service (DED) was intended to provide field advisors for the various program areas and for the PMU management, with a primary objective of knowledge transfer. Due to staffing shortages at the PMU and capacity gaps at the partner agencies, particularly the EICTDA, DED advisors role had a larger component of direct implementation work than originally planned. Section 5.2 (b) discusses how this worked. 21. Decentralization of the Business Incubator Program. The BIC program originally targeted the creation of an incubator in Addis Ababa. However, the municipal government could not provide a building at reasonable cost, as required. The program was then successfully changed to four regional capitals were as many business incubators were created. In the final 15 months of project the BIC program turned back to Addis under a virtual incubation model for 17 small companies. 2. Key Factors Affecting Implementation and Outcomes 22. In its three broad areas of activity policy and institutional support, private sector support, and community ICT support - the ICTAD Project achieved all its development objectives and met and exceeded its project development indicators (see Data Sheet, Section F). The project assisted poor, disabled, isolated and HIV-exposed people in Ethiopia (see full list of beneficiaries in Table 1) to access and use ICT and for the first time become part of the information economy. 23. The benefits provided by the project include access to ICT; general computer literacy; specialized technical skills; access to information; capital, technology and facilities; direct employment, and in some cases international exposure and academic training. The project also had extensive and somewhat unexpected social benefits of community empowerment; volunteerism; gender equity; empowerment of the youth and interest in access to technology by people in remote and poor areas of the country. 24. The project leaves behind 65 community ICT centers throughout the country serving over 70,000 customers per month, 7 community radios, 4 regional ICT business incubators with 55 startup company tenants, and one environmentally green, state of the art computer refurbishment and de-manufacturing facility at par with the best in Africa. It provided training to over 9,000 people, strengthened the key ICT sector institutions and developed the initial body of ICT policies and standards of an information economy. 25. Success factors. The main factors accounting for project success were: Consistency of support, leadership and commitment of the GoE to project objectives, as discussed in Section 5.2 (a). 5

26 Decisive intervention by EICTDA management to confront serious implementation roadblocks encountered as a result of the innovative nature of many project activities being tried for the first time in the country. Effective project management and outstanding performance of the PMU, as discussed under Section 5.2(b). In-depth, long-term and field-based advisory support by DED as discussed under Section 5.2 (b). High quality of project implementation support provided by IDA with a core staff team that remained unchanged from the design to the completion of the project. Extraordinary enthusiasm and participation of project beneficiaries and high demand for project interventions. Strong support by regional governments in particular by Capacity Building Bureaus and TVET colleges. 2.1 Project Preparation, Design and Quality at Entry 26. Project preparation involved spirited discussion within the Bank on whether to support an operation to leverage ICT for economic development without centrally addressing reform objectives in the telecommunication sector. The concern was that without competition the ICT sector would not be free to expand, services might not improve and costs could remain high thus perpetuating a fundamental development constraint for the economy and a threat to the impact and sustainability of project outputs. The alternate view held that there was a wide field of needs and opportunities for use of ICT as an enabler of development which could be successfully pursued separately from the central telecommunications sector policy reforms. A constructive project could concentrate on human resource and institutional capacity constraints in the sector, address the policy, regulatory and legal framework directly related to those constraints and directly bring ICT to poor communities and micro entrepreneurs. 27. Although by and large the latter view prevailed and was clearly reflected in the Credit Agreement and later validated by project results 3, the project was left with several sector reform objectives that it either could not expect to accomplish or about which it lacked appropriate leverage. While inclusion of these results indicators may have served to accommodate the differing views, it also created confusion on the degree to which project success would be measured by progress on telecommunication sector reform. All but one of the telecom-related indicators were cancelled when the project was restructured in December, 2008 (see Section 5.1.a, Table 5). 3 As shown in Annex 11, the sector did expand during the project period (725% in number of users, 677% fiber optic broadband capacity, 125% growth in fixed line subscribers, 328% growth in Internet subscribers, 461% mobile subscribers) and costs did go down (average of 35% before inflation). However, services did not improve that much, mainly due to network operation problems. 6

27 28. This ICR follows the letter of the Credit Agreement regarding the telecommunications sector reform content of the project being limited to: (i) strengthening of the regulatory agencies; (ii) licensing of community radios; (iii) licensing of Internet service providers and (iv) licensing of rural connectivity providers in partnership with ETC. The ICR nonetheless examined in some detail (see Annex 11) the progress made in telecommunications infrastructure, subscribers, services and tariffs during the Project period. 29. Project design. Project components and activities were logically consistent with the Project s capacity building objectives and highly relevant to the needs of the intended beneficiaries. Five major features of project design account for the impressive and expected lasting impact of project results, albeit also for much of the complexity, initial slow pace of implementation and for the shortcomings that impeded a fully satisfactory rating for the project, as discussed in Section 3: Focus on cross-cutting policy and institutional factors. Component 1 targeted the enabling policy and institutional framework, not specific technology implementation activities, and the strengthening of the coordination and regulatory sector organizations EICTDA, ETA and EBA. Demand-driven, bottom up initiatives were required in beneficiary selection. Principally, community organizations of all kinds were to apply for project support to establish CIDEV centers and Community Radios (CRs). This created ownership of project outputs at the beneficiary level and revealed dramatically the importance attached to ICT by rural, poor, and disadvantaged communities. However, it also increased manifold the complexity and scope of the work of the PMU. Implementation through partnerships. Institutional arrangements for implementation envisioned, in addition to a ring-fenced PMU and an external technical cooperation partnership with DED, multiple implementation partnerships as depicted in Table 2. Each partnership required comprehensive design, negotiation, formalization through MOU, financial control, progress reporting and monitoring, crisis intervention and often technical support. ICTAD Program areas Coordination & Monitoring Management Implementation Project management EICTDA PMU Policy & standards PMU EICTDA EICTDA Institutional strengthening PMU ETA, EBA, ETC, CTIT, EICTDA, CSC Rural Connectivity PMU ETC ETC Private sector development: BIC, CRTC- DMF PMU EICTDA Local governments in Amhara, Oromia, SNNP, Tigray. Capacity Building: Training, TVET TOT PMU EICTDA MoE, MIT, CTIT, FEMSEDA, PIC, Adama university CIDEV, CRs PMU EICTDA Regional CB bureaus, 7

28 ICTAD Program areas Coordination & Monitoring Management Implementation Community organizations Table 2. ICTAD Implementation Partnerships and their intended responsibilities Extensive institution building work. Component 2 for Application and Community Support required institution building work at a scale that far exceeded initial projections of staff and time requirements. Each CIDEV center, community radio, business incubator, and the CRTC-DMF required development of MOU, business plans, building renovation or construction, legal and organizational design, financial procedures, operational manual, ICT systems deployment, staff recruitment and staff training, among others. Long and difficult road travel throughout the country added substantially to the complexity of this project component. Budgetary and implementation flexibility. Project designers recognized the difficulty to predict the detailed course of implementation of the multiple project activities. Thus they allocated project budget formally at the Component level only (PAD Annex 4) thus providing flexibility to shift resources where most needed (such as the unplanned cost of incubator buildings), yet also complicating budgetary control which was sometimes substandard (see Annex 2, Section 1.3.4). 30. The Quality at Entry for the project was very high in most aspects. In particular, the intensive policy dialogue on the capacity building potential of ICT and its relevance to poor communities produced strong Government ownership of and commitment to project objectives. The Quality at Entry study of the Bank in November, 2005 (QAE7) rated ICTAD s overall QAE as satisfactory and its implementation arrangements as moderately satisfactory. 31. Risks. Most risks envisioned in the PAD on the non-restructured areas of the project were adequately assessed and mitigated through effective EICTDA, PMU and IDA management (see Table 3 below). The possible underperformance of implementation partnerships was not envisioned as a risk and in hindsight it was a major issue for the project. Project Risks identified in the Project Appraisal Document PAD Aug/04 MTR Apr/08 End of Project Assessment (May 31st, 2010) Present political priorities will change due to regional conflicts or repetitive and continuous severe droughts. The GoE restricts internationally competitive ICT solutions, access to bandwidth, licensing of other regulatory provisions and service levels. In spite of its assurances the Government does not increase M M H: The Project was restructured and $10 million cancelled due to the Food Crisis Response Program. S S S: The GoE continued to pursue a monopoly policy. Although 4 local ISPs were licensed, they could not start operating due to ETC s operational shortcomings. M S M: ETC has initiated several programs that increased connectivity without 8

29 Project Risks identified in the Project Appraisal Document PAD Aug/04 MTR Apr/08 End of Project Assessment (May 31st, 2010) connectivity and access to communication services through public-private partnerships The government does not agree on a formula that will guarantee competitive bandwidth charges and service levels based on industry standards available in Sub-Saharan Africa ETC s national backboneinfrastructure is not maintained functional to an acceptable level because of lack of technical support, spare parts, etc. A low salary scale leads to a high fluctuation of PMU staff and triggers delays in project implementation. following a PPP model. S S S: GoE still restricts competition in the telecom sector, yet it has reduced charges substantially. Quality of service is deficient. Protection of end user interests by a strong regulator is still missing. S S S: Despite considerably expanding the backbone infrastructure, the ETC has difficulty maintaining the full network operational. This may continue for the near term until the results of ETC s current restructuring efforts bear fruit. S S S: Lower than market PMU staff salaries caused staff attrition. Absorption of PMU staff into the EICTDA is more difficult by the larger differential in compensation. Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligib1e or Low Risk) 2.2 Implementation Table 3. Behavior of major risks identified at Project Inception 32. Startup delays. Board approval, credit signing and project effectiveness were all delayed until GoE could fulfill the conditions for each. Board Approval shifted from 7/27/2004 to 9/16/2004. Project effectiveness was delayed nine months (from 9/30/2004 to 6/24/2005) due to change in procedures (requiring an additional approval of credit agreement by the Council of Ministers) and to difficulty in recruiting the Project manager. Covenant for issuance of ISP licenses by ETA, starting September 30, 2005, was partially fulfilled only by March, 2007 after two postponements requested by Government. 33. Steep learning curve. Major project activities (CRs, CIDEV, BIC and CRTC- DMF) were being done for the first time in the country. Neither the Agency, nor the PMU or the implementation partners had relevant prior experience with them. The learning curve was therefore very long. 34. Difficult activation of partnerships. The numerous institutional partners responsible for project implementation (See Table 2 above) encountered restrictions, changing priorities and contingencies that seriously affected their performance vis-à-vis the project. For example, the EICTDA agency had to embark in a protracted yet high priority business process redesign exercise that absorbed large amounts of staff time. Local governments sponsoring business incubators, CIDEV and CR community 9

30 organizations were unable or late in providing the agreed upon buildings whose construction then took one to two years. In most cases the project had to step in with financing, technical assistance and intensive progress monitoring to break the impasse. 35. Increased workload and understaffing of the PMU. Under these circumstances, the PMU was forced to fill the capacity gaps of various partners. As shown in Table 2, its planned role (and staffing) was only of coordination and monitoring. However, it had to take effective management responsibility and play a major implementation role in CIDEV, CRs, TVET TOT, BIC and CRTC-DMF and Capacity Building program areas. As a result, the PMU was chronically understaffed for its increased responsibilities and the burden fell primarily on the shoulders of the PMU manager and DED advisors. The Bank team had proposed a much larger PMU staffing plan early during project design and this was rejected by the GoE. 36. Uneven implementation pace. The above situation coupled with the complexity of the project (See Section 2.1 Project Design) resulted in initial slow implementation and by MTR only 15.5% of Project funds had been disbursed (after subtracting the balance in the special account). It was very difficult for the PMU to obtain timely and accurate progress reports from implementation partners and this jeopardized effective progress monitoring and timely corrective action (see for example Annex 2, Subcomponent 1.5 on ETA). 37. Staff compensation issues. While project design envisioned compensation packages for PMU and EICTDA consultant staff competitive with the private sector, in practice a gap existed throughout the Project which made recruitment difficult and increased staff turnover. At MTR (March, 2008) the WB team confronted this issue and proposed a minimum compensation schedule for PMU. The EICTDA Director General was able to obtain a performance-based salary bonus for PMU staff which increased morale and possibly stemmed further staff turnover. 38. Effective Mid-Term Review of the Project. The MTR was an in-depth review of implementation issues resulting in reformulation of implementation plans, partnerships, and project activities. It took place 3 months into the second half of the project (March, 2008 instead of December 2007) at the request of the government. The comprehensive action plan agreed upon during the mission had decisive impact and made possible the completion of most project activities by closing date on May 31st, Shortened incubation time for project outputs. Two key agreements during MTR were (i) to reprogram the funds from the canceled Rural Connectivity subcomponent towards strengthening of the CIDEV and TVET subprograms and (ii) to seek extension of the Project by two years in order to give the new entities created by the project (CIDEV, CRs, BICs, CRTC) time to solidify their operations and achieve selfsufficiency. This was in recognition that construction and other delays were already bearing inevitably upon the project implementation schedule. The first agreement was reversed for an important humanitarian reason related to the subsequent food crisis in Ethiopia (see next). The second fell victim to uncertainty about the project s ability to achieve results and to IDA portfolio reorganization by GoE. The parties decided not to 10

31 seek extension of the project and rather to consider a follow up operation once actual project achievements became clear. This left many of the key project outputs without time to achieve self-sufficiency and dependent on finding a new source of financing immediately after project completion. This decision is at the root of the high risk to development outcome rating given to the project (see Section 4). 40. Major changes/restructuring. On December 10, 2008 the IDA Board approved restructuring of ICTAD and eleven other projects in the Ethiopia country portfolio. USD 10 million of ICTAD s funds were transferred to the Ethiopia Food Crisis Response Program as of January 29, 2009 when the corresponding amendment to the Credit Agreement was signed. 2.4 Safeguard and Fiduciary Compliance 41. Financial management was exercised in general compliance with fiduciary requirements and agreed upon procedures, yet with significant shortcomings. The financial accounts of the project were regularly audited and found correct. The final audit was still pending when this ICR was completed. 42. Accounting and financial reporting were barely able to keep up with the past and contributed little to forward-looking financial management. During the first three years when financial activity was low, FM was rated satisfactory or higher by the Bank. After that, there were constant delays in posting of transactions and in production of complete and accurate financial reports. 43. Although FM performance was affected by exogenous factors such as scarcity of foreign exchange, staffing shortages and slow procurement, there were also numerous internal shortcomings such as accounting for transactions outside the computerized system, incorrectly formatted and incomplete financial reports to IDA and un-reconciled balances that persisted until the end of the project and delayed considerably the preparation of this ICR. Annex 2, Section 1.4 discusses FM performance in detail. 44. Procurement performance was substantially different from the first to the second half of the project. There was initial difficulty to recruit staff knowledgeable of World Bank procedures and lack of familiarity with procurement of construction contracts which had not been originally planned. These issues led to one unsatisfactory rating by IDA in October, Corrective action from EICTDA s Director General on down was energetic and effective. Procurement had fully caught up by project closing and the project ended with a well-deserved satisfactory rating in this area. Annex 2, Section 1.4 discusses procurement performance in more detail. 45. Monitoring and Evaluation. The M&E system developed for the project was generally well designed and consistently utilized. It tracks information on the entire IT services subsector, particularly in the rural areas, which is needed by EICTDA for its mandate as sector oversight agency. Unfortunately the system did not collect routine, accurate service statistics from the CIDEV centers. As a result, a major effort had to be 11

32 made for this ICR to collect the data necessary for the assessment of project outcomes. Annex 2, Section 1.4 discusses M&E performance in detail. 2.5 Post-completion Operation/Next Phase Transition and long-term Operation and Maintenance Arrangements 46. All the entities created under the project (CIDEV centers, etc.) started operations two years later than originally planned and did not have time to become self-sustainable from either the managerial or financial points of view: 23% of the 65 CIDEV centers reporting average monthly losses deserve financial support for some time. 15 centers have not yet graduated from their 1-year subsidy period and therefore EICTDA has still a commitment to support them financially. Of those that have graduated, 9% have a low sustainability rating and may need continued support. None of the CRs or the business incubators is financially sustainable yet. TVET TOT program needs public funding, either from the federal or the local level, to continue, since the TVET college system is publicly funded. Even the CRTC-DMF is probably 1 year away from breakeven revenue and requires continued staff salary support until then. The legal status of BIC, CRs and the CRTC, is still unclear. None of the entities have real autonomy to recruit qualified management and pay accordingly. Business incubators, for example, would need managers with far more experience in marketing, production planning and IT. 47. The general approach being taken by the EICTA is to transfer responsibility to local governments for sustaining the newly created entities and nurturing new ones: CIDEV. DED has extended one year the contract of their CIDEV advisor to provide continued coordination of the program, transfer of knowledge to two consultants presently employed by the PMU and to help set up a formal network of centers. The EICTDA is connecting some centers to WoredaNet but it is not clear whether this will be done for all centers and at whose expense. Neither has it been clear whether EICTDA will continue fulfilling its financial commitments with 51 centers not yet graduated from their subsidy period. CRs. DED has extended one year the contract of their CR advisor to provide ongoing coordination and support and help establish an association for peer support, sharing of content and pursuit of common interests by existing CRs. There are no other formal arrangements for continued financial support needed by the CRs both for staff salaries and for indispensable ongoing staff training. BICs. EICTDA will continue supporting the program for one year through its own staff and through the agreed extension of the DED TA contract and the PMU will oversee the completion of ongoing building contracts. The steering and 12

