Achiso, Demeke (PhD)Tolesa, Wubayehu2018-06-282023-11-042018-06-282023-11-042017-06http://etd.aau.edu.et/handle/123456789/4740The main purpose of this study is to examine the role of foreign aid on health development in Ethiopia during health sector development program IV that has been implemented from 2010/11 to 2014/15. The study focused on the International health compact signed between government of Ethiopia and development partners according to principles of Paris declaration 2005 and Accra Agenda for Action 2008 based on mutual accountability of the signing parties. Purposive sampling was used to collect the relevant data from UNFPA and Ministry of Health (Resource mobilization and utilization office, grant management office, plan policy office and offices of leads programs that were heavily financed by aid during this program implementation). Annual performance reports of health sector development program were used as secondary sources are for data collection. The study result shows that, the main focus areas of health in HSDP IV, those heavily financed by foreign aid, prevention and control of communicable diseases (HIV/AIDS, TB and Malaria), maternal health and child health. Aid has a significant positive impact on health development. However, limiting one fiscal year on utilization of foreign aid resulted in less performance in the sector. In addition complex bureaucracy of procurement and the process of agreement that have been taking long time period for construction are found to be other challenge. Based on the study finding the researcher recommended that government of Ethiopia must increase health per capita income, ministry of health is recommended to build the capacity of the workers through continuous training on how to utilize aid effectively, donors are recommended to contribute their donation through pooled fund mechanism and expand the time limit of using aid from one to two years can make health aid effective and efficient. Keywords: Foreign Aid, Pledged, Disbursement, Health DevelopmenenForeign AidPledgedDisbursementHealth DevelopmentThesis