A recent audit report by the Office of the Federal Auditor General (OFAG) has uncovered widespread financial mismanagement, delays, and inefficiencies in the country’s public projects, resulting in losses exceeding 17 billion birr (approximately $121.4 million) in road construction and university developments alone.
The report details systemic issues affecting government-funded projects, with over 180 road projects incurring more than 13.26 billion birr in cost overruns in addition to their initial budgets. This means that more than 75% of these projects have faced significant additional costs caused by delays, overbudgeting, and poor management practices.
The problem extends beyond infrastructure to other vital sectors such as electricity generation, irrigation, and higher education projects. The audit found that many projects were not completed on schedule, leading to wasteful spending and stalled development efforts.
Officials from the Ministry of Planning and Development (MoPD) attributed these challenges to several factors, including difficulties in land acquisition and boundary enforcement, ongoing security concerns, disrupted financial flows, design changes, inflationary pressures, foreign exchange shortages, and the limited capacity of contractors.
Further compounding the issue, the audit revealed that funds disbursed between 2020 and 2024/25 were sometimes allocated to projects that either failed to commence or should have been completed earlier, highlighting glaring gaps in project monitoring and management.
Significantly, the report exposes grave financial irregularities and embezzlement at several universities, including Addis Ababa University, Dire Dawa University, Wolaita Sodo University, Wachemo University, and Haramaya University.
For instance, Addis Ababa University received over 437 million birr for 13 projects—such as a student dormitory, renovations at the Yared School of Music, and a café upgrade—that never started and for which funds were not returned. Similarly, Dire Dawa University was allocated nearly 603 million birr for various construction projects from 2021 to 2024, including an 11 million birr advance for a guest house, yet work had not begun.
The situation is echoed at Haramaya University and Wolaita Sodo University, with allocations of 90.4 million birr and 333.6 million birr, respectively, for incomplete projects.
Moreover, the audit found that more than 2.9 billion birr was paid for projects at universities that had already been completed—1.4 billion birr at Wolaita Sodo and over 1.8 billion birr at Wachemo University—representing funds spent without proper justification or return.
The report also highlighted over 1.11 billion birr allocated for five universities’ projects that were diverted for purposes other than their original intent, underscoring a lack of accountability.
In total, the audit identified around 4.74 billion birr disbursed for either completed or unstarted projects across multiple universities, funds which have yet to be reimbursed.
The Federal Auditor General has urged urgent reforms to establish a robust project management and monitoring system to safeguard public resources and improve efficiency. Recommended measures include implementing a modern, technology-driven information system to track projects from initiation to completion, ensuring mandatory environmental and research assessments before project commencement, and improving oversight to prevent misuse of funds.
The Auditor General further emphasized the need for stringent accountability mechanisms targeting individuals responsible for financial mismanagement and called for sustained capacity building and technical support for project implementers across all levels.