33 financial responsibility for all the BICs will be transferred to the respective local government authorities. However, MOUs with local governments had not been signed at project closing and it is not clear that they will include firm, enforceable commitments for managerial and financial support, which will be needed in varying degrees for at least 2 years. Also, MOUs should spell out assurances that incubators can continue being run as a business, can pursue financial independence and can select clients strictly according to their entrepreneurial potential. TVET TOT. There are no explicit plans to continue financing this program from EICTDA. It will fall to the TVET colleges and their supporting local governments to incorporate ICT training into their curriculum and to finance the continued operation of the computer maintenance and training labs created under the project. However, formal and reliable commitments for this did not exist at project closing. CRTC-DMF. The management contract with private partner was extended for 6 months beyond the project closing. These facilities have very good prospects for financial sustainability and as their owner, EICTDA will continue having overall managerial and financial responsibility for them. Follow up Support and Scale up Program 48. IDA has decided to conduct and in-depth sector study to determine its best strategic position in the ICT sector in Ethiopia in view of the emerging new version of the Government s ICT strategy. IDA is not therefore planning an immediate follow-on operation but neither has it ruled it out, pending the above study. Assuming GoE s interest, such operation has been recommended by past Quality Reviews and is strongly recommended by this ICR in view of the positive results of the project. 49. The Government has offered to cooperate with IDA in the above sector study and has not formally requested a follow-on operation. However, the Government expressed to the ICR mission a firm determination to maintain and scale up the results of ICTAD, particularly the CIDEV and CR programs. 3. Assessment of Outcomes Rating: Satisfactory 50. Regular rating method being used in spite of revised project objectives. IDA guidelines provide for a special approach to rating projects with formally revised objectives. Although technically this was case with ICTAD, application of the special rating approach was not deemed appropriate. Measures of project results are equally valid before and after restructuring. The cancellation of the Rural Connectivity component did not really change the nature and course of the Project since (i) it only cancelled the dormant subcomponent and reallocated its associated budget along with other largely unused project funds and (ii) the expected benefit from access to telephones in 13

34 3,000 rural communities was still pursued, and over achieved, through installation of over 11,000 rural telephones directly by the ETC. Neither the underlying development objective nor the fundamental activities of the project were changed when the PDO was reformulated at project restructuring. The change of PDO removed ambiguities and strengthened the practicality and credibility of the RF but did not change the fundamental development objective of the project or its components. 3.1 Relevance of Objectives, Design and Implementation Relevance of Objectives: Rating: Satisfactory Country Development Strategy. In September 2006 the GoE adopted a Plan for Accelerated and Sustained Development to End Poverty (PASDEP) which is Ethiopia s guiding strategic framework for the five-year period 2005/ /10 and therefore updates the SDPRP of 2002 according to which ICTAD was formulated. 52. Under PASDEP the project objectives and results are more directly linked to economic development and are therefore more relevant to national priorities. In PASDEP the GoE states that exploiting ICT is central to promote growth and reduce poverty, creating new jobs, new business opportunities, to modern education, and to improving the effectiveness of government administration and service delivery. Therefore, a major priority is being attached in the coming five years to leap-frog forward, by building a major ICT backbone and affordable local-level access to ICT ICTAD contributes directly to two of the five elements of the ICT strategy in PASDEP 6 and indirectly to another two, as follows: Direct contribution (i) Promoting human resource development in the ICT field (through the CIDEV, TVET and CRTC program areas) (v) Creating the enabling legal and regulatory framework (through the namesake component of the project). Indirect contribution (ii) Mainstreaming the use of ICT in all sectors of the economy, in the administration of government, and in the education system (through the CIDEV, CR, BIC and CRTC) (iii) Developing the necessary telecommunications infrastructure (through strengthening of the ETA) 54. World Bank Country Assistance Strategy The current Bank CAS includes two core outcomes to which the ICTAD project contributes either directly or indirectly as explained below. 4 Please see Annex 2 for more detailed discussion and examples of the arguments made in support of this rating. 5 Ethiopia: Building on Progress A Plan for Accelerated and Sustained Development to End Poverty (PASDEP) (2005/ /10), Volume I, pg Ibid. 14

35 CAS Core Outcome/ Indicator 9. Reduce cost of Internet Service Cost of broadband and dialup Internet services to decline by 40% and 20%, respectively, between 2008 and 2011." At least 5 private Internet service providers (ISPs) operational Achievement ( ) The monthly cost of dial up internet connection (with 600 minutes free) went down 33% from 60 birr to 40 Birr. The broadband cost (2 Mbps ADSL connection) went down from 47,479 birr to 10,747 birr (77% reduction) - according to ETC data. These achievements are not attributable to ICTAD. However, they demonstrate that, with respect to the telecommunications sector, GoE and the Bank agree on sector objectives, if not fully on reform strategies. Three ISPs were licensed under ICTAD but could not achieve operational status. 16. Greater use of community radios for improved service delivery. At least 10 Woredas with community radio stations in operation. Seven community radios have been set up and made operational under ICTAD. 55. The CIDEV centers and community radio program areas contribute directly to the service delivery take-off envisioned by the CAS as one of the central development challenges of the country 7, as shown in below. Properly enabled through capacity building and revenue sources, CIDEV centers and CRs can also help in the decentralization of public services 8. CAS Core Outcome/ Indicator Achievement ( ) 13. Increase delivery of key services: malaria control, HIV/AIDS prevention Percentage of young people (age 15-24) with understanding on how to prevent HIV/AIDS transmission increases from 67% of women and 54% of men in to 75% overall by 2009/ Improve performance of the public service Woreda/City benchmarking surveys show improving perception of integrity and Five of the 65 CIDEV centers are run by HIV/AIDS prevention associations. All centers can be used to disseminate related information. By design the CIDEV and CR programs mobilize the energies of civil society 7 Ethiopia CAS, pg Ditto, pg. 13, par

36 CAS Core Outcome/ Indicator Achievement ( ) performance of public service. organizations (CSOs) and therefore can help to strengthen the voice of common citizens, as well as supplement governmental capacity in service delivery. 24. Greater capacity of local government to engage with citizens for more responsive services Procedures and skills for citizen CIDEV centers can be used as collection engagement mechanisms for citizen feedback on local government performance. 25. Ethiopian citizens are empowered by and engaged in development processes Increased voice of the poor and women within communities results in better targeting of local investments. Four of the CIDEV centers are run by women associations and virtually all serve poor communities. A majority of the CIDEV centers (52%) directly enhance the economic empowerment of women and youth through access to ICT and ICT training. Relevance of Design: Satisfactory 56. All project interventions were directly conducive to achievement of both original and modified project development objectives. Section 2.1 (Project design) discusses some of the innovative, forward-looking and poverty-oriented features of the design of this project which made it highly relevant to Ethiopia and a likely example of international good practice. 3.2 Achievement of Project Development Objectives: Satisfactory 57. In its three broad areas of activity the Project achieved its development objectives and met and exceeded its project development indicators as formulated both before and after re-structuring (see Table 4). The benefits provided by the project to its multiple direct beneficiaries (listed in Table 1) include access to ICT; general computer literacy; specialized technical skills; access to information; access to capital, technology and facilities; direct employment and in some cases international exposure and academic training. The project also had extensive and somewhat unexpected social benefits of community empowerment; volunteerism; gender equity; inclusion of persons with disabilities and at risk of HIV; empowerment of the youth and extraordinary awareness and interest in access to technology by people in remote and poor areas of the country. 58. At the policy and institutional level the project developed a foundation of policies, standards and guidelines for use of ICT in the economy (see Annex 2, Table 7). The project did not do something equivalent for provision of telecommunication services in the economy since this was not its agreed PDO (see Section 3.4 below). At the institutional level the project strengthened the key ICT sector agencies, notably the EICTDA and the EBA. 16

37 59. The project also mobilized a supply response of the ICT industry through countrywide technical training in computer maintenance and networking and by establishing ICT business incubators in four regions. PDO Indicator Result After Re-Structuring of Project 1. Aggregate number of Achieved 100%. The combined effects of the policy and private entities that offer standards framework, the extensive vocational training imparted, ICT services the business incubators, the community centers and the community radios created under the project contributed to the growth of the 2. Average monthly number of ICT users in project areas/communities Before re-structuring of Project By 2009, in the areas covered by the project business transaction cost for users of ICT assisted services reduced by 30%. By 2009, in the areas not covered initially by the project, at least 20% of the initiatives supported by the project were mainstreamed, transferred or adapted to other locations. ICT services sector well beyond the targets set for the project. Achieved 725%. This achievement is particularly important because it validates the demand-driven approach to formation of community centers and the value of the centers to the affected communities country-wide. The project also overachieved in the number of community centers and community radios created. Fully Achieved. With the exception of international, local and mobile charges which did not change, the general trend was of tariff cost reductions ( % average), more if accumulated inflation during the period (80 %+) is considered. This indicator was dropped during restructuring as the project had no leverage to pursue it. Fully Achieved. Four of the five critical project initiatives (community centers, rural telephone services, business incubation, and SME training) were expanded to areas not originally covered by the project. T ICTAD A P D I 60. The Satisfactory rating differs from the MS rating given to the project during the last 7 ISRs within the Bank. However, five of those ISRs deemed that achievement of PDO was very likely, highly likely, on schedule, as intended and likely. It is not clear then why the MS rating was given. The last ISR, after noting that the project has achieved or surpassed most of its targets gives an MS rating presumably because the results were delivered at the end of the project and their sustainability would require additional time and support. However, as Table 4 indicates, all the PDO indicators were accomplished on the dates initially planned, and thus the correct rating for accomplishment of PDO should be Satisfactory. 3.3 Efficiency: Satisfactory 61. It is not possible within a 5 year period to develop policy, build institutions, create human capacity and expect to measure impact of ICT on economic development. ICTAD accordingly aimed to create capacity for development, not development itself and set out to measure results through (i) the supply response of the ICT services industry (PDO Indicator 1 in Table 4) and (ii) the number of people using the ICT access facilities created by the project (PDO Indicator 2). On the first indicator the project accomplished 17

38 100% of the target and on the second 725%. Thus, using these proxies, there is no question that the project succeeded in creating capacity for development. 62. Whether this was accomplished at reasonable cost, in the absence of quantifiable benefits this must be discerned by examining unit costs against internal or external norms, if they exist. This is the approach taken in this ICR (see Annex 3) except that, due to the novel nature of project activities, relevant internal or external norms were difficult to find. Using very conservative assumptions, the project unit costs were found to be very reasonable. They are shown below, but to be properly understood each must be examined in detail as shown in Annex 3. Project Output Unit cost USD Policy, Legal and regulatory Instrument $ 28,238 Trained EICTDA staff $ 2,684 Tenant Incubator companies $ 4,391 CRTC Refurbished Computers $ 77 Trained TVET teachers/sme Operators $ 434 Community Center users $ Justification of Overall Outcome Rating Rating: Satisfactory 63. The project is rated satisfactory because it achieved and surpassed its development objectives and indicators, whether as stated originally in the PAD or as sharpened after restructuring in December 2008, as can be seen in the Data Sheet. This rating is grounded on the Credit Agreement and ICR rating guidelines of the Bank. However, it does not reflect the project s limited telecommunications reform related objectives (see par. 28)) that were not part of the PDO and on which project outcomes were not indeed entirely satisfactory (see Section 5.2(a), par. 91, bullets 3 and 4). This merits pointing out because making telecom reform the primary PDO (see Section 2.1) was a design option intensely discussed but finally discarded, as reflected in the Credit Agreement. 64. As discussed in Section 3.1 the project is directly relevant to the human resource, capacity building and policy reform objective of the country s Plan for Accelerated and Sustained Development to End Poverty (PASDEP). It is also directly relevant to the service delivery take-off envisioned by the Bank s CAS as one of the central development challenges of the country, and to specific CAS priorities on citizen empowerment, service delivery and local capacity building. 65. In terms of the efficiency in the use of Project resources, while there is no practical way to strike a precise ERR, analysis of design features of the Project, of the unit costs of its main outputs and of some of its poverty-oriented pricing practices supports a satisfactory rating, as discussed under Section

39 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 66. Access to ICT for the poorest communities in Ethiopia: ICTAD demonstrated the relevance of ICT to the lives and aspirations of poor, rural and disadvantaged communities in Ethiopia. The direct and indirect beneficiaries of CIDEV centers, over 70,000 per month, are people at the bottom of the income scale, women, HIV-infected and the disabled, all of whom invest their limited time and money to access information and learn basic ICT skills. At completion, the project faced a 1,000% repressed demand (650 approved applications) for scaling up of the existing 65 centers across the country. 67. Building the capacity of the most disadvantaged communities and creating an enabling business environment. ICTAD has shown the vast demand for training and growth potential of the ICT services industry through its successful Training of Trainer (TOT), SME training and ICT business incubation (BIC) programs. TOT, based on the existing Training and Vocational (TVET) college network trained 576 teachers and set up 15 computer maintenance labs. SME program trained 645 SME operators and BIC created 4 regional business incubators that were nursing 43 new companies by project completion. ICT service industry indicators chosen to estimate the economic impact of these activities showed uniform growth, in excess of expectations. 68. Innovation. The project introduced to Ethiopia ICT-enabled areas of activity such as ICT centers, community radios, computer refurbishment and ICT business incubation that are being pursued successfully by leading countries like India, Brazil and the US and can yield long-term benefits for Ethiopian development. (b) Other Unintended Outcomes and Impacts (positive or negative) 69. CIDEV Centers as public/private service infrastructure. ICTAD demonstrated that community-based centers are not only successful models for ICT access, but also promising institutional platforms for dissemination of knowledge, provision of government services and community participation in governance. Center activities enabled through ICT include HIV education, women empowerment (Beza, Awi), environmental cleanup (Tena Kebena, Felege), help for persons with disabilities (Cardos, Alem Gena), distribution of government forms (Bahir Dar), youth education and empowerment (Yirgalem, Mekele, Korem), community library (Shashamene Dawn of Hope, Afar) orphan protection (Bollo, Robe), market/agriculture information (Kechema, Gewane, Nebo Daletti). 4. Assessment of Risk to Development Outcome: Rating: High 70. The risk to development outcome is rated high for the ICTAD project because, in addition to the expected uncertainties of an innovative, community-based, demand-driven project, the arrangements for continuation, sustainability and scaling up of project activities are unfinished and consequently weak. 19

40 71. As pointed out in Section 2.5 many of the organizational entities created under the project started operations two years later than planned and consequently are still far from being self-sustainable from either the managerial or financial points of view. 72. Taking the CIDEV program as an example, the income-generating activities of the centers are seriously affected by frequent power supply failures, interruptions in telephone and internet connections resulting in loss of patrons and income. Up to 16 of the 65 centers, or 25%, are not yet financially self-supporting, due to low demand for ICT services that are not enabled by reliable Internet access, as expected by project designers. Most centers were established within the last 2 years and their management has not yet matured for lack of handholding and technical support during a start-up phase. Thus, the Program as a whole merits continued monitoring and requires financial support from the GoE lest it cannot be sustained. 73. The ICR Team was given to understand that responsibility for continuation of the CIDEV, CR, BIC and TVET-TOT programs beyond 2010 will be transferred to regional counterparts of the EICTDA agency. This may well be the best long-time arrangement, but without training, handholding, incentives, managed transition plan and certainty about allocation of resources, local governments will encounter all the challenges to continue the program that ICTAD PMU encountered to create it. Thus this is considered a weak arrangement to sustain the development outcome of ICTAD. 74. In hindsight the project extension recommended at MTR was probably correct and should have been implemented in tandem with a reduction of about $3 million in the amount re-allocated to the Food Crisis program. This would have given the project the time and funding necessary to fully prove sustainability and scalability of outcomes. 75. Compensating somewhat for the above risks, are the following positive factors: GoE is committed to sustaining the results of CIDEV program. This was unequivocally affirmed by the Minister of Capacity Building, the Director General of the EICTDA agency and the Director General of the Ethiopian Broadcasting Authority during ICR interviews. Since many CIDEV centers are set up by existing community organizations that can provide space, furniture, management, customers and sometimes subsidized revenue, their sustainability following termination of ICTAD can be much higher than if they were self-standing operations. EICTDA and PMU were very successful in eliciting interest and securing cooperation by local governments. BIC centers in particular are the pride of the four regional governments who benefited from ICTAD support and this is an auspicious condition as responsibility is transferred to them. 20

