# III.3 Risk layering through the Continuum of Response

Drought-risk management within Ethiopia will be based on the consecutive use of the PSNP core budget, PSNP _woreda_ -level budgets, PSNP federal level contingency budgets and funds raised through the HRD appeal process. This consecutive process of using available funds is specified, within PSNP IV, in the Continuum of Response<sup>33</sup> summarized in Table 1. Note, in particular, that according to the PSNP IV Programme Implementation Manual (PIM), the PSNP FCB will be the first line of financing for response to transitory food needs in PSNP regions, and humanitarian resources will be used for food needs in PSNP regions only if the FCB is insufficient to meet the anticipated needs. Non-food requirements are met entirely by humanitarian resources.

TABLE 1: CONTINUUM OF RESPONSE

|**Funding Source and Purpose**|**Trigger**|**Where Resources**<br>**can be Used**|**Implementation**<br>**Responsibility**|
|---|---|---|---|
|**Woreda Contingency Budget**<br>||||
|To address exclusion error<br>identified through appeals<br>To address transitory needs<sup>34</sup><br>**Federal Risk Financing/Contin**<br>|<br>Appeals<br><br>Ongoing (improved)<br>Early Warning<sup>35</sup><br>**gency Budget**|Anywhere within<br>woreda where the<br>safety net is<br>implemented<br>|<br>Woreda Food Security<br>Desk (WFSD)|
|To address transitory needs|<br>Annual Needs<br>Assessment and other<br>hotspot assessments<br>(real time early<br>warning data)|In regions where<br>the safety net is<br>implemented|<br>In existing operational<br>areas – WFSD.<br><br>In non-operational<br>areas - WEWRD<sup>36</sup>and<br>other humanitarian<br>actors as appropriate|
|**Ad Hoc Humanitarian Respons**<br>|**e**<br>|||
|To address transitory needs|<br>Annual Needs<br>Assessment and other<br>hotspot assessments|Nationwide|<br>All actors with<br>operational capacity<br>(WFSD, WEWRD, WFP<br>and other UN actors<br>NGOs etc.)|

The use of resources according to the Continuum of Response can be linked to a risk layering approach (see Annex 2 for further details), whereby different risk financing instruments are made available depending on the frequency and severity of the disaster event. In particular, chronic poverty is addressed through the PSNP’s core caseload. High frequency, low severity droughts occurring on a biannual or annual basis in specific _woredas_ are addressed through the PSNP’s _woreda_ -level contingency

> 33 While the continuum of response has been agreed by government and PSNP stakeholders for some time in practice the use of humanitarian resources has been triggered before the contingency budgets have been fully utilized in all major recent drought events.

> 34 This budget can both be used to respond to (i) transitory needs among safety net clients (by increasing the number of months of support); and (ii) transitory needs among non-safety net clients (by adding them temporarily to the programme payroll).

> 35 These improvements will both focus on the simplification of the data needed to trigger response, but also the development of analytical capacity to use and make effective and rapid decisions on the basis of these data. This is in line with the DRM-SPIF’s agenda of ensuring that early warning and risk assessment tools are harmonized into one system to allow effective decision-making.

> 36 Woreda Early Warning and Response Directorate.

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