# I. Introduction

Ethiopia is frequently and severely affected by drought, with 70%<sup>1</sup> of the Ethiopian population at risk of disasters and climatic variability. This is epitomized by the 2011 drought in the Horn of Africa, which affected more than 12 million<sup>2</sup> people across Ethiopia, Somalia, Djibouti and Kenya. Droughts are associated with high economic costs, reducing Ethiopia's GDP by 1% to 4% in major event years<sup>3</sup> , causing a drag on economic growth and slackening the speed with which the poor can be lifted out of poverty. Today, approximately 42%<sup>4</sup> of GDP is generated through agricultural production and 85%<sup>5</sup> of the population is employed in the sector, resulting in the vulnerability of many Ethiopians to hydrometeorological hazards such as drought. Severe droughts occurring every three to five years cause crop loss and the starvation of livestock, leading to food insecurity among the affected population and jeopardizing the lives and livelihoods of many Ethiopians. Since 2000, approximately 6.2 million people have been affected by climatological hazards every year<sup>6</sup> , leading to the issuance of humanitarian appeals for assistance to an average of 2.5 million people annually<sup>7</sup> who suffer from food insecurity.

In light of the large adverse impacts of drought within Ethiopia, the Government of Ethiopia (GoE) has developed jointly with its Development Partners (DPs) early warning systems (EWS) that permit a timely recognition of impending droughts. EWS that are compiled regularly include, inter alia, the Livelihoods, Early Assessment and Protection (LEAP) tool developed in 2008 by the GoE and the World Food Programme (WFP), the Livelihood Impact Analysis Sheet (LIAS) developed in 2008 by the GoE and USAID, hotspots assessments conducted by the Early Warning and Response Directorate (EWRD) as well as other ad hoc assessments to determine the need for assistance in specific areas within Ethiopia.

EWS are used to feed into Ethiopia’s well-established drought response mechanisms, notably the Productive Safety Net Programme (PSNP) and humanitarian appeals, by means of which assistance is provided to the affected populations. The PSNP, which was developed by the GoE and its DPs and launched in 2005, has provided assistance to almost 8 million chronically food insecure households in 2015, of which 6.6 million beneficiaries were participating in public works activities, and 1.4 million labor-poor beneficiaries received direct support<sup>8</sup> . Since 2008, the PSNP has a drought response mechanism<sup>9</sup> , which permits the rapid scale-up<sup>10</sup> of the PSNP to include additional beneficiaries that are pushed into transitory food insecurity due to drought, and to extend the duration of payments made to 1 World Bank (2014b).

2 UN OCHA (2011).

> 3 OECD (2014).

> 4 World Bank, World Development Indicators.

> 5 CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/et.html.

> 6 Based on Guha-Sapir, Below and Hoyois, EM-DAT database. Average number of people affected by drought based on EM-DAT data, taking into account droughts in 2003, 2005, 2008, 2009, 2011 and 2015.

7 Based on HRD Appeals for the years 2005 to 2014 (average beneficiaries across the assessments for the main harvesting seasons _belg_ and _meher_ ).

8 FDRE Ministry of Agriculture and Natural Resources, Rural Job Opportunity Creation and Food Security Sector, Food Security Coordination Directorate (2016).

9 Under PSNP III, drought response was managed through the Risk Financing Mechanism (RFM). Under PSNP IV, from July 2015 onwards, the RFM has been replaced with the Federal Contingency Budget (FCB).

10 In this paper, the term scalability / scale-up designates the inclusion of additional beneficiaries and extension of payments to existing beneficiaries in response to drought. While the FCB can be disbursed also in non-PSNP districts ( _woredas_ ) within PSNP regions, the term scale-up does not refer to the geographic expansion of PSNP coverage beyond current PSNP regions.

1