41 5. Assessment of Bank and Borrower Performance 5.1 IDA Performance: Moderately Satisfactory (a) IDA Performance in Ensuring Quality at Entry: Moderately Satisfactory 76. IDA provided intensive support to GoE since early 2002 to help formulate an ICT Capacity Building Program responsive to national development objectives articulated in the July 2002 SDPRP (Ethiopia s PRSP) and in IBRD s CAS. For this purpose it organized a series of high level CAS Workshops in March 2002 which clearly connected the ICT objectives of SDPRP and CAS with specific policy/ regulatory framework, capacity building, private sector development, community access and institutional strengthening activities under the ICTAD project. This not only provided a strong development policy underpinning to the project, but also showed IDA at its best in connecting development, poverty reduction and ICT. 77. During project preparation IDA helped effectively to coordinate external partners most notably by (i) mobilizing a USD 0.97 million PHRD grant from Government of Japan to finance the bulk of project preparation activities and (ii) assisting in the design of DED s cooperation with GOE for long-term advisory support in project implementation, initially estimated in USD 1.8 million and eventually reaching USD 2.92 million. 78. IDA was also at its best in supporting and facilitating robust stakeholder input into project design. It worked together with GoE to convene numerous stakeholders in an extensive serious of consultations (see 5.2 below) that provided valuable external perspectives into project design. 79. Thanks to the PHRP grant, project preparation and design were underpinned by highly relevant technical studies on the application of ICT to various sectors and by regional surveys on the state of ICT infrastructure. 80. There were also one moderate and one minor shortcoming which account for the moderately satisfactory rating given to IDA: Implementation partnerships (Table 2) were defined only, not really designed, creating significant implementation risk. The operational and administrative manuals stated only in general terms that: All partners and beneficiaries will be responsible to implement sub-components and activities and regularly report on the progress of the project to PMU. MOUs with specific staffing and results commitments were left to be done during project implementation. The Bank, the PMU and DED compensated later with effective efforts to energize those partnerships or to work out alternatives. The timely intervention of EICTDA management was also critically important at times. However, since performance of the partnerships was a critical success factor for the project and since PMU staffing was designed only for coordination and monitoring rather than 21

42 implementation, a significant risk was taken in not designing the partnerships more precisely (see Section 6, bullet 3 for suggestions). The Bank left in the original set of progress indicators three that were related to broader telecommunications reforms (see Table 5) for which the project had no leverage and no commensurate activities or resources. These caused confusion regarding project objectives that persisted in some cases through to the end of the project. Indicator Laws enacted by 2006, allowing competitive provision of connectivity and ICT related goods and services Ethiopian Telecommunications Corporation (ETC) effectively provides backbone services at competitive rates. Ethiopian Telecom Authority (ETA) effectively regulates and enforces national policy by 2007 (spectrum management, licensing new technologies, etc.) and licenses at least 2 private ISPs per annum. Comment The competitive provision of connectivity was against explicit government policy to keep the backbone infrastructure under sole control by ETC. In truth the parties expected only legal and regulatory clearance to conduct a pilot program of public private partnerships for 3000 community phones. Even this limited reform objective proved unattainable and the rural connectivity subcomponent of the project was consequently cancelled. The project design had no appropriate mechanisms to accomplish this objective and strictly speaking competitive rates could never have appeared under a monopoly. This was something of a circular indicator as national policy was and continues being of monopoly provision by ETC of voice, data and multimedia communications whether wire line or wireless, fixed or mobile. Spectrum management and licensing of new technologies by a regulator under these circumstances are rather predetermined. As experience under this project would later show, licensing of ISPs by a regulator, under conditions of monopoly in service provision, is nominal in nature and the effective value and result of the license is determined by the monopolistic operator. Table 5. Key Telecom-related result indicators dropped at project restructuring (b) Quality of Supervision: Satisfactory 81. The Bank provided full staff continuity as both the Task Team Leader and a senior consultant (Messrs. Bobak Rezaian and Michael Broemmel respectively) were involved from early preparation to completion of the project. 82. The Bank team was flexible and creative in its analysis and corrective action when various project activities stalled particularly in the year between June 2008 and June 2009 (See Section 2.2 on Mid-Term Review). This happened for example with the BIC program in early 2009 when an external consultant was brought in, a special workshop was held and one on one meetings were organized between the EICTDA agency and the local governments sponsoring incubators in their jurisdictions. These efforts helped turn 22

43 around the pace of progress and enabled the BIC program to achieve its targets. Something similar happened with the TVET program which was scaled up at the same time. On the CRTC-DMF, the Bank assisted in the examination of the contract issues with the consultant and helped the PMU to evaluate the choices and eventually decide to outsource to the consultant, an NGO, the entire operation. This decision led to a rapid turnaround in performance, completion of the building and successful launching of the facilities. 83. When insufficient familiarity with Bank procurement guidelines was determined to be a cause of procurement delay the Bank responded proactively by (i) bringing one of its most senior procurement experts in early 2008 to assist with analysis of the procurement plan and impart formal training in works and consulting services consulting; (ii) providing concentrated support from the Addis office for bi-weekly procurement reviews after the project was restructured in the second half of By project closing procurement had fully caught up and the project ended with a well-deserved satisfactory rating in this area. 84. In the financial management area there was a clear if minor shortcoming in IDA s supervision of this project. IDA changed four times its project FM specialist and provided accurate but often ineffective follow up on issues that remained unresolved for long periods of time. It declared the Peachtree accounting software adequate for the needs of the project and did not revisit this assessment in spite of repeated evidence that transactions and reports were being processed outside the system. Whether for lack of software functionality or operator knowledge, the software could never tie procurement plans, disbursement plans, budgets and financial accounts to alleviate the burden of overworked PMU manager and staff. This shortcoming is rated as minor, however, because on the fundamentals IDA maintained accurate supervision of the financial accounts of the project, which were regularly audited and found broadly correct. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 85. On the whole, the performance of IDA in this project was fully satisfactory. However, IDA also had one minor shortcoming in supervision of the FM function, as pointed out above, and one moderate shortcoming in ensuring quality at entry. The lack of specificity in commitments and implementation arrangements with the various institutional partners of the project could have been serious had IDA and the Borrower not rallied energetically at critical points during implementation (see 5.1 (a) above). As a consequence, the PMU manager became the critical path for resolution of every issue and the DED advisors were forced into an enhanced implementation role additional to their role as technical advisors. 86. Under these circumstances, IDA guidelines call for a moderately satisfactory rating in spite of clearly satisfactory performance in the Bank s quality of supervision of the project. 23

44 5.2 Borrower Performance: Moderately Satisfactory (a) Government Performance: Moderately Satisfactory 87. Government similarly met satisfactorily the majority of its commitments under the project, albeit with some shortcomings explained below. GoE provided timely counterpart financing, and on the whole empowered the EICTDA agency and its PMU to execute the project to successful conclusion and thereby meet its development objectives. 88. The degree of government support given to the EICTDA agency is noteworthy since the agency was created less than two years before project effectiveness and its mandate affects critically the functioning of government and the entire economy. Government gave the Agency adequate political support and autonomy to (i) convene the rest of government, private sector, academia and other stakeholders to formulate a body of policy, regulatory and legal instruments in the area of ICT; (ii) seek and engage local government cooperation for all project components and (iii) select beneficiaries for programs such as CIDEV and CRs through a bottom-up, objective and pre-defined approach. 89. Government was also open and proactive in seeking extensive stakeholder input into project design. A total of eleven awareness raising workshops, initial needs assessments, and stakeholder and beneficiary consultation workshops were held during the design and preparation of the project. These included representatives from federal, regional and local government, NGOs, private sector stakeholders, community based organizations (CBOs), academia, donors and other partners. 90. Through its telecommunications infrastructure program (see Annex 11), Government also enabled the achievement of project objectives. This happened directly in the case of the CIDEV program that was able to establish 51 community centers with access to Internet. Indirectly, the powerful supply response of the ICT service sector used as key indicator of PDO accomplishment (see 3.2), could not have occurred unless sufficient confidence existed in the economy on the viability of investments in ICT-based enterprise. This is not to say that telecommunication services in Ethiopia have yet caught up with international standards (broadband Internet service, for example, is still very unreliable and expensive) nor to imply that reforms should not be considered. It is an acknowledgement that the multiple capacity building achievements of the project were not seriously jeopardized by lack of essential telecommunication services. 24

45 Users of Telecommunication Services in Ethiopia (millions) Fixed Line Mobile Internet Changes between 2006 and 2009 Subscribers % % % Subscribers per 100 inhabitants 116% 433% 300% Internet Users 187% Internet Users per 100 inhabitants 174% T G T S E 91. However, four policy issues detracted from a fully satisfactory government performance rating on this project : Unfinished Sustainability Plan. The Government s firm determination to maintain and scale up the results of ICTAD, particularly the CIDEV and CR programs, was not reflected in commensurate institutional, human and financial arrangements by the end of the project. All the institutional entities created under the project (CIDEV centers, etc.) started operations two years later than originally planned and did not have time to become self-sustainable. Thus the nurturing that should have happened within the project needs to happen outside it in order for them to survive (See Section 2.5. This requires a strong transition plan including training, handholding, incentives, financing, staffing (central and regional), central coordination and local management. Bits and pieces of this plan were present (See Section 2.5), yet a full, reliable plan was not there by the end of the project. Below market staff compensation. The compensation packages for high-skill positions were not set competitively and resulted in (i) difficulty to hire appropriately qualified staff in areas such as procurement, financial management, BIC management; (ii) staff attrition at critical times (procurement, FM), and filling of certain positions with individuals lacking the proper experience and qualifications. Acknowledging that this is a very complex problem for governments everywhere, the fact remains that if the right people cannot be hired and retained due to inability to compensate them competitively, then important, ICT-intensive projects and initiatives cannot be successfully undertaken. Ineffective ISP licensing scheme. Even though ISP licenses were issued and thus the related dated covenant was technically met, the original intention of the parties to spur the improvement of Internet services through limited competition was not accomplished. While technical difficulties with the infrastructure may have prevented ETC from enabling the ISP licensees to operate, since ETC is a government-owned monopoly these difficulties were ultimately under government control. Failure to test rural connectivity partnerships. Although GoE well surpassed the objective of 3,000 rural telephone connections set for the cancelled Rural Connectivity subcomponent of the project (see Section 1.7), the Government- 9 9 Based on ITU s Statistics. See actual figures in Table 26 in Annex

46 requested cancellation did prevent the pilot testing of partnerships between the ETC and private sector cooperatives for provision of rural telecom services. Agreed upon and important opportunities were foregone to gain knowledge and experience in real-world regulatory issues involving private providers, competition, access rules, interconnection charges, etc. 92. Several delays were also minor shortcomings affecting government performance rating, albeit with well understood justification, as pointed out in Section 2.2. (b) Implementing Agency or Agencies Performance: Moderately Satisfactory 93. EICTDA. At the project leadership level the Agency performed superbly and steered the project to clear success. Advocacy with higher government, mediation with local governments; consultation and coordination effectiveness with stakeholders were exercised to great effect. The overall level of delegation of responsibility and authority to the PMU were conducive to project success. 94. However the Agency came up short in the following areas: The Agency initiated a virtual incubation program in Addis for 17 private sector companies at an average cost of USD 32,590 without any known design document and without documented results of any kind. The BIC assessment report commissioned by the PMU did not offer any information on design or outputs of this effort and was quite skeptical about its technical soundness. As an implementation partner institution for the project, while the Agency performed very well in some areas like Policy/Standards and BIC (after restructuring), there was frequent tension and heightened project implementation risk from (i) encroachment of project staff time for agency business (for example for a protracted business process re-engineering exercise during 2007/2008) and (ii) diffused accountability for results when tasks were under Agency rather than PMU responsibility. The EICTDA was also frequently unable to maintain dedicated counterpart staff for critical areas of ICTAD like CIDEV, BIC, TVET-TOT and CRs. In some cases counterparts were Agency managers who, while able to provide guidance, were not suitable subjects of field-level knowledge transfer from DED advisors. In others (TVET and BIC counterparts during the first half of the project), counterparts were consultants or agency staff who, for one reason or another, could not dedicate the time necessary to become accountable for results. 95. The above challenges are to be expected from a new agency and therefore the performance rating is satisfactory in view of project results (see Section 3). Project design provided for formation of the PMU precisely to mitigate the risks posed by (i) the relative inexperience of Agency staff in management of complex projects; (ii) the daunting responsibilities placed on the Agency (Proclamation 360/2003 gives it 26 government-wide mandates); (iii) the mismatch between traditional civil service culture 26

47 and pay scales on one side, and the performance demands from an agency focused on technology-enabled transformation of government and of the economy at large. 96. The PMU received unanimous praise from the numerous project stakeholders and clearly was very effective in managing the project to successful completion. This was particularly notable in view of the large scope and complexity of institution building responsibilities that the project was forced to take in order to meet its targets. 97. The PMU was highly effective in building the implementation partnerships on which project implementation relied by design. It conducted an extensive communications and training program to raise the capacity of the partner organizations and secure their commitment to project objectives. When for one reason or another partnerships did not make progress at the expected pace, as in the case of the Ministry of Education for the TVET TOT program, the PMU negotiated successfully across layers of government to get help from new partners. 98. The willingness and capacity of the main partners (the Agency, the PMU and IDA) to confront crisis and change course were notable factors of project success. Following mid-term review in April 2008 it was clear that the pace of progress had to change drastically for the project to meet its objectives. Program areas such as BIC, CR, TVET and RTC were seriously behind schedule. Three main initiatives were implemented: A Project Charter was defined for each major program area of ICTAD as part of a rapid results exercise. This raised awareness among project stakeholders about the complexity, status, and challenges to complete the work before project closing. However, it did not change day to day management and in retrospect it was not viewed as critical factor of success by any of the stakeholders interviewed for the ICR. Direct, forceful involvement of EICTDA management to resolve strategic bottlenecks. This was decisive for: (i) TVET TOT program partnership was reoriented towards regional education bureaus and away from central Ministry of Education. (ii) IBLF was given a full management contract to set up and run the RTC and de-manufacturing facility. (iii) BIC program reverted to the EICTDA agency which mobilized authorities to speed the pace of implementation. Intensive follow up of procurement by the Bank and joint work with PMU staff succeeded in eliminating the transaction backlog and complete the procurement plan. 99. However, there were also shortcomings in the performance of the PMU, notably on the financial management and M&E areas, as indicated in Section 2.4 and discussed in Annex 2, Section DED performance. The role and performance of DED advisors was a critical factor of project success and is rated as highly satisfactory. DED s role was envisioned as advisory with a paramount emphasis on transfer of knowledge to Ethiopian counterparts. While knowledge was in fact effectively transferred to individual CIDEV center boards, BIC managers, CR associations and TVET college administrators, 27

48 knowledge transfer from DED advisors to EICTDA staff was limited by discontinuity in counterpart staff assignments In the absence of dedicated PMU or agency staff with the required skills and time, several DED advisors (TVET, BIC, CIDEV, and CR) became effectively responsible for program implementation in the field, acting on behalf of the PMU but not always with a commensurate level of discretion and information on financial and procurement aspects. DED s agreement to this role change and its constructive handling of the resulting inevitable tensions speak highly of their institutional commitment to the project. The integration of DED advisors into task implementation teams was ultimately productive and successful yet required significant adjustments on both sides. Its conditions can be improved in future projects, as suggested in Section 6. (c) Justification of Rating for Overall Borrower Performance: Rating: Moderately Satisfactory 102. As was the case with rating of Bank performance, rating of Borrower s performance as moderately satisfactory instead of satisfactory or higher is disappointing given the Borrower s major accomplishments in this project. However, the performance of government was affected by four moderate and one minor shortcoming, as detailed under Section 5.2.(a) Rating of the implementation agency (EICTDA) and the PMU as Moderately Satisfactory instead of satisfactory or higher is equally disappointing given their major accomplishments and effort on this project. However, as explained in Section 5.2 (b), both had also some shortcomings that pulled the rating down towards the MS level. 6. Lessons Learned 104. The main lessons emerging from this Project are for the most part relevant to other developing countries. ICT is relevant and effective enabler of grass root development. Over 70,000 poor people in remote rural areas of Ethiopia, women, HIV-infected, the disabled and especially the young invest their limited time and money every month in community centers and other facilities created by the ICTAD project to access information and learn basic ICT skills. ICTAD demonstrated that adequate institutional models, public sector support programs, grassroots demand and technologies exist to enable development of people at the lowest end of the income scale. The project provides strong evidence that governments and international development organizations should be resolute to empower the poor, particularly those living in remote, rural and marginalized urban areas, to access information and to use ICTs as a tool to support their efforts to lift themselves out of poverty Geneva Declaration of the UN World Summit of the Information Society in 2003, par

