Some factors inhibiting the achievement of these goals are the limited capacity of water bureaus in the country's nine regions, two city administrations and water desks in the 770 districts of Ethiopia (woredas); insufficient cost recovery for proper operation and maintenance; and different policies and procedures used by various donors, notwithstanding the Paris Declaration on Aid Effectiveness.

In 2001 the government adopted a water and sanitation strategy that called for more decentralized decision-making; promoting the involvement of all stakeholders, including the private sector; increasing levels of cost recovery; as well as integrating water supply, sanitation and hygiene promotion activities.

In 2005 the government announced highly ambitious targets to increase coverage in its Plan for Accelerated Sustained Development and to End Poverty (PASDEP) for 2010.

However, due to large spatial and temporal variations in rainfall and lack of storage, water is often not available where and when needed.

[6] The capital Addis Ababa's main source of drinking water is the Gafsara dam built during the Italian occupation and rehabilitated in 2009.

[9] The situation is most dramatic in Harar where "a steady decrease of the level of Lake Alemaya has resulted in the complete closure of the treatment plant".

[11] A pipeline is expected to bring water over a distance of 75 km from a well field near Dire Dawa to Harar.

[12] People who have no access to improved supply usually obtain water from rivers, unprotected springs and hand-dug wells.

A detailed analysis of the groundwater flow systems is needed for decision-making to achieve sustainable water resource management.

[14] Groundwater exploration is taking place in the upper Awash sub-basin: "More than 300 boreholes have been drilled in this area for the municipality, irrigation, industries, and different private owners under a government-promoted self-supply policy.

There are also well fields in Addis Ababa city, Akaki, South Ayat, Legedadi, and Sebeta Tefki.

[15] Poor waste management practice in Addis Ababa city and Akaki areas has the potential to contaminate shallow groundwater systems.

[17] Within these statistics, access to safely managed drinking water will vary within and between large cities, medium- and small-towns.

For example, in the mountain-top village Foro in the Konso special woreda of southwestern Ethiopia women make three to five round trips per day to fetch dirty water from the Koiro river.

[21] Residents installed household water storage tanks with a volume of 28 to 150 litres to cope with the problems of unreliable supply.

Ethiopia is a federal state consisting of the following subdivisions: In addition to the regions there are two “chartered cities”, (Addis Ababa and Dire Dawa), where the lower-level administrative units mentioned above do not exist.

[23] There are strong national water supply and sanitation policies and key agencies have clear roles and strategies.

During the first phase until 2012 the focus is on affordable and appropriate technologies, with the following service standards:[26] In 2001 the government adopted a National Water Strategy prepared.

The water and sanitation part of the strategy alone includes 44 recommendations concerning technical, institutional, capacity building, social, economic and environmental issues.

Not all the local committees are registered, which is a prerequisite to open a bank account to hold funds collected from users.

According to one set of government figures, which is used by the Ministry of Finance and Economic Development for planning purposes, access to drinking water reached 68.5% in 2010.

The mean average price households pay for water from the utility was 6.5 Ethiopian birr per m3 in 2022 (or 0.12 USD with October 2023 exchange rate).

The government estimates that annual investments in the 2006-2015 period will reach about US$100 million per year, or about two and a half times their level in 2001–2002.

[28] For the country's 550 Woredas an important source of financing are block grants from the central government which they can use autonomously within broad criteria set by the Water Resources Development Fund (WRDF).

Donors finance numerous projects in water supply and sanitation in Ethiopia – some through the Federal Government and some directly to regions, towns and communities.

[29] The African Development Bank provided a US$64 million grant for rural water supply and sanitation approved in 2005.

[37] For example, in the village of Orbesho residents - mainly women - built themselves an access road to allow drilling equipment to be brought in, dug trenches for pipes and collected stones for structures.

Projects include establishing communal water points linked to the city's piped systems, as well as shower and latrine blocks.

In rural areas alone, according to the World Bank the project facilitated access to clean water and improved sanitation facilities to about 1.4 million people.

The project had financial support from the National ONEWASH programme, UNICEF and UK Foreign, Commonwealth & Development Office, as well as the Tigray regional and national governments, Inaugurated in 2018, this included the development of more productive and reliable boreholes with a planning period from 2015 to 2035, designed to provide water equally over all water demand nodes of the distribution network.