49 Community-based ICT centers are a successful institutional model. ICT community centers created bottom up on the basis of demand by community organizations are a sturdy and promising model for bridging the connectivity gap in Ethiopia and probably in other countries. None of the 65 centers created under the ICTAD project have folded down, even those that have operated for over two years. This is an important lesson when considering that failure rates during this same period exceed 15% in other countries. Since this project did not have time to determine unequivocally whether the business model used was financially sustainable and therefore scalable in the long-run (see Annex 2, Subcomponent 4, par. 161), a clear lesson is also the need to test desirable modifications to the business model and financial sustainability over a longer period. Implementation partnerships must be tightly designed at entry. Agreements between government agencies, particularly across levels of government, can go wrong for many reasons. When detailed commitments of staff, time, money, authority, problem solving, monitoring, early termination, etc. are not spelled out at entry, as in the case of ICTAD, the risk of implementation failure can be increased. This is of course a dilemma for project preparation which would need to be extended in time (and cost) to achieve this level of precision. It is also a risk in itself as best laid plans can be unraveled during implementation or unduly constrain it. However, if the partnerships are critical success factors for the project, this problem has to be addressed either through extended project preparation, more flexible results frameworks or more flexible staffing plans. ICT Projects requiring institution building must have long time horizons, large TA inputs and phased implementation. Institution building even at the level of community organizations or small businesses is complex and time consuming. Mobilizing local support requires extensive managerial time and new organizations require intensive training and technical support. With procurement and organizational work taking 4 years, measurable development outcomes from new institutions during one investment project are often unrealistic. CIDEV, BIC, CRs, CRTC-DMF are all new institutions created under ICTAD with extraordinary effort and five years were barely sufficient to get them started. Long-term, field-based technical cooperation can be highly effective modality of international assistance. This was demonstrated by the key role played by DED in project success. DED s contribution to ICTAD far exceeds its monetary cost in terms of the development potential of organizations (CIDEV community centers, community radios, business incubators) and facilities (TVET college training programs and computer labs, e-learning programs, etc.) created with their help. This modality of international cooperation is only possible for organizations like DED able to attract experts personally committed to the advancement of less developed countries with all its complexities and challenges, and is therefore in scarce supply. When available, however, it can feature prominently in project designs by governments and IDA. 29

50 Local political support is essential and must be explicitly designed for. This was a critical success factor for all activities under Component 2. The establishment of CIDEV centers, community radios and business incubators was possible only after the Agency mobilized local political support. Project design must envision what incentives budgetary transfers, competition, self-interest, awards, political pressure or raw authority will be deployed to obtain and maintain local support. Awareness raising events only go so far. Bank project team continuity is important success factor that should be the default Bank staffing policy. When IDA proposed to change ICTAD s Task Team Leader following MTR, GoE argued forcefully against it and IDA s eventual agreement to keep the team intact from beginning to end of the project proved to be decisively important. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 105. High level Government representatives interviewed for the ICR expressed strong satisfaction with the work done by IDA in support of ICTAD design and implementation and in particular with the dedication and knowledge of the task manager. This is mentioned here not only because it clearly went beyond the normal formalities, but also because this level of satisfaction with IDA support was made possible in large measure by the stability of the task manager and a senior consultant who steered the project from conception to completion Conversely, in areas like financial management where IDA made repeated staffing changes, Implementation Agency representatives expressed disappointment and suggested closer and more stable involvement by IDA. It seems clear that IDA could have done a better job following up on FM issues and assisting the PMU with training and technical advice in setting up a better computerized system Similarly, some Agency representatives expressed disappointment with occasional inconsistency in IDA procurement technical reviews. IDA sometimes needs to call in consultants or staff for ad-hoc technical reviews whose comments may be inconsistent with prior IDA clearances and advice followed by PMU in preparing procurement documents. Clearly IDA needs to ensure that its technical advisors have the duty and time to take into account past interactions and agreements with the Borrower A final comment from Implementation Agency representatives was a suggestion that in projects like ICTAD involving large capacity building activities, residential workshops, overseas training and the like, it was important to design highly transparent participant selection mechanisms and to strongly tie training with result commitments. (b) Other partners and stakeholders 30

51 109. The DED expressed satisfaction from its participation in this project. The organization invested over 2.1 million Euros to field 10 advisors who provided over 31 staff years of TA to the project. The DED advisors, being members of implementation teams, had recommendations which could have speeded up the project but could not be implemented for various reasons. They felt that review missions of the World Bank often did not understand the real situation and sometimes sensed these missions negatively. To avail future projects from this extraordinary resource it would be important to define careful communication guidelines among the Government, the DED and IDA. 31

52 Annex 1. Project Costs and Financing 32

53 (a) Project Cost by Component (in USD Million equivalent) Appraisal Revised Actual % of No. Components Estimate Estimate Costs Appraisal 1 Component one: Policy and Institutional Support % 1.1 Policy, regulatory and legal framework % 1.2 Development of ICT Standards % 1.3 Institutional Strengthening Ethiopian ICT Development Agency-EICTDA % Ethiopian Telecommunication Agency (ETA) % Ethiopian Broadcasting Authority (EBA) % College of Telecommunication and Information Technology (CTIT) % 1.4 Project Management % 2 Component Two: Application and Community Support: % 2.1 Connectivity and Access Rural Telephony % 2.2 ICT Private Sector Development (Business Incubation) -BIC % Computer Refurbishment and Training Center (CRTC DMF) % 2.3 ICT Training of Trainers TVET-TOT % 2.4 Community ICT Development CIDEV and Community Radios -CR % Gains from changes in XDR/USD conversion 1.30 Unreconciled difference with closing IFR Unreconciled difference with IDA's Disbursement System Total Baseline Cost % Physical Contingencies Price Contingencies Total Project Costs Front-end fee PPF Front-end fee IBRD Total Financing Required (b) Financing Source of Funds Appraisal Estimate Revised Estimate Actual Financin g % of Appraisal Borrower % German Development Service (DED) % International Development Association (IDA) % Total % 33

54 Note: Data used for this report was provided directly by the PMU and does not match in all respects with the last IFR of the project. The differences are reflected as un-reconciled adjustments. 34

55 Annex 2. Outputs by Component Component 1 Policy and Institutional Support 110. The objective of this sub-component was to develop the core set of National policies, laws, regulations and standards, and guidelines for use of IT in the Ethiopian economy in general and in the public sector in particular. This is therefore an essentially horizontal governance foundation affecting utilization of technology across the entire economy Specific target indicators were (i) the development of an overall ICT policy for government; (ii) development of 14 national ICT standards, and 3 National ICT guidelines; (iii) the reduction of import tax on ICT imports. Other indicators that were reformulated during program restructuring were the development of ICT-related legislation and of intellectual property right legislation Against these objectives the EICTDA agency performed outstandingly well, especially considering that it was a new agency and that this agenda is one of the most complex ones that challenge mature counterpart agencies in other countries. Table 7 summarizes the outputs from this subcomponent. The data sheet shows how of the indicators formulated after restructuring the only one not fully achieved was the reduction in tariffs for ICT which was only made applicable to investment-oriented imports and thus largely bypassed the ICT industry As indicated in Table 7, five laws were drafted and sent for comments to government agencies prior to their submission to the legislature. Thirteen ICT standards and three ICT guidelines were developed and issued. Additionally, four draft standards were finalized, and eight were under development by project termination. These outputs required extensive stakeholder consultation and debate. 14 consultative workshops and discussion forums were conducted and about 528 stakeholders (181 women) participated at different stages. 35

56 Area of Impact e Society e Commerce e Government Document Name ƒ ƒ ˆƒ ƒ ƒ ƒ ƒž ƒž œƒ ƒ ƒ ˆ ˆƒ ƒ ˆƒ ƒˆ ƒž Šƒ Ž ƒ Žƒ ƒ ƒ ˆ ˆƒ ƒˆƒ ƒž ƒ Ž ƒ ƒ ƒ Š š Š ƒ Š ƒ ƒ Š ƒ ƒžƒ ƒ ƒ ƒ Ž ƒ ƒ ˆ Ž Š ƒ Ž ˆ ƒ Ž ˆ ˆ ƒž Ž ƒ ƒ ƒ ƒ ƒžž ƒ ƒ ƒ ƒ ƒžƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒž ƒ ƒ Ž Ž ˆ ƒ ƒ ƒ ˆ ƒ ˆ ƒ š Šƒ ƒ ƒ ˆ ƒ ƒ Ž ƒ ƒ Œ ƒ ƒ Ž ƒ ƒ Žƒ ƒ ƒž ƒ ƒ ˆ Œ œƒ ƒ ƒ Š ƒ T P R L O Status at Project Closing Ž ƒ ƒ ƒ ƒ š ƒ Ž ˆ Š Žƒ ƒ ƒ ˆ Š Žƒ ƒ ŽŽ ƒ Š ƒˆ Ž ƒ Ž ƒˆ ƒ ƒˆ ƒ ƒˆ ƒ ƒˆ ƒ ƒˆ ƒ ƒˆ Ž Ž ƒˆ ƒ Ž ƒ Ž ƒ Ž ƒ Ž ƒ ƒˆ ƒ ƒˆ ƒ ƒˆ š Ž 114. A large consultative effort is needed to develop policy regulation and standards and the quality and extent of this effort determines compliance in large measure. Thus EICTDA held 14 consultative workshops and discussion forums in which about 528 stakeholders participated at different stages, with 181 women among them as shown in Table 8. 36

57 No Description Duration Participants in days M F Total 1 e-gif interim & final report e-gif Training Competency Certification Consultative meeting on 3 above Consultative on e-com law Review national-e transaction act Review Draft Data protection act Review Draft e-transaction act Consultative workshop on Ethiopic Keyboard layout Standard & review final report 10 Discussions on ETHIOPIC TO Latin Standard draft & final Document. 11 Consultative workshop on Ethiopic Soundex standard 12 Consultative workshop on National Digitization standard 13 National Digitization standard Final Document Review 14 Consultative Discussion on ICT Standards Requirement study Total T C ICT Remark Subcomponent 1.3 Institutional Strengthening Institutional support to EICTDA 115. This subcomponent was the flagship capacity building mechanism of the project. Its objective was to build the human organizational and technical capacity of the key sector institutions namely the EICTDA, the ETA and the EBA. In practice capacity building efforts were extended to the Civil Service College, the College of Telecommunications and Information Technology (CTIT), the Productivity Improvement Center (PIC), the Federal Medium and Small Enterprise Development Agency (FEMSEDA) and a small part the ETC. This subcomponent absorbed the lion share of project funds, 31.8% or USD 7.4 million to be precise. In total over 765 staff members participated in short and long term trainings (27 on BSc/BA programs, 79 professionals participated in short term external trainings, and 82 persons participated in study tours As is the case with all training, impact can be seen only in results and over the medium term. From this perspective it is clear that the capacity of the Agency to discharge its multiple mandates has been substantially strengthened, as evidence by late project performance on programs such as the Policy and Regulatory Framework and the Business Incubation program. 37

58 No Region Database website develop ment IT Security and Cyber Crime IT Continuity & Disaster Recovery C-Sharp Trainees Trainees Trainees Trainees Male Female Total ƒž ƒ ƒ Šƒ ƒ ƒ ƒ ƒž ƒ Žƒ Šƒ Ž ˆƒ ƒ ƒ Total T L EICTDA C B Total trainees 117. Under this subcomponent the EICTDA agency also provided smaller support inputs to the following agencies: Ethiopian Civil Service College. The project set out to help ECSC use modern elearning technologies for remote training of civil servants. A DED advisor dedicated to this effort designed an e-learning SW platform and two courses (Procurement Management and Human Resource Management). Staff were trained (unfortunately one left) and a first pilot course was ongoing in Awassa during the ICR mission, which unfortunately had already been halted several days due to the poor quality of Internet connectivity. Project results were therefore not conclusive, however it is clear that e-learning is a promising technology, particularly in a country that has had the forethought to deploy a governmentwide data communications network like Woredanet. College of Telecommunications and Information Technology. Project component one was designed to provide extensive support to the College of Telecommunications and Information Technology (CTIT) in the form of technical assistance, hiring of academic consultants, short and long term training and IT infrastructure. The objective was to create capacity for research and learning primarily in the Telecommunication subsector. Unfortunately CTIT was drastically reorganized and its mission re-oriented during the project. It played a 38

59 rather modest role in ICTAD as the source of training for 173 TVET instructors. Nonetheless, the project provided support to the tune of USD 353,639 to CTIT. Productivity Improvement Center (PIC) and FEMSEDA. These two institutions support training of small and medium enterprise employees, the first mainly in Addis Ababa and the second throughout the country. The project strengthened them with training, IT and training equipment, software and technical support. In total these organizations trained 645 SME operators (see Annex 2, Table 17). No Training Type No of trainees by sex M F Total Institution Duration Year Conducted Œ ƒ ƒ ƒ ƒ Š ƒ ƒ Š Š Š Ž Ž ƒ ƒ ƒ ƒ ƒ Žƒ ƒ Š ƒ ƒ Ž ƒ Ž ƒž ƒ ƒ ƒ ƒ Š Š Ž ƒ Š Š ƒ ƒ Ž ˆ Œ ƒ Ž Žƒ ƒ ƒ ƒ ƒ ƒ ƒ Ž Š Ž ƒ ƒ ƒ ƒž ƒ ˆ Œ ƒ Total T O EICTDA C B P Subcomponent Institutional support to ETA 118. The project provided support at a cost of USD 1.7 million (7.2% of project funds) to the ETA in the form of technical assistance, hiring of consultants, short and long term 39

60 training and IT infrastructure. One DED Technical Advisor was posted to work with the ETA for 2 years starting September, 2007 in the areas of telecommunication standards and quality of service, on which ETA published new standards ETA issued the following regulatory instruments during the project: Private Radio communications Directive issued in 2005; New national numbering plan issued in 2006; Quality of service standards for telecommunication services issued in 2008 ; Standards for short range devices issued in 2008; Directive on type approval of telecommunication equipment. Value added services directive Standards for Terminal Equipment to be connected to Public Switched Telephone Network (PSTN); Standards for Integrated Services Digital Network Basic Access Devices (ISDN- BA); Standards for CDMA 800 MHz Fixed Wireless Phones and Standards for Third-Generation (3G) Cellular Mobile Terminals Standards for Asymmetric Digital Subscriber Line Modems (ADSL Modems) VSAT licenses to investors and different institutions have been issued. Consumer complaint handling process was developed and ETA started processing complaints On the other hand, over USD 1 million were disbursed for ETA s spectrum management system in 2006 and the system did not reach full operational status by the end of the project. Design of ETA s Integrated Regulatory Information System was contracted for in May, 2008 and the system was not operational by the end of the Project The performance of ETA s-related indicators in ICTAD s result framework (reduced import tax for ICT equipment and effective regulation and enforcement of national spectrum and quality of service policy) were deemed to have been accomplished 50% and 40% respectively (see Data Sheet, Section F), becoming the only progress indicators that the project failed to substantially achieve or overachieve. Subcomponent Institutional support to EBA 122. Broadcasting allows people and communities to exercise their right to freedom of expression and thus it is a powerful application of technology to human development. EBA s mission is promoting expansion of high quality broadcasting that contributes to political, social and economic development. ICTAD sought to improve EBA s capacity to perform its mission through training of staff and financing of technology. The expected evidence of increased institutional strength was the development of 40

61 broadcasting legislation and radio licensing schemes, as well as the issuance of at least 5 community radio licenses within the period EBA overachieved in all output categories (see Table 11): Policy and regulation. The pre-existing Broadcasting proclamation no 178/1999 was replaced by proclamation no 533/2007 which addresses the development of Community Radio in accordance with international best practice. The Board of EBA approved the Formulation of Community Broadcasting licensing directives incorporating comments by NGOs, Government representatives and other stakeholders. A complaint handling directive was formulated to help safeguard the quality and safety of broadcast materials. Š Œ ƒ Ž ƒ ƒ Ž Ž ƒ ƒ ƒžƒ ƒ ƒ ƒ ˆ ƒ Žƒ ƒ ƒ ƒ ƒ ƒ ƒ Ž Šƒ ƒ Š ƒ ƒ ƒ ƒ ƒˆˆ ƒ ƒ ˆ ƒ ƒ ƒ ƒ Ž ƒ š ˆ ƒ ƒ Ž ƒ Ž ƒžˆ ƒ Žƒ ƒ Ž ƒ ƒ Š Ž ƒ Š ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ Š Ž Instrument Status Date Žƒ ƒ ƒ ƒ ƒ Ž ƒ Ž Žƒ ƒ ƒžƒ ƒ ƒ ˆ ƒ ˆ ƒ ƒ ƒ ƒ ˆ ˆ ƒ Ž ƒ ƒ Žƒ ƒ Ž ƒ ƒ ˆ ˆ ƒ ˆˆ Ž Š ƒž ƒ ƒ ƒ ƒ ƒ ˆˆƒ ƒ Ž 41

62 ƒ ƒ ƒ ƒ ƒ ƒ ƒ T E B A L R Ž Subcomponent Project Management 124. The overall performance of the PMU was evaluated already under Section 5.2(b). This section therefore focuses only on explaining the general comments made in Section 2.4 on the FM, procurement and M&E functions Financial management. As indicated in Section 2.4, financial management was exercised in general compliance with fiduciary requirements and agreed upon procedures, yet with significant shortcomings. The financial accounts of the project were regularly audited and found correct. The final audit was still pending when this ICR was completed Accounting and financial reporting were barely able to keep up with the past and contributed little to forward-looking financial management. Ledger posting backlogs prevailed and budgets were non-existent during most of the project. Budgets were declared nominally alive only seven months before project closing when all financial planning discretion had evaporated. While it could be argued that expenditure forecasting and budget control had a very limited role in an environment dominated by operational constraints as pointed out in Section 2.2, in fact a consistent comment made by leaders of the various program areas was that knowledge of funding envelopes would have helped them to steer action and plan work more efficiently Some of the FM shortcomings that prevailed during the project despite repeated flagging in IDA reports and corresponding reform agreements were: (i) incorrect format and content of financial management reports (FMR); (ii) inconsistency between IDA and project accounts (see Annex 1 for discrepancies remaining at the end of the project), and (iii) unresolved issues with partially reimbursed withdrawal authorizations The following issues kept the project under frequent accounting backlog, substandard level of internal control and unclear financial condition: Under staffing of FM function. Advertising for the assistant financial officer position did not attract interest for over a year and then the new recruit left for better pay after less than a year on the job. This resulted in concentration of work on the principal financial officer and consequent internal control issues for lack of segregation of duties. Deficient accounting software. The Peachtree Software-based accounting system never reached the level of functionality required for agile and accurate financial reporting under the project. This was raised by the Bank since November, 2007 and even for this ICR the PMU prepared the expense breakdowns feeding into Annex 1 using data processed in Excel outside the system. Irregularity in IDA vs. Counterpart funds utilization. Funds contributed by the government should normally be used to pay an agreed fraction of categories of 42

63 payments specified in the Credit Agreement. The Bank pointed out since November 2007 that this was not always being done under ICTAD. Although GoE counterpart contributions were timely made over the five years, 79% of fund withdrawals were made during the last 5 months of the project, even though during the same time disbursements from the IDA account were less than 10% of project funds. Furthermore, during review of the last FMR, IDA found a balance of USD 621, that did not correspond with its own project accounts as affected by withdrawal authorizations submitted by the PMU. To preserve foreign exchange the PMU had apparently made the corresponding payments out of the Counterpart, not the IDA account. It must be noted that inconsistencies were always eventually resolved in a satisfactory manner It must also be acknowledged that the numerous institutional partnerships required a large volume of accounting transactions that would have been challenging to keep up to date even with a superior computer system and adequate staffing. Procurement 130. Procurement performance was substantially different from the first to the second half of the project. There was initial difficulty to recruit staff knowledgeable of World Bank procedures and lack of familiarity with procurement of construction contracts which had not been originally planned. These issues led to one unsatisfactory rating by IDA in October, Corrective action from EICTDA s Director General on down was energetic and effective. By project closing procurement had fully caught up and the project ended with a well-deserved satisfactory rating in this area. Issue Difficulty in recruitment and retention of qualified procurement staff Insufficient familiarity with Bank procurement guidelines, particularly on ICT procurement.; Difficulty in access to foreign exchange and approval of LC by the central bank. Slow clearance processes at the World Bank Large number of small procurements Comment This problem is common in new projects. Special compensation is needed to attract and retain expert staff. The Bank brought one of its most senior procurement experts in early 2008 to revise the procurement plan train PMU staff on works and consulting services procurement. It also intensified support from the Addis office after the MTR with bi-weekly reviews. In the future, ICT procurement capacity should perhaps be a required condition for project appraisal. Similarly, IDA needs to have ICT procurement capacity in place for supervision of projects of this kind. The project benefited from direct intervention by EICTDA s Director General to deal with foreign exchange restrictions and speed up transactions. The Bank increased procurement staff time for the project. However, sometimes delays were triggered by incorrectly prepared documents. This added to the complexity of project and procurement management. However, it also probably helped the local industry. Packaging for the sake of expedience in procurement can result in diminished quality and competition. 43

64 Issue Comment Lack of capacity of local private sector to handle larger contracts in a timely manner These were addressed in part by direct intervention from the EICTDA Director General and by an intensified supervision and disbursement schedule in FY10 (ISR June 2009). Inconsistency in Bank technical See Section 7.(a) advice. T P ICTAD I 131. Monitoring and Evaluation (M&E) Design, Implementation and Utilization. The M&E system built under the project caters to the needs of both the ICT sector in general, to assist the EICTDA in its mandate as sector oversight agency, and of the ICTAD project in particular. With respect to its sector-wide objective the system worked well by meeting the requirements of the National ICT CB Program (2002) With respect to ICTAD s M&E requirements, the system design and operation for the most part met the requirements of the results framework post-restructuring, albeit with some shortcomings noted below. On the whole, however, the methodology and process for data collection were well designed and consistent across the years. They are therefore a data and methodological platform of much value both to the sector and to any potential follow-on operation. Specifically, the system developed survey methods and consistent 4-year data series on (i) ICT industry across the country and (ii) access to services in rural areas An effective M&E program and a robust learning system were considered key activities under this project because of the expected asynchronous implementation of its multiple activities. The requirements of the M&E system were formulated in the PAD perhaps too ambitiously and were properly scaled down during project restructuring. Below is an assessment based on original requirements in the PAD: PAD Requirement 1- Develop an empirical basis for evaluation of the impact of ICT investments on urban and rural development and poverty alleviation. 2- Assess the role of ICTs in poverty alleviation, with particular focus on gender equity. 3- Measure the level of increased beneficiary access to public and private services. 4- Measure the increase in effective use of such services through a final, carefully Assessment The system unsurprisingly fell short on this score. Given the breadth and general purpose of ICT s economic role, strictly endogenous variables to measure impact at the level of the entire society are few and meaningful only over periods of time that far exceed the project cycle. This requirement went one step beyond No. 1 above and consequently its related indicator was dropped when project was re-structured. Valuable and consistent data series were gathered however for sector policy analysis on language use, gender equity, and time and cost of access to markets and services. This was fully accomplished through consistent tracking of both public and private access facilities. Separate surveys were done for CIDEV, TVET and BIC starting in late 2009 which provided much of the results data used in this report. Response to CIDEV center survey was low 44

65 PAD Requirement designed survey (Operational manual, pg. 131); 5- Measure the impact of the CIDEV sub-component 6- Identify a set of monitoring indicators for ICT-assisted community oriented interventions. at 55% of the centers. Assessment Impact was measured indirectly through the supply response of the ICT service industry (see Annex 3). A small, 5-center survey of employment outcomes was conducted for the ICR and its results are reported in Annex 3 (see Table 24 on pg. 60). This was a clear shortcoming of the system post-restructuring. The M&E reports provide no data on financial or service performance of CIDEV and CR interventions. Although grant agreements required periodic reporting of such data, this proved to be very difficult and project staff and time were underdimensioned to supervise and enforce the reporting system. Table 13. Assessment of ICTAD s M&E System 134. A useful service suggested for ICTAD s M&E system was that of tracking progress in telecom services against the government s own established benchmarks. The system did track the critical network infrastructure, user base, tariff and quality of service variables but could not draw comparisons with targets that are largely not publicized. Component 2 Application and Community Support Subcomponent 1 Connectivity and Access As explained previously this subcomponent was cancelled but its community objectives were accomplished through installation of over rural telephones directly by ETC, Subcomponent 2 ICT Private Sector Development (Business incubator) 136. The objective of the Business Incubation (BIC) program of ICTAD is to create opportunities for technology micro entrepreneurs to test their business ideas and develop viable businesses. Each incubator would provide technology, space, technical and entrepreneurial support to private companies, usually start-ups The project set out to create one central incubator in Addis Ababa where demand was presumed to be largest. It actually over achieved its objective by creating four regional business incubators in four regional capitals between February, 2008 and July, The business tenant profile of these centers is shown below in Table 14. No Incubation Center No of No of Owners Business Type Tenants M F Total 1 Mekele ICT Services, software development, promotion, repair and maintenance, training, networking. 2 Bahirdar Maintenance, website & sw development, multimedia, networking, digitization, and training. 3 Hawassa Maintenance, website & sw development, networking, graphics, and training. 45

66 No Incubation Center No of No of Owners Business Type Tenants M F Total 4 Adama Maintenance and refurbishment, website & software development, database management, and training. Total Table 14. Tenant Profile of Incubation Centers 138. Each incubator required developing a government-owned yet business-oriented organization from the ground up and coordination of this on both the central and local sides was time consuming. All jurisdictions had difficulty fulfilling their commitment to provide a suitable building as a condition for program support, and it was ultimately necessary to relax this requirement and provide construction financing in order to proceed ICTAD PMU provided effective coordination of the program until after MTR of the project in March, After that, responsibility for the program was transferred to a different manager within EICTDA who did take matters into his hands and helped to remove major roadblocks then existing. A DED advisor was dedicated to the BIC program at great personal effort and was therefore instrumental in making it a success Total program costs were in the order of USD 3,512,426. Of these, almost 16% were spent on grants for seventeen (17) so called virtual incubators in Addis Ababa. These grants were considerable in terms of the usual capital structure of software companies in Ethiopia, and ranged from USD 11,000 to USD 48,000. This part of the program had very doubtful results as the grantees, apart from receiving the money and access to space in a local government facility did not receive discernible technical advice, supervision or monitoring. Under these circumstances grants operate only as public subsidies to private business that may distort more than help their long term competitive viability and discriminate against competitors. It is understood that this virtual incubation program in reality is preparing a tenant base for the IT Park being developed by EICTDA and therefore it may well be a sound long-term investment in private sector support. With the information available to the ICR, however, no tangible benefit can be discerned from the Project investment in this program. Computer Refurbishment and Training Center/De-manufacturing facility 141. As planned, one computer refurbishment and training centre (CRTC) was built from the ground up, fully equipped and started operations in Akakai (Oromiya region). The CRTC refurbishes donated computers and sells them at affordable prices ($105 per computer) to schools, health centers and community organizations (not to the public). In addition the center provides advanced, hands-on training to 75 TVET graduates every year using for this purpose superb classrooms and computer workshop facilities. Graduates achieve mastery of computer repair, maintenance and networking The CRTC is a world class facility and Microsoft Authorized Refurbisher (MAR) adhering the EU s Waste Electrical and Electronic Equipment (WEEE) directive. Computers are professionally tested, cleaned and loaded with licensed software in a high- 46

67 tech environment. They are then deployed on a cost recovery basis, with the CRTC offering support and ensuring that eligible recipients are able to provide a secure environment for the safe and sustainable use of ICT. Cost USD (estimate) * Local Market CRTC (June, 2010) Pre-used Pentium IV computer with 17 CRT monitor De-manufacturing fee 10 Software: 10 Microsoft XP Professional 250 Microsoft Office Norton 2008 Anti-Virus 75 Total per PC * 1 USD = 12.5 ETB 1 The USD 85 cost includes overseas and inland shipping, new peripherals (cables, mouse, keyboard), data-wiping, external/internal cleaning, testing, maintenance (if required), software installation, and packaging for distribution. Table 15. Value Proposition of ICTAD s CRTC 143. Protracted preparations (for financial autonomy, building construction, power connection, access to foreign exchange and recruitment of skilled staff) and fragmented management responsibilities (between EICTDA, PMU and the consultant company), seriously delayed the start of CRTC operations. Following the project s mid-term review in April 2008 the EIICTDA outsourced to the consultant, an NGO, management of the CRTC under a form of PPP arrangement until November The business partner provides knowledge transfer, technical support and management. Under this PPP the center was able to start operations in June 2009 and by the end of the project it had sold 3,300 out of planned 15,000 computers The CRTC is now poised for sustained operation and rapid growth. While ICTAD provided the needed investment financing as a grant, the CRTC is expected to be operationally self-sustainable going forward. It is on track to firm up supply arrangements with overseas donor corporations and domestically to reach a steady stream of orders from eligible recipients. Its breakeven quantity is around 9,500 computers per year, at $105 per computer, therefore it is not a small scale operation and requires professional and accountable management to avoid insolvency and prosper Although clearly an outstanding achievement so far, the CRTC needs continued support from the EICTDA during the initial phase of operations to establish itself firmly as an independent entity. In particular it needs: (i) autonomy to hire competent management and technical staff and to compensate them competitively; (ii) access to foreign exchange for its international supply operations; (iii) clarification of its legal status and (iv) reliable demand from public schools and other qualified clients to ensure a breakeven flow of computers through its impressive facilities. 47

68 De-manufacturing (DMF) 146. Before ICTAD, there was no process in place to collect and process electronic equipment at the end of its life cycle. This is a major environmental risk and immediate actions are required to prevent the dumping of toxic electronic waste to landfills. Thus the project established a computer de-manufacturing facility next to the CRTC which is already operating in a temporary building pending completion of its own Planning and management of the DMF is also the responsibility of the CRTC business partner. Experts from the partner work closely with the Ethiopian Environmental Protection Agency (EPA) to establish environmentally safe processes in the entire supply and de-manufacturing chain of toxic electronic waste. Subcomponent 3. TVET Training of Trainers (TVET - TOT 148. The Ethiopian Technical and Vocational Education and Training system (TVET) offers training in 25 fields including ICT at more than 200 locations to over 200,000 students, of whom 51% are women. Ethiopia ranked 72 out of 93 countries rated in 2007 by the UN with respect to the Women Empowerment Index The overall objective of the TVET TOT program is to improve the quality of ICT training for students at TVET colleges in key ICT subjects including initially PC maintenance and trouble shooting, networking, and Database management basics. Specifically ICTAD aimed to train at least 600 TVET teachers (increased from initial 400) and to improve the IT infrastructure and training labs in at least three TVET colleges. The project fully achieved and surpassed these objectives (see Table 16). It graduated 576 certified trainers and additional training sessions were on-going by end of project. It also established 15 computer training labs, two each in TVET colleges in Tigray, Oromia, SNNP and Amhara regions, and one lab in each of the other 7 regions ICT services are needed by all sectors today. Many private, government and nongovernment offices in the regions suffer from non-functioning ICT equipment as the required maintenance expertise mostly available in the large cities. Although not explicitly tracked, TVET-TOT trainees are believed to be behind the major expansion of computer training facilities and services measured as one of the PDO indicators The HRD-department of EICTDA managed the program in partnership with the Ministry of Education, the Regional Education Bureaus, and TVET colleges. ICTAD supported the program with one experienced DED TA. Three institutions provided the actual training: Mekelle Institute of Technology (MIT), Adama University and the College of Telecommunication and Information Technology (CTIT). Region MIT CTIT Total 11 See pg

69 Adama University Male Female Total Federal Addis Ababa City Amhara Oromia Tigray SNNRS Somali Gambela Benshagul Gumuz Afar Dire Dawa Hrerie Total T T TVET TOT P 152. Separately, the project supported also the initiation of TOT courses for Small and Medium Enterprise (SME) operators, mainly in Addis Ababa but also in other regions. The project partnered with the Productivity Improvement Center (PIC), a training outfit mainly oriented towards the Addis Ababa region and the Federal Medium and Small Enterprise Development Agency (FEMSEDA) for this purpose. Table 17 below shows the training results from these partnerships: Region Male Female Total ƒž ƒ ƒ Šƒ ƒ ƒ ƒ Total T SME O ICTAD 153. The project ended with extraordinary interest from the regional education bureaus in expanding the TVET-TOT program both in geographic and in curriculum coverage. However, as pointed out in Section 2.5, there are no specific plans to continue funding the program other than transferring responsibility for it to the local governments but without explicit technical support or funding from the center. Subcomponent 4 Community ICT Development (CIDEV) 154. CIDEV provides competitive access to grants for eligible community organizations and assists successful applicants to setup community ICT centers. The centers are 49

70 located in buildings provided free of charge by local sponsors (the community organization itself or local government) and are managed on a voluntary basis by a committee. They have been established mainly in remote and inaccessible parts of the country (see Table 18) and focus on community development activities (see Table 19). Full profile is in Table 23. Amhara Oromia SNNP Afar Somali Gambela Tigray Diredewa Harari Benshangul G. Addis Ababa Total Table 18: CIDEV centers created under the project 155. The appraisal process for CIDEV program proposals was carefully defined and documented in the ICTAD Operating Manual. Eligible entities include local civic organizations already working on development issues, government agencies, licensed businesses, registered associations, NGO s or kebeles. Proposals are evaluated on welldefined criteria such as (i) scalability; (ii) alignment with national priorities in health, agriculture, education, good governance and ICTAD development objectives; (iii) a demand-driven business model; (iv) physical and financial feasibility; and (v) sponsorship by community or local government through provision of rent-free space. Investment grant proposals cannot exceed USD 50,000 equivalent (the actual average grant was USD 33,803), and they must meet defined documentation standards (rational objectives, anticipated impact, costs/risks, etc.) The PMU performs the technical appraisal process, and then recommends proposals for selection by an advisory board composed of representatives from government, private sector, civil society and the UNDP. The final grant decision is made by the EICTDA Director General on the Board s recommendation Outputs. The project target of 40 community-based centers was exceeded. A total of sixty-five (65) CIDEV centers were set up of which 54 meet the community based requirement and 11 (created top-down by the Ministry of Youth affairs) do not. Repressed demand for new CIDEV centers was over 600 proposals by Project closing Formation of each center requires considerable travel and extensive work on awareness raising, planning, negotiation, contracting, community mobilization, organization, recruitment, training, building preparation, procurement, installation of equipment, financial administration and technical support. The results, however, go far beyond mere provision of ICT. CIDEV centers are also institutional platforms for dissemination of knowledge, provision of government services and community participation in governance Services. All centers provide basic computer training, telephone use, and secretarial services such as scanning, fax, and photocopying. Many centers diversify into other services such as passport photographs, cafeteria, recreational TV, showers, etc. to increase revenue. Most centers are the first and only ICT service providers in their area 50

71 and many even introduce electricity to the community they serve. A profile of service statistics is shown in Table 19. Service Statistics Areas of Activity 12 Capacity-Building Total number of centers 65 (Computer Literacy) 41 % of centers reporting service statistics 55% Market/Agriculture Information 7 Avg Monthly Users (sample 44 centers) 1,116 Health 5 Estimated Monthly users (all centers) 72,542 Environment 4 Target for the project 10,000 Persons with disabilities 4 % Achievement 725% Gender 4 Total 65 Table 19: CIDEV Center Service Statistics 159. Training is by far the most important service of CIDEV centers. Table 20 shows how a total of 3,524 people (female, youth, government employees and others) have received training, particularly in basic computer literacy. No Description Male Female Total Remark 1 Training on Management, Finance and Procurement for ICT Center Committee members Participants from 39 centers 3 CIDEV Network-Hub founding Conference Computer Maintenance, Networking & website development training for Center staff Drawn from 23 CIDEV centers 5 Basic computer literacy for community at large All centers Total Table 20: Short Term Trainings for CIDEV center staff and volunteers 160. Financial performance. The not-for-profit principle of the program results in below-market service fees which are still calculated to cover operating costs after ICTAD support terminates at the end of one year of operation. Average operating cost and revenue data were available only for 44 (68%) of the centers (see Table 21). Of these, 34 centers (77%) show monthly profits. Some centers incurring monthly losses (predominantly youth centers) waive the fees due to customer s inability to pay. Eight of them now have independent sources of revenue. Twenty-nine centers were founded in the last year and still face the expenses and frequent revenue shortfall associated with startups. Although more systematic data collection is clearly needed, it seems reasonable to expect that a majority of the centers can be financially sustainable. Financial Performance No. % 12 PMU Project Completion Report V.1-4 July 5, 2010 p

72 Financial Performance No. % Centers reporting financial information 44 68% Of which, centers reporting avg. net monthly profits 34 77% Of which, reporting average net monthly losses 10 24% Graduated Center Analysis Centers graduated from subsidy period 45 69% Graduated centers reporting avg. net monthly profits 26 58% Graduated centers with strong sustainability rating 8 18% Graduated centers with medium sustainability ratings 33 73% Graduated centers with low sustainability ratings 4 9% Table 21: Financial Performance of CIDEV centers 161. Sustainability. Sixty-one out of 65 centers are rated to have medium to strong sustainability, as shown in Table 22. These ratings were assigned by program managers through qualitative assessment of factors such as service statistics, availability of rentfree facilities, income, and the strength of the governing board and of community/government sponsorship. Even though 45 centers (69%) have already graduated from the one-year operational subsidy period, at project completion no center had yet closed for business. This is likely to change, and a percentage of the centers will probably close. However, the failure rate of centers in Ethiopia is expected to be lower than in India (15%), mostly on account of the CIDEV partnerships with existing community organizations 13. Sustainability Ratings # of centers % of total Strong 12 18% Medium 49 75% Weak 4 6% # Centers Assessed % Table 22: Sustainability Ratings of CIDEV Centers 162. Scalability. The question of whether CIDEV centers with the present business model could be scaled up as country-wide solution to the connectivity gap was not answered conclusively by ICTAD due mainly to lack of time to observe the financial performance of the centers. ICTAD s average cost per CIDEV/CR was USD 52,760. For 15,000 Kebeles, this would cost USD million, an amount presently unaffordable. However, ICTAD s average investment cost per center is an unlikely parameter for estimation of scaling up costs because: Close to one half of investment costs were used to help sponsoring community organizations refurbish and furnish the center premises. This would be done only exceptionally under a scaling up scheme. 13 In India, the Citizen Service Center (CSC) program is based on local entrepreneurship, most of it ad-hoc. See 52

73 Training costs for employee training are likely to decrease significantly given the much higher supply of instructors which the project generated primarily through the TVET program. Financial performance of the centers over a longer period of time may be sufficiently strong to justify a loan component for investment costs, thus reducing the average amount of grant financing Challenges Encountered. The main limiting factor was the small number of staff to run the CIDEV program both at the PMU and in the regional capitals. For more than a year, the DED advisor traveled mostly alone throughout Ethiopia as the only staff person responsible for implementation of centers, and the ICTAD Project Manager had to intervene personally to remove obstacles and negotiate every grant award. Thus, extraordinary individual dedication was in large part responsible for the eventual results exceeding project targets Centers also faced high turnover of committee members and generally low managerial skills within the responsible community organizations. Some ICT centers are not yet financially self-supporting due to low demand for ICT services. Frequent power supply failures and interruptions in telephone and internet connections also disrupt income-generating activities. Failure of some sponsoring communities to provide rentfree space also imperils sustainability. Administration and control systems were not developed enough to provide the full service statistics and revenue data needed for the ICR. Community Radio (CR) Program 165. The project set out to establish 4 community radios, three (Kore, Bonga, Durame) in the SNNP region and one (Sude) in Oromia region. It actually established seven community radios in the above targeted locations plus one each in Kombolcha, Sekota & Jimma. The Jimma CR had been started before the project launched so ICTAD provided ICT equipment and training to make it operational. An 8th CR in Argoba was being established at project closing ICTAD provided all coordination, technical assistance, procurement of equipment and funding for the CR program. A DED advisor was dedicated to these tasks and was therefore instrumental in making these community radios a reality. The EBA supported the project effectively through new legislation on CRs and by expediting issuance of licenses Establishment of each CR requires licensing, technical installation, training, content development, organizational development and networking / establishment of a Community Radio Association, hiring of staff (including the station manager), administrative and financial control systems and of course money (over USD $50,00o for each CR) Each CR requires studio Equipment (broadcast mixer, CD-Players, etc.), Field Recording Equipment (recording sets for interviews, external Microphones, etc.), Transmission Equipment (antenna masts, FM Transmitter, etc., IT Equipment (10 53

74 refurbished computers and special software for every site, etc.), power generator, backup equipment and of course furniture CRs go through a process at the community level akin to that of a child learning to speak at the personal level. To give effective voice to a community and learn to inform members on common issues, concerns, culture and activities is a long-term learning process that requires extensive training and mentoring by experienced practitioners. In addition, CRs under ICTAD need to become at least partially self-sufficient and this involves business planning and collegial management by a board of community leaders. More fundamentally, CRs need at all costs to be grounded and led by communities and therefore they cannot thrive well under external direction Thus CRs are both an extraordinary resource for community development and a low volume, long gestation-type of activity not easily scaled up but demanding of experienced, professional support by governments, at least at the beginning. The EICTDA has extended the contract with the DED advisor who is focusing on setting up the Community Radio Association as a mechanism for networking, technical support and possibly training of the existing CRs. 54

75 Site and Distance from AA in Km Starting (inception) Date Subsidy months remaining Sustainability 0 % % Avg. Monthly Profit (Loss) in Birr*** Independent source of revenue? Avg. monthly service Users Type of Community organization No. 1 Gewane (360) November Pastoralists 2 Asayita (670) December Local NGO 3 Semera Youth (588) March , Youth & Women Ass. 4 Shashemene (255) March Local NGO 5 Derra (125) November Urban Admin. 6 Kechema (88) September Farmers Ass. 7 Gohatsion (186) May Local NGO 8 Jimma (346) October Youth Ass. 9 Enango Kali (480) June ,430 Farmers Ass. 10 Nebo Daletti (480) June Farmers Ass. 11 Tullu Bollo (80) Oct , Youth Ass. 12 Alem Gena (20) September YES Disability 13 Bako (251) October YES Disability 14 Gursum (590) September , Youth Ass. 15 Kemba (630) October Cooperative 16 Gunchire (200) November Youth Ass. 17 Yirgalem Youth Center (313) June Youth Ass. 18 Wonago (370) July , Youth Ass. 19 Dasenech (840) March Youth Ass. 20 Jinka (733) November , Youth Ass. 21 Shone (330) June , Youth Ass. 22 Korem (619) July Youth Ass. 23 Mekele (783) July , Youth Ass. 24 Adigrat (898) July Youth Ass. 25 Shire (1087) July , Youth Ass. 26 Axum (1024) April , Youth Ass. 27 Dansha (844) October Cooperative 28 Muja (670) May Youth Ass. 29 Shoa Robbit (222) June Youth Ass. 30 Dejen (229) April , Youth Ass. 31 Kamise (325) June Youth Ass. 32 Nefas Mewcha (740) May , Local NGO 33 Bahir Dar Youth (560) March Youth Ass. 34 Enjibara (452) May , Youth & Women Ass. 35 Cardos (AA) June, YES Disability 36 Tena Kebena (AA) March Local NGO 37 Negat Ethiopia (AA) March ,450 YES Disability 38 Tiwledihin Agelgil (AA) May Local NGO 39 Felege Ethiopia (AA) March ,600 YES 344 Disability 40 IDPDA (AA) January YES Disability 41 (AA) October Local NGO 42 Beza (AA) October YES 140 Local NGO 43 Dire Dawa (515) June ,000 YES 2240 Local NGO 44 Jijiga (628) August Local NGO 45 Gambella (766) October , Youth Ass. 46 Harar (526) July , Local NGO 47 Wombera (590) March Youth Ass. 48 Hawassa (271) March Local NGO 49 Robe (442) April Local NGO Adonay Women & Children 50 (Kibremengist) (471) April Local NGO 51 Qillenso Mokonssa (480) March Youth Ass. 52 Gilgel Beles (544) March Local NGO 53 Delgi (830) March Local NGO 54 Debark (841) April Local NGO 55 Tigray (abiadi) YC (878km) , Model Youth Center 56 Afar(Semera) YC (610 km) , Model Youth Center 57 Amhara(Dessie) YC (401km) Model Youth Center 58 Oromia (Adama) YC (100km) Model Youth Center Southern region (Awassa) YC 59 (275km) ,158 Model Youth Center Beneshangul (Assosa) YC 60 (678km) Model Youth Center 61 Gambella YC (777km) ,800 Model Youth Center 62 Hareri (Harer) YC (525km) Model Youth Center 63 Dire Dawa YC (515km) , Model Youth Center 64 Addis Abbaba Youth Center ,500 Model Youth Center 65 Somali (Jijiga) YC (620km) April Model Youth Center 55

76 T P C CIDEV P 56

77 Annex 3. Economic and Financial Analysis Economic Premise and benefits 171. As pointed out in Section 3.3, to analyze ICTAD s economic benefits it is indispensable to acknowledge fully that the project s objective was fundamentally capacity building The project aimed to create capacity for well-known economic benefits to materialize, not to achieve those benefits directly. The project s fundamental economic premise was that use of appropriate ICT can facilitate access to markets, development information, and public services, all ways to improve the livelihood of the affected communities. The design took the link between project outputs and ultimate economic benefits as a premise, not as an objective to be validated through the results framework. The project did not set out to actually provide access to markets, or to deliver development information or public services through ICT-based facilities. In fact, none of the original or restructured project components and none of the project development indicators directly targeted any of these economic benefits This approach resulted in a project designed to create human, institutional and regulatory capacity to jump start the ICT sector in areas where it was practically nonexisting and for the benefit of communities previously without access to technology. The five years of the project were spent in creating these capacities and launching them operationally with reasonable prospects of continuation. The benefits to be expected such as increase employment and incomes, increased economic activity, lifting of some very poor people out of complete poverty, giving development opportunities to disadvantaged groups like women and HIV-infected youths, etc. were shown to be possible and likely through beneficiary surveys mainly for CIDEV and BIC programs. However, actual impact measurement has to wait until a representative group of graduates from these programs can be followed during a meaningful time In the meantime it is worth noting that a strong consensus exists both locally and internationally on the value of a project like ICTAD and the urgency of scaling up its results. To wit: ` 3 In stakeholder consultations during project preparation all respondents to a country wide sample stated their belief that ICT improved internal and external communications, reduced costs, empowered people and improved service delivery. 14 In another preparatory study to assess the potential socio-economic impact of ICT Stakeholders from six regions of the country all pointed to one major theme: current information communication technology [manual collection, fragmented paper reports, limited and late dissemination], is impeding community and individual economic development....ict will mitigate situations such as described above by enabling 14 See ICT Report, pg

78 3 3 citizens, agencies and others access information resources through public information centers. It can play a major role in improving quality of life by providing citizens a much wider access to markets, services and opportunities to acquire skills, businesses and employment. 15 During negotiations, both sides agreed that CIDEV program is a public good program 16 to recognize explicitly that community centers would provide ICT access to people who could not otherwise get it through market forces alone and thus that public assistance was justified. Internationally, recognition of the potential value of ICT for development has been for some time a worldwide consensus. Figure 1, for example, shows the strong correlation (0.8), across countries, between an index of human development and one of ICT readiness, access and use in Figure 1. Human Development Index and Networked Economy Index, At the World Summit of the Information Society (Geneva, 2003) leaders from all over the world committed to an agenda virtually identical to the objectives of the ICTAD project, and for the same reasons, as shown in Box 2 below ICTs should be regarded as tools and not as an end in themselves. Under favorable conditions, these technologies can be a powerful instrument, increasing productivity, generating economic growth, job creation and employability and improving the quality of life of all. We must focus especially on young people who have not yet been able to benefit fully from the opportunities provided by ICTs. We affirm that development of ICTs provides enormous opportunities for women, who should be an integral part of, and key actors, in the 15 Assessment of Potential Socio-economic impacts of ICTs on Poverty Reduction and Service Delivery in Ethiopia. ICTAD Preparatory Study 16 ICTAD Minutes of Negotiation, Pg From ICT and MDG s A World Bank Group Perspective, December, 2003, pg

79 3 3 3 Information Society. We shall pay particular attention to the special needs of marginalized and vulnerable groups of society, including persons with disabilities. We are resolute to empower the poor, particularly those living in remote, rural and marginalized urban areas, to access information and to use ICTs as a tool to support their efforts to lift themselves out of poverty. We pay special attention to the particular needs of people of Least Developed Countries,..Landlocked Developing Countries,.. countries with conditions that pose severe threats to development, such as natural disasters.. Box 2. Extract from Geneva Declaration of the 2003UN World Summit of the Information Society Under these circumstances it seems appropriate for project designers to have chosen the growth of the ICT service industry as the most practical proxy to measure achievement of the project development objective. A supply response from this industry, whether directly or indirectly spurred by the project, is best possible evidence that capacity for economic use of ICT has increased across the economy So for example, if there were 15 computer maintenance companies in Amhara region in 2006 and 42 in 2009, as was measured by beginning and ending surveys, the project design asserts that its development objective has been advanced (and even accomplished, had there been a specific indicator agreed upon for Amhara, which there was not) regardless of whether or not this change can be traced to project outputs The basis for this assertion is that the project facilitated the creation of one business incubator in Amhara (Bahir Dar) with 13 client companies; helped train 99 teachers from TVET colleges and 23 employees from SMEs; and helped set up 10 community centers in the region. In addition the project assisted ETA to become a better regulator of the services offered by ETC, which contributed to the expansion of fixed and mobile telephone subscribers in the region. The project also assisted EICTDA to issue a critical localization standard and transliteration engine for Amharic to allow rendering of software and names in local language. Finally the project mobilized local government to support all these initiatives and convened people from industry, government, NGOs to discuss them and support their creation All these actions in Amhara and similar ones across the 11 regions of the country contributed and spurred the growth of the ICT services industry and will continue to do so in the future. This is the closest that ICTAD design can get to a true impact indicator for the time being and therefore the accomplishment of indicators to this effect under the results framework merit a satisfactory rating for PDO. 18 Geneva Declaration of the UN World Summit of the Information Society in 2003, par. 8. The declaration was endorsed by 50 Heads of state/government and Vice-Presidents, 82 Ministers, and 26 Vice-Ministers from 175 countries as well as high-level representatives from international organizations, private sector, and civil society. 59

80 179. A small, five-center survey of employment outcomes was nonetheless done for the ICR (see Table 24) which showed an encouraging 27% result among formerly unemployed trainees. In addition, it is worth noting that administration of each center generates direct employment for about 5 people. Center No. Trainees Employed % Une mplo yed % No. Employed after training Employment outcome Remarks M F Dire Dawa % Korem % Beza % Dera % Shashe mene % Avg. 27% Over 60% of trainees are GoE employees Over 40% of trainees are GoE employees Trainees all women, 12 are organized as SME Over 70% of trainees are employees (GO or NGO Staffs, Teachers ) Over 40% of trainees are GoE employees Table 24: Graduates employed from a sample of five CIDEV centers 180. Two consultant field studies were also conducted to assess the CIDEV Program in July and December, The first 19 profiled 26 centers and the second 20 evaluated the program based on visits to 27 centers. Results show strong benefits for over 70,000 people a month throughout the country in terms of skills development, convenience gains, access to information, access to telecommunications, equity gains (increased ICT access for the very poor, women, persons with disabilities and HIV/AIDS). Also visible are increased volunteerism, administrative and financial skills and ICT center stewardship within the community 21. Costs 181. It is not possible within a 5 year period to develop policy, build institutions, create human capacity and expect to measure impact of ICT on economic development. ICTAD accordingly focused on creating capacity for development, not development itself, and it fully met and exceeded its targets in this respect Whether this was accomplished at reasonable cost, in the absence of quantifiable benefits, must be discerned by examining unit costs against internal or external norms. Table 25 below shows unit costs for the key outputs of ICTAD. Most of the actual costs were incurred under competitive procurement (except for virtual incubator grants) and 19 Community ICT Centers in Ethiopia, by Elias Berta, July, Community ICT Centers - An Evaluation Assessment, by Esther Scharf, December, Community ICT Centers in Ethiopia p.15 and Project Summary of ICT Centers. Esther Scharf,

81 can thus be assumed to be the lowest possible. The useful life of outputs is conservatively assumed to be that of the main assets acquired (4 years for technology and 10 years for buildings) and the number of outputs is that achieved under the project without any growth projection Under these assumptions project unit costs appear very reasonable, even though meaningful country comparators were not readily found since project activities were new to Ethiopia. US$ 28,238 for each of the 23 policy, legal, regulatory and standards instruments developed (see Annex 2, Table 7) seems reasonable given the national consultation and government-wide impact of these instruments. Unit costs of $ 77 per refurbished computer (against USD 825 in the market see Table 15), $ 434 per trained TVET teacher/sme opeator and $4,391 per incubating startup company similarly appear very reasonable. US$ 2,684 unit cost per trained EICTDA staff member seems high but it is skewed by the high cost of 48 people trained abroad. Unit Name of Output Units/year Years Unit cost USD Policy, Legal and regulatory Instruments 23 1 $ 28,238 Trained EICTDA staff $ 2,684 Tenant Incubator companies $ 4,391 CRTC Refurbished Computers 9,500 4 $ 77 Trained TVET teachers & SME Operators 1,221 1 $ 434 Community Center users 928,727 4 $ 0.97 T U C K ICTAD O 184. The unit cost for each CIDEV center user (USD ) seems moderate since it encompasses both simple services (sending a fax) and complex ones such as a computer literacy course. In assessing the reasonableness of these costs one should have in mind that the Centers play a social role by giving access to people who would not otherwise have it and by heavily subsidizing the prices. In effect: Most centers charge about half the price of privately-run businesses in their areas. Some centers scale their training fees based on people s ability to pay and offer even free training for members in need (orphans, people with disabilities etc.). To give an example, the Yirgalem Youth Community ICT Center offers basic computer training at a cost 50 ETB/month, while commercial providers charge 100 ETB/ month. Two people with disabilities from each of the six kebeles of Yirgalem receive training free of charge. In many cases Centers are the only ICT access facility in their area. For example, the Wonago center in the Gedeo Zone of the SNNP region (365 km from Addis), 22 For BIC, an average of 15 tenant companies (currently 11) per year per incubator and 20 virtual incubation companies in Addis (currently 17). For the CRTC, 9,500 refurbished computers per year, and for CIDEV, 77,394 users per month. 23 This already factors in average US$ 0.05 recovered through user fees. 61

82 is the only ICT facility in its area and the nearest facility is 30 km away in the town of Dilla. An average of 520 people uses the Wonago center every month Overall, all the unit costs of ICTAD outputs appear very reasonable. However, this is still a qualitative assessment and opinions may vary until in a follow on project a full ERR can be calculated on the basis of quantifiable economic benefits It must be noted that PMU staff contribution to the project came at costs below market value. As noted, PMU staff salaries were below market and yet a core team stayed for the duration and saw the project through. In the case of DED advisors, in addition to their contribution being a grant and having been increased 61% over original plans (from USD 1.8 to USD 2.9 million), the market costs of similar skills for similar length of time would have been a multiple of this sum. 62

83 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Lending Abdoleza (Bobak) Rezaian Task Manager AFT Task Team Leader Michael Broemmel Consultant AFTEG Project design, supervision Jalal Abdel-Latif Consultant WBIRC Tafesse Freminatos Abrham Consultant AFTFM Fin, Mgmt. Abebaw Alemayehu Sr. Urban Dev. Specialist AFTUW Tesfaye Ayele Procurement Specialist AFTPC Procurement Edward Felix Dwumfour Sr. Environmental Spec. AFTEN Supervision/ICR Wuleta Giday Program Assistant AFCE3 Local supervision Maria F. Kail Operations Analyst SECPO MTR Support Gareth Locksley Sr Telecom. Spec. CITPO Telecommunications Eduardo Talero Consultant ECSPE E-Governance, ICR Mulat Negash Tegegn ET Consultant AFTFM Fin. Mgmt. Abiy Admassu Temechew Procurement Analyst AFTPC Procurement Sr. Private Sector Menbere Taye Tesfa Development Specialist AFTFE Yetemwork Wolde Information Analyst AFRIT IT Procurement Reinhard Woytek Sr. Operations Officer AFTRL Eshetu Yimer Sr Fin. Mgmt. Specialist AFTFM Fin. Management (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY FY FY Total: Supervision/ICR FY FY FY FY FY FY Total:

84 Annex 5. Beneficiary Survey Results N/A Annex 6. Stakeholder Workshop Report and Results 187. The project s closing workshop was an enthusiastic gathering of all the stakeholders that made evident their widespread satisfaction with the work done and accomplishments, their expectation for a follow-on operation, and their clear awareness of the difficulties to sustain the project s results in the absence of further government help Beyond that, the workshop was filled with moving testimony from project beneficiaries about the impact of the project on their lives. This is something difficult to convey in a formal report like this but is nonetheless important for all who think that development is ultimately defined by how the most vulnerable members of society are given opportunities to grow and exercise their rights. 64

85 Annex 7. Summary of Borrower s ICR and/or Comments on Draft ICR T E S B ICR Information and Communication Technology (ICT) is a powerful tool to support social and economic development. It is widely accepted that Information and Communication Technologies (ICT) play an important role in national development and is instrumental for alleviating poverty, accelerating development and promoting good governance. It is the indispensable factor to intervene the multi-faceted problems the country faces. The Ethiopian Government realizes that the application of ICT technology would best accelerate and enhance the rate of economic growth and alleviation of poverty. It is with this understanding that the government developed new ICT policies and strategies to increase productivity, improve infrastructure, reduce costs. Several ICT oriented initiatives have been started, involving various government and non-government institutions and the private sector. Major steps have been taken by the government to develop and promote the ICT sector with high priority. These initiatives integrate major institutions and government bodies like the Ethiopian ICT Development Agency. EICTDA was established as a new agency in July 2003 to be the responsible to promote the use of ICT. The ICTAD project was launched under this newly established Ethiopian ICT Development Agency (EICTDA) in cooperation with the World Bank and German Development Service (DED). The overall objective of ICT Assisted Development Project was to assist communities to improve their livelihood through the use of appropriate Information and Communication Technologies (ICT) that facilitate increased access to markets, development information, and delivery of public services. After the mid-term review the objectives were changed to: Increase the use of information and communication technology by communities in project target areas. As a long term impact, ICTAD was designed to support the government s efforts in reducing/eliminating the pertaining poverty situation in the country. The project was organized in two major components: P I S C A C S C Since effectiveness of the DCA in June 24, 2005, the ICTAD project has been executed with undisrupted and full support from the government, the World Bank s task team leader (TTL) and country office, the German Development Service (DED), partner 65

86 institutions, the stakeholders and the community at large. Along its major developmental objectives the project has increased capacities for the key regulatory and policy making institutions in constructing an enabling legal and policy environment for ICT development. The Information and Communication Technology Assisted Development Project (ICTAD) unlike many other development projects ended within the stipulated time frame of the project plan. Although there was a delay at the start of the project, after the mid-term review major objectives of the project and targets are attained and often over achieved. Policy and Institutional Support Component One Laws are enacted which allow competitive provision of ICT related goods and services. New Policies, standards, laws, directives and regulations are adopted to create a better environment for the ICT sector development. Currently, EICTDA is in a position to fully accomplish its mandate as stipulated in its 2003 Proclamation. The institutional and professional capacity of the Agency has been upgraded with the support of the ICTAD project. All stakeholders and project partners (EICTDA, EBA, ETC, PIC, ECSC, CTIT, universities and regional and federal government offices) have actively participated in implementing the projects components in line with their respective mandates. Many of these project partners benefited from the project by support of strengthen their working capacity. With regard to capacity building of the staff of the partner institutions, a total of 765 staff members participated in short and long term trainings (27 are BSc/BA and above) the remaining are short term training participants, 79 professionals participated in short term external trainings, and 82 persons participated in study tours. Ethiopian Broadcast Authority (EBA) developed a radio licensing scheme. The proclamation of EBA has been amended so as to include the community radios. This helped the Authority to issue community radio licenses. As the performance report shows, most of the project targets have been accomplished or some have been delivered more than 100%. Some of the achievements are listed below. The national ICT policy and ICT security policy has been developed and approved by the council of ministers, Thirteen ICT standards developed (93%), Three national ICT guidelines have been approved (100%), The amendment of the radio proclamation and licensing has been effected by EBA (100%), Eight community radios are licensed (160%) 66

87 The ICT security policy has been developed Five ISPs are licensed Application and Community Support Component two It was initially planned that in selected TVET training centers at least 500 ICT trainers have to be trained. The achievement at the time of this report (training is ongoing) is: 576 TVET teachers are trained (115%). With regard to the SMEs, the target set was selected ICT SMEs supported within the context of FeMSEDA, however 645 SMEs operators have been trained (645%). Although it was planned to establish two business incubators in selected Regional Governments, the actual business incubation centers established were 4 (200%). In addition, 18 virtual incubates are established in Addis Ababa. One fully equipped and networked Computer Refurbishment and Training Center (CRTC) is established and operational. Computers deployment plan was 15,000; however, the number of CRTC computers deployed until end of June 2010 is over 5,000 (performance level is about 33%). It was also planned to establish 40 ICT Community Centers under the CIDEV component, but today 54 centers are established; hence the performance is 135%. In addition 11 youth focused ICT service centers are established in collaboration with the Ministry of Youth and Sports. These community ICT centers are able to conduct several Basic computer trainings, and provide other ICT services in very remote areas of the country. It was planned to train 1000 persons in Community ICT centers. Actually 3,283 people have been trained until today (training is ongoing), the performance is 328.3%, It was planned to establish five community radios, however, the achievement is seven (175%), and the 8th one is approaching to start operation. The PMU has been able to manage and follow up all project components, subcomponents and ICT promotions. Several workshops, seminars, community level trainings have been organized and implemented by the project. With this effort many project partner staff members have got the chance to upgrade their professional skills. This also increased the efficiency and effectiveness of the partner institutions. 24 The document Emergency Food crisis response program of the federal democratic republic of Ethiopia from November 25, 2008 talks about a target of 200 SMEs trained. This target was not communicated to the project team and never made it to the planning documents. With a target of 200, the performance would reduce to 322%. Subsequent review missions (09/02, 09/06, 09/10, 10/02, 10/04) did not correct this difference. 67

88 Fund Utilization The project has fully utilized the allocated budget both from the Government and IDA. The amount utilized for all project components from the Government/ counterpart fund is Birr 43,880,562.73, whereas the estimated budget was Birr 46,253,700.00, overall counter fund performance level is 94.87%. The utilized amount from IDA s fund is USD 16,148,394.77, whereas the IDA s estimated budget was USD 16,148, this shows IDA s fund utilization level 100%. In general, ICTAD project has adequately implemented the project s objectives and evidenced that ICT can better support the government s effort in providing ICT services to improve the access to information in marginalized areas of the country and alleviating poverty. I B World Bank The World Bank has sufficiently supported the project since the inception time and has contributed significantly to its completion. A regular deployment of the Bank s supervision mission has given the project to enhance its performance level, mainly after the Mid-term Review of The Bank s country office also supported the project in providing advices and technical support in expediting procurement of goods & equipment, consultancies, and M&E activities. ICTAD project has worked under one Task Team Leader (TTL) since the commencement of the project, which enabled the project and the Bank read each other and move forward without interruption and information gap. Major challenges with the WB were delays in clearance of No objection, which actually improved after the Mid-term review of the project. The Bank s mission and EICTDA have agreed to meticulously monitor most delayed procurement activities of the project. Measures taken in this regard are interventions made by EICTDA through arrangement of fortnightly meetings to evaluate progresses made by PMU and each project partner at the federal level. Such measures helped in giving timely appropriate directions to enhance procurement performances (local and international procurements) The German Development Services/DED The German Development Service (DED) was one of the major partners of the ICTAD project. DED actively supported the project in providing technical assistance by deploying 10 technical experts during the period of ICTAD. The total contribution of the DED has a value of 2.1 Mio EUR ~ 2.8 Mio USD. 68

89 The DED s main intervention areas were private sector development, e-learning development in colleges, community ICT centers and radios, and capacity building for several partner institutions. The integration of the advisors was good in most cases; their experience in their fields of specialization was helpful for the progress of ICTAD. Many of the achievements are related to the hard working ICTAD teams and to the experience and dedication of the technical advisors. In a few cases the experience and knowledge of the TAs could not be fully absorbed because of the low capacity of the project teams (number of team members, skills and experience, staff turnover). Whenever possible, the ICTAD project management tried to strengthen the teams to make more use of the TAs by knowledge transfer to counterparts and project teams. The ICTAD program officially ended on May 31 st, 2010 but the German Development Service (DED) has signed an agreement with EICTDA to extend the contracts of three technical Advisors. This should help to sustain the community projects (ICT centres and radios) and the ICT-Incubation component of ICTAD. 69

90 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders German Development Service (DED): Comments by Guenter Ozdyk, DED coordinator and TA to PMU, EICTDA and other partner institutions. The DED congratulates all project partners for the successful implementation of this complex ICTAD program. Honor is due to team members of ICTAD, EICTDA and all partner institutions. Special gratitude goes to the Director General of EICTDA, today Minister of Communication and Information Technology and to the Project Manager ICTAD. Also the involvement of the World Bank teams contributed to the successful completion of the program. Special thanks are given to the team leader of the World Bank for his commitment. Although many review missions were dissatisfied with the performance of the ICTAD program, especially in the first 2-3 years, it was very obvious that under the given situation the PMU performed extremely well and the team delivered outstanding outputs. The gap between the expectations of the donors and the results were induced by planning issues. The planning of the project targets did not sufficiently take into consideration the pre-conditions and the capacity gaps of the partner institutions. Documents of gap analysis or resource estimation are not available. Especially the time needed for CIDEV and CR awareness creation and training of volunteers was not considered. Many of the DED experts had a long experience in project management and they complained about the absence of communication guidelines among the main players GoE, the DED and IDA. This created a lot of conflicts and was obstructive to better results. Also the absence of project charters at project start and clear roles and authorization of the various team members was reason for complaints. It would also have been helpful if the project had more flexibility in reducing targets because of the resource situation in favor of quality and sustainability of results. Today many projects are implemented in stages with a gateway approval process from one stage to the next stage. This is very useful to avoid failures in early stages and to mitigate the risk of program blowup. Mid Term Reviews could be used as one of these gateways for project components with clear rules for dropping non-performers or with clear assignment for solid restructuring a project towards better results. The DED agrees with the report, ICTAD was successful at the end. This success was possible because of Heroic Effort of many team members. ICTAD has produced a lot of lessons learned which hopefully will be used for similar projects. 70

91 Annex 9. List of Supporting Documents Ethiopia - National ICT Capacity Building Program , Updated Version, March 2002, Ministry of Capacity Building. Bridging the Digital Divide and Paving the Way for Development Community ICT Centers in Ethiopia. EICTDA with support from DED, July, 2009 Community ICT Centers - An Evaluation Assessment Views from Ethiopia, By Esther Scharf, December Ethiopia: Sustainable Development and Poverty Reduction Program, Federal Democratic Republic of Ethiopia (FDRE), Ministry of Finance and Economic Development (MOFED), July, 2002, Addis Ababa An Independent Review of World Bank Support to Capacity Building in Africa: The Case of Ethiopia, Corporate Evaluation and Methods, Operations Evaluation Department, The World Bank, March 11, The National ICT for Development (ICT4D) Five Years - Action Plan for Ethiopia [ ]. Draft (Version 4.02), the Federal Republic of Ethiopia, Ministry of Capacity Building. May, 2006 Country Assistance Strategy for the Federal Democratic Republic of Ethiopia, Country Department 6, Africa Region, International Development Association, March 24, Country Assistance Strategy for the Federal Democratic Republic of Ethiopia, International Development Association, Ethiopia Country Management Unit, Africa Region, April 2, Ethiopia: Building on Progress - A Plan for Accelerated and Sustained Development to End Poverty (PASDEP), (2005/ /10), Volume I: Main Text, Ministry of Finance and Economic Development (MoFED), September, 2006, Addis Ababa Project Appraisal Document on a Proposed Credit in the Amount of SDR 17.1 million (US$ 25.0 million equivalent) to the Federal Democratic Republic of Ethiopia for an Information and Communication Technology Assisted Development Project, The World Bank, August 18, 2004 Development Credit Agreement, (Information and Communication Technology Assisted Development Project) between Federal Democratic Republic of Ethiopia and International Development Association, Credit Number 3985 ET, dated January 4, Emergency Food Crisis Response Program of the Federal Democratic Republic Of Ethiopia under The Global Food Crisis Response Program - Emergency Program Paper for a Proposed Additional Financing IDA Grant in the Amount Of SDR Million (US$ 25 Million Equivalent) for the Productive Safety Net APL II Project and Proposed IDA Grant in the Amount Of SDR 85.5 Million (Us$127.5 Million Equivalent) and IDA Credit in the Amount Of Sdr82.1 Million 71

92 (Us$122.5 Million Equivalent) for a Fertilizer Support Project, November 25, 2008, Agriculture and Rural Development, Human Development 3, Country Department 3, Africa Region, The World Bank. Ethiopian Information and Communication Technology Development Agency (EICTDA), Information and Communication Technology Assisted Development Project (ICTAD), Status Report Six Month EFY 2001, (July-December 2008), Submitted to: Director General EICTDA, the World Bank, MoFED, Reporting Period: 8th July2008-8th January 2009, Prepared By: ICTAD PMU, January 2009, Addis Ababa Final Report on Application of ICTs for Improved Health Service Deliveries in Ethiopia, By Mohammed Mussa (Dr.), Consultant, Ministry of Capacity Building, ICT Capacity Building Program, Addis Ababa, Ethiopia, November Telecommunication Sector Cost Analysis Methods and Pricing, Revised Final Report, Federal Democratic Republic of Ethiopia, Ethiopian ICT Development Authority, Martin Taschdjian, PhD, Addis Ababa July 2008 Environment, Key Assumptions, Market Trends, Information Base and Requirements, Inception Report (Revised-2), Ethiopian Telecommunication Agency (ETA), Version: July Report on Assessment of Socio-Economic Impact of Information Communication Technology, (Zero Draft), Ethiopian Information and Communication Technology Development Agency (EICTDA), Getachew Demeke, Ph.D., October 30, Federal Democratic Republic of Ethiopia, Report on 15 ICT Indicators, Final, Ethiopian ICT Development Agency, Selam Development Consultants, Addis Ababa, October, ICT Assisted Development Project, Monitoring and Evaluation Report on Information Need of Farmers and Pastoralists, Ethiopian ICT Development Agency, Revised Final Report, November, ICT Assisted Development Project, Monitoring and Evaluation Report on ICT Laws Enacted and ICT Business Status in Major Towns of Ethiopia, Ethiopian ICT Development Authority, Revised Final Report, November, Federal Democratic Republic of Ethiopia, Report on 15 ICT Indicators, Final, Ethiopian ICT Development Agency, Selam Development Consultants, Addis Ababa, February, ICT Assisted Development Project, Monitoring and Evaluation Report on Information Need of Farmers and Pastoralists, Ethiopian ICT Development Agency, Revised Final Report, February, ICT Assisted Development Project, Monitoring and Evaluation Report on ICT Laws Enacted and ICT Business Status in Major Towns of Ethiopia, Ethiopian ICT Development Authority, Revised Final Report, February,

93 Ethiopian Information and Communication Technology Development Agency, EICTDA, Information and Communication Technology Assisted Development Project, ICTAD, Mid Term Evaluation Report, (June 2005-March 2008) Information Society Statistical Profiles 2009, Africa, ITU-D Development Study for the sustainability of the ICT Business Incubation Projects in Ethiopia: December 2009 March 2010, Leon Lourens (RSA) in collaboration with Rajeev Aggarwal (Rwanda) and Teshome Mergia (Ethiopia), For EICTDA, ICT Assisted Development Project, ICTAD, Final Report, March, EICTDA - Information and Communication Technology Assisted Development (ICTAD) Project, Performance Report (Terminal), (June 2005-May 2010), Addis Ababa, Ethiopia, May 2010 EICTDA - ICTAD Project, Performance Report (Terminal), (June 2005-May 2010), Version 1.3. Addis Ababa, Ethiopia, June 23, Ethiopian Information and Communication Technology Development Agency (EICTDA), Information and Communication Technology Assisted Development (ICTAD) Project, Implementation Completion and Results Report, Version 1.4, (June 2005-May 2010), Addis Ababa, Ethiopia, August

94 Annex 10 - List of people met Name Ato Tefera Walluwa, Minister of Capacity Building, Government of Ethiopia Ato Debretsion G/Michael, Director General, EICTDA Ato Tessema Geda, Project manager, ICTAD PMU P Ato Eskinder Birhane, PMU Financial Officer A B D ICTAD P O A W A ICTAD P O A S M PMU M E O A J H PMU M E O M H T DED C D E M H R DED A ICTAD I M D M DED T A CIDEV D M Mr. Gunter Ozdyk, DED Technical Advisor to ICTAD s PMU Mr. Michael Broemmel, DED Cooperation and M B World Bank Consultant M C S DED A ICTAD C S C R M J W DED A ICTAD L ECSC A T K EICTDA D S R A L A D HRD EICTDA A G S M PIC Mr. Haddis Estifanos Fenta, PIC Ms. Bridget Cochrane, Manager, CRTC. A T K Y ICT C K ICT W A A ICT O H P D HPD O C C A O G O G Y ICT R C A T T SICT B I M A A M N B D T BIC M E B A A D T A B R D G ETA 74

95 Name A T E P D ETA A M A F M ETA M E S G M P P P U I A A E M D L P E I T P A M J A L C S C S P C G P A D U M K O W B C D K E S M A B R ICTAD T T L B R W B M R C A C D E L S P H D S E W B M T A WB P O ICTAD T A M W G WB P A ICTAD W G P M T F WB F M T F O ICTAD A P W M Y W W B 75

96 Annex 11 - Developments in Ethiopia s Telecom Services Telecom Sector Sector expansion underpins sustainability of project outcomes. ICTAD s objectives with respect to the telecommunications sector were deliberately limited to (i) strengthening the regulatory agencies; (ii) issuing a first set of ISP licenses to private providers; (iii) issuing community radio licenses, and (iv) pilot-testing the expansion of telephone services to rural areas through public private partnerships. To determine whether sector expansion adequately underpins the sustainability of project outcomes, an examination was made, as shown below, of important developments in the sector during the project period. The findings are that major expansion of the telecom infrastructure indeed adequately underpins sustainability and possible scaling up of Project results. However, poor quality of mobile and Internet service and high cost of broadband Internet service can still jeopardize project achievements. In the absence of competitive forces, improvements in quality and reduction in costs depend directly on GoE s management of the sector. While overwhelming international experience would indicate that sector growth in terms of access, quality and affordability of services could have been stronger under a competitive sector structure, the significant accomplishments of the GoE in the telecommunication sector, as evidenced by the figures below, must necessarily be recognized. Subscriber Base Ethiopia: Growth leader in mobile telephony. According to ITU Africa remains the region with the highest mobile growth during the period Within Africa, Ethiopia was the fastest growing country in mobile cellular telephony with a compound growth rate of 128% (see Figure 2 below). 76

97 Figure 2. Ethiopia: Growth leader in Mobile Cellular Growth in Africa 25 During the period mobile subscribers grew % from 0.87 to 4 million. By 2010 the number of mobile users may have further increased to 8.6 million according to ETA (see Table 26 below). Rapid Growth in fixed telephony and Internet. As illustrated in Table 26 there are discrepancies between various estimates of the subscriber base for telecommunications services in Ethiopia. However, ITU data will be used for comparison since this was agreed for ICTAD s result framework. According to ITU therefore, there were 910,000 fixed line subscribers in Ethiopia and 71,000 Internet subscribers in This represents 125% growth in fixed line subscribers and 328% growth in Internet subscribers during the project period. ITU s 2009 estimate of Internet users (as opposed to subscribers) is 0.45 million, which represents 0.54 Internet density (users per 100 people) in the country, up from 0.31 in Users of Telecommunication Services in Ethiopia (millions) Fixed Line Mobile Internet 2006 Subscribers 2006 (per ITU stats) Subscribers per 100 inhabitants in 2006 (per ITU statistics) 0.95% 1.13% 0.03% Internet Users 0.24 Internet Users per 100 inhabitants 0.31% 2009 Subscribers per ITU statistics Subscribers per ETA s 5/2010 ICTAD closing report ITU Information Society Statistical Profiles 2009 Africa, pg

98 Users of Telecommunication Services in Ethiopia (millions) Fixed Line Mobile Internet Subscribers per ETC s web page on Subscribers per 100 inhabitants in 2009 (per ITU stats) 1.10% 4.89% 0.09% Internet Users 0.45 Internet Users per 100 inhabitants 0.54% Changes between 2006 and 2009 Subscribers % % % Subscribers per 100 inhabitants 116% 433% 300% Internet Users 187% Internet Users per 100 inhabitants 174% T G E T S E Persistent low performance in Africa. While progress is significant, particularly in mobile telephony, on a comparative basis the current figures still place Ethiopia among the lowest five countries in Africa in all the three services. According to ITU s ICT Development Index 2009 Ethiopia s rank is 147 th out of 154 countries and this ranking did not changed in the 5 years covered by the index ( ). Infrastructure Backbone Countrywide fiber optic backbone deployed. A 10,000 Km. fiber optics line has been laid throughout the country which can deliver state-of-the-art voice, data, video and text services to 90% of the territory 27. This puts Ethiopia among at the top in Africa in terms of broadband capacity and creates leapfrogging opportunities of strategic importance, for example to convert the whole country to Voice over IP (VOIP) telephony bypassing further expansion of the old, copper wire-based plain old telephone service (POTS). It also means that Ethiopia now has infrastructure to provide triple-play (voice, internet, telephone) service throughout the country. Utilization of this infrastructure in a regular and reliable manner is still in the future and is discussed below under Quality of Service. GSM is the global standard being used in Ethiopia for mobile cellular telephony and SMS services. It is deployed across the whole nation. Actual availability, however, is to be checked the respective zonal/regional and Dealers as per ETC s web page instructions, due to network management issues. General Packet Radio Service (GPRS) is a technology to provide Internet access over the GSM network which requires connecting the GSM to the fiber optic backbone. The connections have been completed in Ethiopia but usage is minimal mainly due to high pricing (Birr 40 cents per megabyte transmitted) and to network management issues discussed below under Quality of Service ITU Statistics downloaded from on According to data supplied in ETA s project closing report. 78

99 CDMA is a wireless technology that can be used for voice, internet and fax services. It is being used in Ethiopia mainly for internet access in areas beyond the reach of the fiber optic backbone. Presently the technology has been deployed in 90% of the country, but actual service is still lacking in most of the country 28 due to network management issues discussed below under Quality of Service. Rural Connectivity has expanded beyond original project targets. At the start of the project ETA had recognized clearly the problem and framed the objectives to which ICTAD would be pointed: the existing strategy of the government, Agricultural Development Led Industrialization (ADLI), requires the telecom sector to focus on universal access of telecom services at the regional, woreda, other towns and kebele level. However the telecom services are still highly skewed in the big towns like Addis Ababa, Nazreth, Bahirdar, Diredawa and Others. 29 ICTAD therefore set out to provide funding and technical assistance for private sector operators and communities to connect to ETC s points of presence (PoP) primarily through phone lines. Its objective was to provide access to about 3000 community phones over the project period, covering communities in an area of about 100,000 square kilometers. During project implementation, however, the government gradually shifted its thinking on the business model for community phone operators and eventually decided to pursue the same objective in a larger scale but with a different business model. This was the subject of considerable concern in all supervision missions during the first half of the project and eventually resulted in formal agreement to restructure the project and cancel this subcomponent along with US $10 million of credit funds. In essence therefore, restructuring after the MTR increased the share of counterpart financing and raised the bar on the original rural connectivity objectives of the project. Results wise ETC far exceeded project objectives by connecting between 10,000 and 14,000 kebeles 30 under its Rural Connectivity Program (RCP) by the end of the project. Six-fold expansion of international bandwidth. The bandwidth of Ethiopia s international broadband gateway has constrained so far improvement of Internet service, quality and cost of international voice service and supply of third-party Internet service access 31. The gateway has been operating with a total of Mbps capacity, of which 28 ETC s web page warns that: Currently, the network is deployed in: Addis Ababa, Fiche, Wolkite, Woliso and Jimma, but availability has to be checked in the respective telecom sales office. 29 ETA s 2004/2005 Annual Statistical Bulletin, pg. 5. Downloaded from on The higher number is according to ETA s closing report. Survey under ICTAD s own final M&E Report counted only 10,696 fixed line resellers (see pg. 88). 31 According to ETA, four ISP licenses issued to private companies could not be made operational because of this constraint. 79

100 537 Mbps are through optical fiber, Mbps through satellite and 18 Mbps through microwave. On March 30, 2010 ETC announced having signed a contract with SEACOM Telecom company for the provision of international bandwidth connectivity through submarine fiber optic cable system via Djibouti, with a total cost of USD $47 million. The agreement will provide capacity of 20 STM-1 32 for a total of 3,100 Megabits per second, thus raising the capacity of the gateway by %. It will also raise the current 537 Mbps capacity of fiber communication system of the country to 3,637 Mbps, or %. 33 Out of this total leased capacity, 16 STM-1 or 2,480 Mbps capacity will be utilized for commercial purposes while the remaining 4 STM-1 620Mbps capacity will be used for EICTDA-Government development program. This segregation of bandwidth is indicative of the priority that the government gives to the expansion of e-services to the entire population. SEACOM is a company that has a total capacity of 1.28 Tbps /17,000 Km/ undersea fiber optic cable system connecting eastern and southern African countries with the rest of the world. African countries which are connected to the SEACOM system to date include South Africa, Mozambique, Tanzania, Kenya, Rwanda, Uganda, Djibouti and Ethiopia. Tariffs Generally high ICT Price Index in Africa. According to ITU, Compared to the world, the 2008 ICT Price Basket is on average significantly more expensive in Africa. Whereas at the global level it represents 15 per cent of the monthly GNI per capita, in Africa it represents 41 per cent 34. ITU goes on to explain that this situation is largely due to high fixed Internet broadband prices as well as to the shortage of international connectivity in the region. Considering that Ethiopia in 2008 had the lowest GNI per capita in Africa, its 14 th place ranking in the continent s ICT Price basket 35 (at 41 % of GNI) indicates that its pricing structure is not out of line with that of the continent. To illustrate this Figure 3 from ITU shows how in the Internet component of the price index Ethiopia is very close to the average for the continent. 32 Synchronous Transport Module level-1 is the transmission standard on a fiber optic network. Each STM-1 has a rate of Mbit/s. 33 Information from ETC s web page ( accessed ), was confirmed with Director General of EICTDA. 34 ITU Information Society, Statistical Profiles 2009 Africa, pg Idem, Table 3.3 ICT Price Basket, Africa 2008, pg

101 Figure 3. Africa: Cost of mobile service, as a % of GNI per capita 36 Unfortunately, due its low GNP Ethiopia ranks as the second most expensive country in the world for fixed line broadband tariffs as proportion of monthly income (2085%), according to ITU s 2009 statistics. Against this backdrop, the changes in tariffs costs have not been uniform, except that if one takes into consideration the 80% accumulated inflation during the project period 37 an argument can be made that they have all declined in real terms. In nominal terms there have been both increases and decreases as shown in Table Neither can be readily explained in terms of related cost variations to the operator. Increases 3 Internet dial up usage charges have increased the most (42.86%). 3 Fixed to mobile regional and international calls and mobile to mobile calls have increased around 11%. This contradicts targeted 30% decrease in fixed to mobile call cost, at least in nominal terms. Decreases 3 Fixed to fixed local calls and Internet dial up subscription charges have decreased the most (78.02% and 76.68% respectively). 3 Fixed to fixed international call charges have decreased 31.73%%. 3 Internet usage charges at cafes has decreased 18.77% 3 ADSL 2mb broadband Internet monthly charge has decreased 77.36%. 36 ITU Information Society, Statistical Profiles 2009 Africa, pg From 38 The Project s 2010 Closing- M&E report has more detailed data on tariff changes. 81